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ROI of Technology Systems Is More Than Financial

August 26, 2013

"It's hard or nearly impossible to justify the investment needed for a state-of-the-art EHR with hard-dollar savings," says the CFO of an academic health system. "You have to look beyond that to the intangible benefits, the improvements in delivery of care and positioning your organization to be competitive in the future."



>> Slideshow: HealthLeaders Media
CFO Exchange

As healthcare finance leaders know, preparing for a successful future in the new era of population health management and value-based reimbursement models requires the installation and integration of an electronic health record and other sophisticated IT systems. But achieving a return on these multi-million dollar investments is not easy—and often not possible—if viewed in strictly monetary terms.

Several chief financial officers spoke on this topic at a roundtable discussion I moderated at HealthLeaders' recent CFO Exchange in Colorado Springs, CO, and there was strong consensus that finding the value in IT systems entails looking beyond the bottom line.

Rick Hinds, executive vice president and CFO at UC Health in Cincinnati says his organization measures the success of its IT initiatives in several ways, including qualifying for meaningful use dollars, integrating ambulatory and inpatient records, improving safety and quality through the use of computerized physician order entry and bar code medicine administration, increasing utilization of best practices, and improving clinician and patient satisfaction.

Factor in 'Intangible Benefits'
Hinds says when taking all these factors into account, UC Health's new EHR is a success.

"We implemented our EHR less than a year ago, but to date have hit the economic and non-economic goals we set for the system," he says.

Hinds believes installing a system-wide EHR is "a have-to-do, not a want-to-do" in order for provider organizations to remain viable in their markets.

"It's hard or nearly impossible to justify the investment needed for a state-of-the-art EHR with hard-dollar savings," Hinds says. "You have to look beyond that to the intangible benefits, the improvements in delivery of care and positioning your organization to be competitive in the future."

"Fortunately our board is pretty savvy regarding healthcare issues, plus we have a number of physicians on the board, so they understand the benefits of the improvements in care," he adds.

Craig Richmond, associate CFO and vice president of revenue cycle at Cleveland-based MetroHealth agrees that defining the success of an IT installation should be done in broader terms than just the balance sheet.

'Don't even call it an ROI'
"You can look at ROI in many different ways," he says. "You can look at ROI from a financial perspective. You can look at ROI from mitigating compliance risk. There are a lot of different ways you can look at it. Don't even call it an ROI, but look at the value-proposition associated with it."

Richmond says one way MetroHealth is finding value in its current revenue cycle IT installation is to use it as an opportunity to review workflows and processes to create efficiencies and pull cost out of the system.

"What we decided to do is take a look at our current practice and our current workflows and see how we could optimize them during the system install. I refer to it as a revenue cycle transformation and at the conclusion of our implementation, which is now set for Feb. 1, 2014, we would be in a position to realize the true value and benefits from our system implementation," Richmond says.

Although the CFOs at the roundtable discussion were in agreement that the true ROI of an IT upgrade or installation cannot be counted in pure dollars and cents, they also concurred with Richmond that it is essential to rethink processes before moving forward with a new system in order to achieve the best possible financial outcomes.

"In my opinion, I think it is important to get the process optimized before you automate it," says Jerry Arndt, senior vice president, business services at Gundersen Lutheran in La Cross, WI. "Don't automate chaos."

The Software is Not Your Boss
Arndt also warns against falling into the trap of letting the software rule the roost when it comes to revenue cycle processes because that approach can cause inefficiencies and waste.

"As we look at some of these things that are kind of imposed on us by some of these IT systems, the question I always ask is 'is the system working for us or are we working for the system?' If you find yourself having to do something that you really didn't want to do because the system required you to do it that is probably not where you want to be," he says.

Leaders at Gundersen actively seek user input as they look for ways to improve their systems and find fiscal gains, Arndt adds.

"We're really involved with user groups and trying to make things as good as they can be for our applications. We are trying to get IT systems to support efficient processes rather than forcing us to perform unnecessary or wasteful activity," he says.

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