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Tangible and intangible ROI for an EMR and PM

Abstract: The pressure to invest in an EMR or PM for hospitals and clinics is large. However, on the other hand it has been proven that clinical applications like EMR and PM increases efficiency, improves quality of patient care and in a timely manner. The adoption of such healthcare applications conversely has been based on the fact if the healthcare providers would gain sufficient Return on Investment from the same or not. This article helps provide insights on tangible (monetary) and intangible (clinical) returns that are eventually gained from use of these applications.

Return on Investment conventionally is based on evaluating the impact of expenses with the revenues gained. When profits exceeded the costs involved, the investment was said to be justified and right. However, this may not necessary be the case with healthcare applications where the value of the investment could be more on intangible details like improved and detailed patient encounter, avoidance of medication errors, better quality care, etc.

The healthcare industry has still a lot to learn and progress on IT investments. It is essential to evaluate the application’s use based on the one using it more than the one providing it. Measuring financial returns is important but not the sole criteria for ROI. There are many qualitative returns too, especially in an industry like healthcare, that proves to be much beneficial than the financial figures. Various intangible benefits that results from adoption of an EMR are reliable quality of care, improved patient security, length of stay that is tremendously reduced and compliance to regulatory requirements. The most essential of all being reduction in medical errors that is the sole purpose of having investments in technology.

Measuring ROI and success of clinical systems like EMR or PM applications can be realized at a clinical and organizational level as well. Access to test results that are otherwise unavailable, quantifying costs per error, improving quality of care in an ambulatory care setting are some of the benefits at a clinical level. The operational efficiency of the organization too improves tremendously.

To evaluate the numerical metrics cash flow analysis, cost effectiveness analysis and total cost of ownership are considered. Main Tangible returns rendered are:

  • Improved revenue flows (Real case studies where adoption of EMR has given 300% ROI for the first year and payback period was just 4 months)
  • Compensation, grants and tax benefits from the government
  • Savings catering to labor, transcription
Delphi techniques and process metrics are helpful to identify the main intangible benefits. Some of the key intangible returns rendered are:
  • Avoidance of medical errors that has alarming effect on death rates
  • Increased patient time and patient satisfaction 
  • Increase the number and speed up the process of transactions
  • Improved ability and productivity of personnel
  • Secured and effective way of maintaining patient records
  • Increased information access
  • Adoption of EMR has proven to be beneficial in many ways and the ROI does not necessary dominate in the form of tangibles but intangible returns as well. Transformation in the delivery of health care, making it safer, more effectual, and well-organized has been the overall focus of these clinical applications such as EMR and PM.


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