Business Case for Hospital Information & Management Systems

“Not all that can be counted, counts. And not all that counts can be counted.” Einstein was surely right when he quipped this. This is an area of concern especially for healthcare organizations contemplating significant investments in healthcare-IT systems.

Integrated hospital information systems, undeniably, deliver a lot of value to the entire healthcare ecosystem – patients, providers, physicians, payers & pharmaceuticals. However, in an era of scarce resources, many health care providers are hard pressed to make a case that is strong enough to justify the significant investment of monetary and human capital needed to deploy information/IT systems. The challenge - many benefits such as provider convenience, patient satisfaction, and improved care are not easily captured on the bottom line in terms of an increase in revenue, a decreased in expense, or an avoidance of expense. Even the most ardent advocates recognize this elusive nature of the healthcare-IT business case and the lack of hard evidence supporting a cost/benefit value proposition.

To address this we developed a framework (table below) to assist healthcare service providers capture potential saving opportunities that can contribute to a positive cumulative net cash flow from a business case perspective. These benefits are categorized into Strategic (non-quantifiable yet most important for the business case), Soft drivers (efficiency gains, productivity improvements etc.) and Hard benefit drivers (cost reduction, avoidance, revenue etc).

Leadership commitment, engaging with medical as well as administrative staff and striking a balance between ‘care’ and ‘business’ goals are crucial for the success of a healthcare-IT business case.

Framework for the business case of an Integrated HIS

Category	Value Drivers	Remarks
Strategic Benefits	• Improved Patient Safety • Increased Quality of Care • Increased Transparency • Reduced Risks • Patient Experience • Employee Satisfaction	Non-quantifiable, yet most important while evaluating the right partner. A rating system can be used to assess options.
‘Soft’ Benefits (Efficiency, Productivity etc)	• Enable Evidence Based Clinical Decision Making	For departments related to direct patient care & ancillary clinical services – Nursing, diagnostics, labs, OT, ICU etc.
	• Automate/ Reduce Transactional Activities	For informational, administrative & support services – Admissions, billing & collections, budgeting & finance, HR etc.
‘Hard’ Benefits (cost reduction, avoidance, revenue)	• Material Cost Savings	Medical records and forms, hospital supplies, capital expenditure, inventory
	• IT/TCO Savings	Legacy system retirement, reduced # of interfaces, storage and retrieval cost, reduced multiple hardware platforms
	• Revenue Uplift/Reduced Cost of Service per patient case	By improving patient throughput, optimizing ALOS, improving asset utilization & reducing wait-times
	• Reduced Medical Errors and Associated Costs	Reduced impact of Adverse Drug Events, reduced litigation & malpractice insurance expense

Tushar Gulhane