Overview
There are three areas specific to the financial benefits of electronic health records which include cost reductions, cost avoidance, and revenue enhancement. Any type of decrease in outside costs will be considered to fall under the category of cost reductions. To determine if specific processes will result in a cost reduction is to examine the account on a general ledger sheet for the next budget year, and determine if there has been a reduction in cost. Cost avoidance is considered when an expected expense is no longer required due to the completion of a planned project. Finally, revenue enhancement is the process of producing additional income due to the outcome of a specific planned project. Furthermore, important emphasis should be taken to ensure that only profit data of revenue enhancement is included when a cost-benefit analysis is conducted.
Guiding Principles
Guiding principles are strongly recommended prior to performing a cost-benefit analysis on any project being implemented in the execution of electronic health records. In order to successfully establish these guidelines, input from the organization's administration, information technology, and finance departments should be taken into consideration. Below are some guiding principles highly utilized by vendors of health industries:
Benefits
Many factors are considered when determining the financial benefits of electronic health records. Some benefits are difficult to distinguish, while others are obvious to distinguish. Critical thinking can be involved in some of the thought processes in establishing these benefits. Below are some financial benefits that have been established and used as a guideline for many vendors of health industries:
Guiding Principles
Guiding principles are strongly recommended prior to performing a cost-benefit analysis on any project being implemented in the execution of electronic health records. In order to successfully establish these guidelines, input from the organization's administration, information technology, and finance departments should be taken into consideration. Below are some guiding principles highly utilized by vendors of health industries:
- A baseline should be generated for all benefits, as well as future goals should be established.
- A reduction in expenses must also reflect in the budget and distributed to the appropriate accounts.
- Maximum cost effectiveness must be demonstrated in the reduction of full time equivalent (FTE) or improvements shall be increased through productivity.
- When a planned project budget is reduced, all measures should be implemented to ensure FTE costs are avoided.
- Cost avoidance must correspond to future contract expenses that have already been budgeted.
- A thorough explanation and calculation shall be made on the return on investment (ROI) rates.
Benefits
Many factors are considered when determining the financial benefits of electronic health records. Some benefits are difficult to distinguish, while others are obvious to distinguish. Critical thinking can be involved in some of the thought processes in establishing these benefits. Below are some financial benefits that have been established and used as a guideline for many vendors of health industries:
- The opportunity to schedule more appointments with the physician due to increased productivity
- The access to view the overall process, providing the capability to recognize errors, as a result of undercoding by physicians
- The cost of transcription(s) is decreased
- The maintenance of software and the replacement of support functions for systems is decreased
- Consultation costs related to the maintenance and support of legacy systems is decreased
- Costs related to the retrieval, filing, and storage of paper charts are decreased
- Procedural costs involving clinical forms are decreased
- Mail delivery costs are decreased
- Debt write-offs are decreased
- The rejection in rates are decreased
- The costs related to the negative interactions of certain drugs is decreased
- Costs related to the process of escribing is decreased
- The prevention of the repair and replacement of hardware
- The prevention of unnecessary expenses