This article discusses the difficulties of finding the Return on Investment for hospitals that install Electronic Medical Records Systems. The author does an excellent job of critiquing the common mistakes in justifying the purchase of such systems based upon what he sees as flawed estimates of the ROI. While his points are valid, he misses several very important differences among hospitals in restricting his article to only statistics of costs and saving for “for-profit” hospitals. So his model only works for US hospitals and hospitals where profit is a motive, even though he uses studies from many different hospitals, some in countries where the hospitals are not for profit and do not issue charges to patients. One other major cost he overlooks is the cost of insurance and the cost of potential loss of paper-based records. However, overall, his article contributes value to the field.
At the beginning of the article, the author lists the five main points he covers:
“There are five common pitfalls in using clinical studies to calculate the ROI of electronic medical records (EMRs):
- Imputing value to minutes of time saved when staffing is not reduced
- Imputing or estimating cost savings that can’t be measured
- Ignoring the revenue impact of reduced resource utilization
- Ignoring baseline performance in extrapolating benefits
- Using fixed costs in financial savings analyses.”
The author justifies each of these points well, even pointing out alternatives to these mistakes in order to avoid them. However, these are all based upon the assumption that the hospitals are in business for profit. Point number three, which deals with the lower utilization of billable resources, does not work for not-for-profit hospitals.
The author does not mention the possibility of lower insurance costs for the hospital and its staff, especially as concerns the very costly malpractice insurance for doctors. Just as insurance companies can lower the insurance costs for homes with security systems, because the security system prevents loss, they could be pressured to lower the costs of malpractice insurance if it can be shown that accurate record-keeping lowers the possibility of some kinds of loss in the hospitals.
Recent disasters have shown us the frailty of paper-based records. Many companies and government agencies, including the New Orleans Port Authority, lost important paper-based records in Katrina. These are gone forever. Other companies with digital records had backups on remote servers and on local backup drives. These records survived, and those on remote servers were immediately available within mere minutes of the flooding on New Orleans. The author never mentioned the considerable value of the records themselves, only the value of the time saved by using digital records.
Therefore, I believe this is a valuable article, but it is flawed by not stating that it only applies to “for-profit” hospitals in a system where health care is a profit-making enterprise. It is also limited in its value because it does not include enough scope to be comprehensive in its value.
References
Thompson, Douglas I. and Fleming, Neil S., put year here, Finding the ROI in EMRs.