Investment in IT is considered a driving factor in improving patient care; the critical question asked by CEOs, CFOs, and board members is whether hospitals achieve a financial return from their IT investments. The inability to measure and account for financial benefits from IT investments has led some hospital administrators to avoid making these types of capital investments that can provide more efficient, higher-quality care and also improve patient and provider satisfaction. One health care system that decided to make this investment is Banner Health, which implemented an IT system at its newest hospital, Banner Estrella Medical Center in Phoenix, Arizona. By investing in IT and receiving input from physicians, pharmacists, nurses, informaticists, and other clinicians, the hospital was able to design new work flows and establish evidence-based order sets. The improved IT design and standard order sets were implemented across departmental functions such as care management, clinical documentation, computerized provider order entry (CPOE), nursing order management, and medication administration and scheduling, and also across processes in departments such as health information management, emergency services, obstetrics, pediatrics, pharmacy, and surgery. This IT investment resulted in a $2.6 million cost savings from greater retention of nurses, which lowered the costs of recruiting, hiring, and training new nurses, and from reducing accounts receivable billing by one day, which resulted in faster payment; decreasing the incidence of adverse drug events, length of stay, and pharmacy costs; decreasing overtime expenses for nurses as a result of improving their efficiency in charting and shifting tasks; and reducing forms costs because information was digitized.
Apply a cost-benefit analysis to consider potential profit and risks to your organization based on the experience of Banner Health System.
Use Plowman's spreadsheet "Cost Benefit Analysis Template" to display your data.