6 Ways Hospitals Can Analyze Technology's Return on Investment
As hospitals deal with growing technology mandates and new health information management projects, executives have to wonder if the investments are actually worthwhile. Taking pause and evaluating the return on investment of technology projects can actually ensure a hospital is on the right track.
At the 2012 AHIMA Convention and Exhibit, two HIM professionals — Jill Devrick, product solutions advisor for 3M Health Information Systems, and Michael Putkovich, director of HIM at Spectrum Health in Grand Rapids, Mich. — explained how hospitals can determine the ROI of their technology and HIM projects, and it involves more than just cost.
1. Determine direction and priorities. Before a hospital knows if a certain technology yielded a good result, executives must first drill down which functions contribute to the organization's success, Ms. Devrick said. For example, a hospital may define value, transparency, diversity, inclusion and other areas as their top priorities.
2. Benchmark and baseline. One of the most effective and frequently used ways to look at the ROI of any project is to compare its effectiveness. Benchmarking compares a hospital's processes to other industry leaders or best practices, while baselining looks internally at the hospital's current performance versus its historical metrics. "Benchmarking looks at how you measure up against federal and state government, AHIMA and other professional organizations and industry leaders," Ms. Devrick said. "For baselining, hospitals must retain historical data from previous projects."
Mr. Putkovich said Spectrum Health, which is a nine-hospital system with more than 1,800 beds and 18,000 staff members, is not like all other health systems. Other hospitals must realize that benchmarking against other organizations must go beyond bed size and services offered, and executives should look at specific project commonalities.
3. Ask pointed questions. In regards to HIM investments, hospital executives must ask specific questions. Examples include: Has your total volume of output increased? Are you able to do more with the same amount or fewer staff? Are you seeing increasing ratios, such as documents scanned per day or minutes of transcription per minute of dictation? Are you seeing improved quality? Are turnaround times for chart completion within established guidelines or lower?
4. Analyze workflow improvement. A new technology can have an excellent ROI if a hospital is able to eliminate steps or save time. For example, Mr. Putkovich said for stress tests, many people are involved in the documentation process. Nuclear medicine cardiologists, exercise specialists and nuclear medicine technicians all have to input data in fragmented stages. After realizing the process was too fragmented, Mr. Putkovich said Spectrum implemented a new technology where a template document would stay open, and clinicians could enter their data in a more collaborative matter.
"We learned there was an ease of collaboration," Mr. Putkovich said of the new technology. "We also found it was more flexible, it improved accuracy and it led to more comprehensive and legible documentation."
5. Determine cost impacts. When most people hear the term ROI, cost is one of the first things that comes to mind. Naturally, costs must be measured. Specifically, hospitals must determine when the upfront costs of a technology will be paid back and how much the technology will save in the long haul.
Mr. Putkovich said new dictation software at Spectrum had a financial ROI of $577,000 per year, based on saved costs from not having to add more staff members, among other factors.
6. Look at employee retention and business growth. A qualitative ROI measurement is looking at employees and physicians to see if the new technology or HIM project makes their lives easier. Ms. Devrick said if employees see the benefits of the technology and makes them happier in their day-to-day, that has to be considered as a positive ROI.
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