Fillable Printable Definition Of Cost Benefit Analysis
Fillable Printable Definition Of Cost Benefit Analysis
Definition Of Cost Benefit Analysis
MIS 5102, Spring 2011 Viju Raghupathi
Assigned Reading, Week3
COST BENEFIT ANALYSIS
EHR Cost/Benefit Analysis:
This example analysis is intended as a general example of the cost vs benefit that a
typical small medical office should experience from investing in an AMS Practice
Management ULTRA system. It uses industry averages from various sources. In this
example, a single doctor medical office sees 30 patients per day and receives 100 phone
calls per day. In addition to the physician, there are two clinical assistants and two front
office staff. The office is open 240 days a year.
COSTS
Software License – EMR/PM license for the staff of five is $10,000. Productivity loss
during the implementation and training period is estimated at another $10,000.
Hardware –1 Tablet PC for the provider, 4 workstations for the remaining staff and a
Server. Tablet PC = $2,500, Workstation = $1,000, Server = $2,000.
Support & Maintenance – Ongoing support costs will be incurred from both an annual
support contract with the software vendor for updates and technical support and the
increased need of hardware/network support through a local IT representative.
Benefits
Improved Coding – Where down-coding and poor charge capture can both be improved
through the EMR’s E&M Coding assistant. A study by Medical Economics magazine
estimated that a physician who is regularly down-coding may be losing as much as
$40,000 to $50,000 annually.A study done by Partners Healthcare System found an
increase of 1.5%-5% in overall billing simply through improved charge capture. We will
use a conservative improvement rate to factor in a reduction in down-coding, resulting in
approx. $24,000 per year.
Transcription – Offices using a transcription service @ the industry standard of $300-
$1000 per month, we will use a conservative figure of $600 per month resulting in an
annual savings of $7200.00
Chart Management – Chart Management costs can be reduced through lower chart
creation costs, lower chart storage costs and fewer chart pulls. The cost to create a new
chart is estimated at $7/chart and the cost to pull a chart is $5 according to industry
standards. For this example we will assume that there are 50 chart pulls per day
including the 60% average for non-visiting patients. We will use a conservative estimate
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MIS 5102, Spring 2011 Viju Raghupathi
Assigned Reading, Week3
for the cost of each chart pull @ $3 and assume that we will only reduce our chart pulls
by 40% the first year and not be paperless for 2 years.
Prescription Refills – According to a study done by Journal of Healthcare Information
Management, the time spent doing an Rx refill can be reduced from 15 minutes to 3
minutes. At 20 refills per day, that would be savings of 240 minutes.
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