assessing the cost of vista/ehr building a business case with roi claudine d. beron, pmp july 3,...

Assessing the Cost of VistA/EHR Building a business case with ROI

Claudine D. Beron, PMPJuly 3, 2007

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Project Management for VistA is accomplished through the use of the core areas including: initiating, planning, executing, controlling, and closing and represents over 44 processes from PMI.

VistA Project Life Cycle

Accept Identify Owners

Identify Stakeholders

Future Budgeting

Complexity

Assess Environment

Needs

Standard Operating Procedures

Benefits

Resources Strain

Budget

Deploy Hardware

Software

Configure to Environment

Educate Compare EHRs

Build Business Case

Develop ROI

Understand Functionality

Train Ongoing

maintenance

Clinical Staff

Support Ongoing

maintenance

Updates/Patches

Additional modules

Initiate Plan Execute/Control Close

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VistA – Assessing the Needs of a Hospital

Figure 002. EMR/HER Project Approach and Use of PMI MethodologyVistA 02

PMI Methodology

Clinical Subject Matter Experts

Phase I

Initiate

Define High Level Clinical Requirements

Define High LevelIT Requirements

Validate

Phase II

Plan

Design Solution

Develop ChangeManagement

Develop BPR Strategy

Phase III

Execute

Build IT Solution

Configure VistA Solution

Phase IV

Monitor/Control

Manage Project Plan

Provide Reports

Train Staff Document Lessons Learned

Clo

se

Organizational Sponsors

Customer Program Management Office

Executive Sponsor

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VistA – Assessing Timelines/Resources

ID WBS Task Name Work Duration Start Finish Predecessors

1 1 Phase I: Initiate 118 hrs 31 days Fri 2/23/07 Mon 4/9/07

2 1.1 Initiate 118 hrs 22 days Fri 2/23/07 Mon 3/26/07

3 1.1.1 Conduct Project Kick-Off / Planning Session 2 hrs 4 hrs Mon 3/5/07 Mon 3/5/07

4 1.1.2 Develop Communication Plan for Project 0 hrs 1 day Mon 3/5/07 Mon 3/5/07

5 1.1.3 Define Project Approach, Guiding Principles, Governance, and Goals4 hrs 8 hrs Mon 3/5/07 Mon 3/5/07

6 1.1.4 Develop Scope, Resource Plan, and Budget 16 hrs 16 days Mon 3/5/07 Mon 3/26/07

7 1.1.5 Develop Value Measurement & Success Metrics 16 hrs 16 days Mon 3/5/07 Mon 3/26/07

8 1.1.6 Requiremens Gathering 80 hrs 21 days Fri 2/23/07 Fri 3/23/07

9 1.1.6.1 Idaho’s State Hospital North 40 hrs 5 days Mon 3/12/07 Fri 3/16/07

10 1.1.6.1.1 Document High-Level Current State - Process and Technical 40 hrs 5 days Mon 3/12/07 Fri 3/16/07

11 1.1.6.2 Idaho’s State Hospital South 40 hrs 21 days Fri 2/23/07 Fri 3/23/07

12 1.1.6.2.1 Document High-Level Current State - Process and Technical 40 hrs 5 days Mon 3/19/07 Fri 3/23/07

13 1.1.6.2.2 Deliverable: Current Environment 0 hrs 0 days Fri 2/23/07 Fri 2/23/07

25 1.2 Define High-Level Future State Design & Operating Model 0 hrs 10 days Mon 3/26/07 Fri 4/6/07

26 1.2.1 Evaluate Leading Practices 0 hrs 10 days Mon 3/26/07 Fri 4/6/07

27 1.2.2 Define Technology Requirements and Differentiators 0 hrs 10 days Mon 3/26/07 Fri 4/6/07

28 1.2.3 Define Application Cluster for Selection / Implementation - Integration and Technical Architecture Strategy0 hrs 10 days Mon 3/26/07 Fri 4/6/07

29 1.2.4 Deliverables 0 hrs 0 days Mon 3/26/07 Mon 3/26/07

30 1.2.4.1 Leading Practices 0 hrs 0 days Mon 3/26/07 Mon 3/26/07

31 1.2.4.2 Services Mapping 0 hrs 0 days Mon 3/26/07 Mon 3/26/07

32 1.2.4.3 High-Level Process Models With Specification Sheets and Technical Requirements (including Reporting0 hrs 0 days Mon 3/26/07 Mon 3/26/07

33 1.3 Define High-Level IT Strategy / Roadmap 0 hrs 10 days Mon 3/26/07 Fri 4/6/07

34 1.3.1 Evaluate Leading Practices 0 hrs 10 days Mon 3/26/07 Fri 4/6/07

35 1.3.2 Define Technology Requirements and Differentiators 0 hrs 10 days Mon 3/26/07 Fri 4/6/07

36 1.3.3 Define Application Cluster for Selection / Implementation - Integration and Technical Architecture Strategy0 hrs 5 days Mon 3/26/07 Fri 3/30/07

37 1.3.4 Deliverables 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

38 1.3.4.1 Leading Practices 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

39 1.3.4.2 Technology Enablers 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

40 1.3.4.3 Standards 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

41 1.3.4.4 Application Clusters 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

42 1.3.4.5 Integration Requirements 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

43 1.3.4.6 User Interface 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

44 1.3.4.7 Reporting 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

45 1.3.4.8 High-Level Roadmap 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

46 1.3.4.9 Other IT Initiatives 0 hrs 0 days Fri 3/30/07 Fri 3/30/07

47 1.4 Validate Design 0 hrs 5 days Mon 4/2/07 Mon 4/9/07

48 1.4.1 Define Value Propositions by Team 0 hrs 4 days Mon 4/2/07 Thu 4/5/07

49 1.4.2 Develop Overall Value Proposition 0 hrs 4 days Mon 4/2/07 Thu 4/5/07

50 1.4.3 Conduct Validation Session with Executives 0 hrs 2 days Mon 4/2/07 Tue 4/3/07

51 1.4.4 Deliverables 0 hrs 0 days Mon 4/9/07 Mon 4/9/07

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February 2007 March 2007 April 2007 May 2007 June 2007

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What is Business Case Analysis?

• Definition: a forecast of the financial impact, over time, of a decision – typically an investment, capital purchase, or project

• A full Business Case analysis forecasts the project costs, benefits, and the timing of both elements

• Results may be expressedas a time series (see graphic)or summarized by a singlefinancial metric

+Cash Flow

Impact-

Time

Mark Leavitt, MD, PhD, FHIMSS. Case for EHR in Small Physician Offices - Physician Office QIOSC National Call -- January 11, 2005

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Financial Metrics• Net Cash Flow

– How much extra cash will this costor generate for our business eachmonth / quarter / year?

– Well-suited to the medical practice,where ‘cash (flow) is king’

• Discounted Cash Flow– Like Net Cash Flow, but adjusted

for ‘time value’ of money• Net Present Value

– Sums up the discounted cash flows to give a single value• Payback Period

– How long until project ‘pays for itself’– Good measure of relative risk: long payback = high risk

• Internal Rate of Return (IRR)– Compares investment with an interest-bearing note– Not well suited to measure an IT project – buying a bond vs. implementing

an EHR couldn’t be more different!

+Net

Cash Flow

-

Time

Payback Period

IRR

NPV

Mark Leavitt, MD, PhD, FHIMSS. Case for EHR in Small Physician Offices - Physician Office QIOSC National Call -- January 11, 2005

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Business Case Analysis for EHR

Lumetra. EHR - Estimated Cost Savings Worksheet with additional inputs from Claudine Beron on implementation of VistA at 7 site facility

A. Input Office Specific Information (Rates and Averages)

Number of Patients Per Day 1500 e.g. Long Term Facility

Work Days Per Year 365

Average Hourly Rate of Admin Staff

$55.00

Average Length of Patient Visits per Physician

15.00

Average Reimbursement Rate per Visit

$250.00

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B. Benefits Based on EHR Use (Provides a cumulative Monthly/Yearly cost savings amount)

Areas Affected by EHR

Before EHR Implementation

After EHR Implementation Cost Savings Annual Savings

Units Per Day

Per Unit Costs

$ Per Year

Units Per Day

Per Unit Costs

$ Per Year Savings / Month

Materials Benefits

New Patient Charts 20 $10 $73,000 20 $10.00 $73,000 $0 $0.00

Medical History Sheets

100 $2 $73,000 100 $0.10 $3,650 ($69,350) ($832,200.00)

Faxed Information 60 $5$109,500 10 $5.00 $18,250 ($91,250) ($1,095,000.00)

Printer Paper 1000 $0 $54,750 500 $0.15 $27,375 ($27,375) ($328,500.00)

Mailings 500 $0 $67,525 0 $0.37 $0 ($67,525) ($810,300.00)

Super bills 5 $200$365,000 0 $200.00 $0 ($365,000) ($4,380,000.00)

Coding - Charge Capture

100 $10$365,000 100 $0.10 $3,650 ($361,350) ($4,336,200.00)

Estimated Savings ($981,850) ($11,782,200.00)

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C. Staff Benefits Based on EHR Use (Provides Time and Cost savings amount)

Areas Affected by EHR

Before EHR Implementation

After EHR Implementation Cost Savings Annual Savings

Time Benefits Units Per Day

Per Unit Mins

Minutes / Mth

Units Per Day

Per Unit Mins

Minutes Per Mth

Savings / Month

Chart Pulls 100 7.50 821,250.00

39 7.50 320,287.50 (500,962.50) (6,011,550.00)

Chart Filing/Transfers

30 90.00 985,500.00

0 90.00 0.00 (985,500.00) (11,826,000.00)

Prescribing Refills, Callbacks & Errors

50 0.00 0.00 0 3.00 0.00 0.00 0.00

Dictation Time 100 5.00 182,500.00

80 5.00 146,000.00 (36,500.00) (438,000.00)

Notes Per Day

Avg Cost Per Line

Costs Per Month

Notes Per Day

Avg Cost Per Line

Costs Per Month

Savings / MonthAnnual Savings

Transcription 40 0.15 43,800.00

20 0.15 21,900.00 (21,900.00) (262,800.00)

Estimated Additional Patients Seen With EHR (101,531) (1,218,370)

Total of Staff Time Saved (Minutes) (1,522,962.50) (18,275,550.00)

Staff $ Savings ($1,396,048.96) ($16,752,587.50)

Estimated Financial Benefit with Increased Patients

($25,382,708.33) ($304,592,500.00)

04/19/23



D. Benefits of Reduced Storage Space using EHR

Office Space Sq Ft $ / Sq Ft

Per Mth$ Per Mth

Sq Ft $ / Sq Ft Per Mth

$ Per Mth

Savings Per Year

Medical Records Storage Space

100 $5.00 $500.00 50 $5.00 $250.00 ($250.00) ($3,000.00)

Total Monthly Savings/Cost of EHR ($27,782,757.29) ($333,393,087.50)

* Values calculated with negative $ indicates cost saving in the indicated areas

E. Cost of EMR Package

Costs of Total Year 1 Year 2 Year 3 Year 4 Year 5Internet/Network $212,000 $17,667.00 $8,833.00 $5,889.00 $4,417.00 $3,533.00Software $200,000 $16,667.00 $8,333.00 $5,556.00 $4,167.00 $3,333.00Hardware $425,000 $17,708.00 $17,708.00 $11,806.00 $8,854.00 $7,083.00Implementation $652,000 $27,167.00 $27,167.00 $18,111.00 $13,583.00 $10,867.00Maintainance $15,000 $625.00 $625.00 $417.00 $313.00 $250.00Training $200,000 $8,333.00 $8,333.00 $5,556.00 $4,167.00 $3,333.00TOTAL EMR COST $1,492,000 $88,167.00 $70,999.00 $47,335.00 $35,501.00 $28,399.00

Yearly Cost Savings of EHR After Monthly Payment EHR of System

($333,304,920.50) ($333,322,088.50) ($333,345,752.50) ($333,357,586.50) ($333,364,688.50)

04/19/23

Relationship of RIO and Complexity of Environments

Lynn Harold Vogel, PhD. Finding Value from IT Investments: Exploring the Elusive ROI in Healthcare. Journal of Healthcare Information Management — Vol. 17, No. 4. October 14, 2003

04/19/23

Common Approaches to ROI

• The common approach to VistA:

• 1. Identify the business processes affected by IT – these are all the standard operating procedures for the hospital, clinic or physician office

• 2. Estimate current costs per transaction – estimate $1 per pull of each hardcopy file

• 3. Estimate future cost per transaction after IT investment – estimate $.10 cents per transaction

• 4. Estimate the net yearly cost savings – based on # of queries and patient bed size

04/19/23

Overview of Proposed Method

• Gather Objective Data. Gather information on cost of IT, use of IT and revenues of the organizational unit or the entire organization. Gather data on at least three longitudinal time periods or three cross-sectional units of organization within one time period.

• Verify Expected Associations. If returns can be attributed to IT investment, there must be an association among cost of IT, use of IT and revenues.

• Verify Causality. Test whether increased revenue has led to more IT use or vice versa.

• Calculate ROI. If IT investment can be assumed as the reason for growth in revenue, calculate a rate of return.

04/19/23

Gather Objective Data

• Gather information on cost of IT, use of IT and revenues of the organizational unit or the entire organization. Gather data on at least three longitudinal time periods or three cross-sectional units of organization within one time period.

• Current – paper based office/clinic/hospital– Fixed

• Salaries, Fringe, etc.• Office Supplies (Files, paper etc.)• Storage (cabinets, room space and off-site)• Legacy support

– Variable• Patient error rates• Lost records• Illegible records

04/19/23

Verify Expected Associations

• If returns can be attributed to IT investment, there must be an association among cost of IT, use of IT and revenues.

• VistA Cost of IT– Hardware, Software, peripherals, printers– Assessment and Change of Business Process Reengineering– Legacy support, interfacing, transition– On going Training for Clinical and Technical support

• Use of IT – Why change?– Improved Patient Safety– Reduce personnel cost– Manage shortages of Nursing staff

• Revenue?– Do you intend on providing more services?– Will the change impact revenue stream?

04/19/23

Verify Causality

• Test whether increased revenue has led to more IT use or vice versa

• Increased Revenue– Is this system adding to revenue? If not, when?

• Use– Are Doctors and Nurses using the System or are

they reverting back to old system?

Market Definition for VistA

04/19/23

Healthcare Market Segments

• The healthcare market has been categorized into four distinct segments. The four categories are:

• Market Segment 1: Hospital and Hospice Services

• Market Segment 2: Community Hospitals

• Market Segment 3: Medical Centers

• Market Segment 4: Health Networks

04/19/23

Number of Facilities • *Hospice: 35,000+• Hospital Facilities: 2,267

Capacity • Inpatient Bed Range: 0 - 99

Typical Line of Business • Skilled Nursing• Diagnostic Services• Consultation Services

Average Length of Patient Stay

• ALOS Range: Outpatient to Six Months

Clinical Staff Composite • Transitory Workforce: 250 Associated Staff - Consulting Physicians - Certified Nurse Aides - FTE Registered Nurses

Organizational Structure • Inpatient Hospital Care• Community Based Care

Net Revenue • Range: $15,000,000 to $90,000,000

Median Payor Mix • Medicaid: 60%• Medicare: 20%• Managed Care: 10%• Commercial Insurance: 10%

Hospital and Hospice Care

This market segment is defined by organizations that provide general inpatient care and hospice services.

The workforce is composed of clinicians that frequently practice within local areas. Clinicians are supported by skilled full time employees.

These facilities rely upon a composite of consulting professionals and partnerships with larger hospitals. Organizational structures are flat with individuals performing several roles.

* American Hospital Association Survey (USA Only): 2003

Market 1

04/19/23

Change Imperative

s

Client Automation Requirements

Prioritized Selection Criteria

Strategic Objectives

• Standardize Documentation

• Increase Information Access

• Coordinate Providers

• Electronic Medical Record - Clinical Documentation - Medication Administration - Results Documentation - Scheduling

• Cost Pricing Strategy• Core Functionalities• Reliable Solutions• Remote Hosting• Short Implementation• Complete IT Support

• Optimize Financial Management

• Increase Documentation Compliance

• Coordinate Care

Hospital and Hospice Care

These organizations are frequently challenged by health information management. Narrow sources of funding and revenue constraints dictate efficient care documentation for reimbursement, regulatory compliance and provider coordination.

IT solutions should focus on core segments of clinical workflow. This market segment seeks solutions that are quickly implemented, highly supported and require limited customization. Stakeholders require that solutions enhance operations while allowing organizational attention to remain upon patient care.

Vendors must offer full automation of the documentation with an integrated health data repository. Automated medication administration, transcription entry, results viewing and scheduling.

The implementation of solutions should center upon small cross-trained teams on-site for brief periods. This team should then be supported by remotely located associates for limited software customization, workflow design, training and adoption management services. Hardware solutions should focus upon remote hosting solutions.

Market Profile 1

04/19/23

Number of Facilities • *Community Hospitals: 2,739


Typical Lines of Business

• General Medicine • Emergency Services

Average Length of Stay • ALOS Range: 4.2 to 8 days

Clinical Staff Composite • Stable Work Force: 250 - 800 FTE - FT Physicians - FTE Registered Nurses - FTE Ancillary Staff

Organizational Structure

• Full In-House Ancillary Services• Remotely Located Clinics• Coordinated Hospice Care


Median Payor Mix - Commercial Insurance: 40% - Medicare: 30%- Managed Care: 25% - Medicaid: 5%

Community Hospitals

The market segment is defined by small community hospitals that provide general practice care to communities within a region.

The clinical workforce is stable with low turnover and is composed of full time physicians and support staff.

The facilities serve as a central base for medical services in support of area clinics and community based care.


Market 2

04/19/23

Change Imperatives




• Decrease Documentation Time

• Increase Compliance

• Centralize Information

• Coordinate Departments

• Optimize Revenue

• Electronic Medical Record

- Documentation Templates

- Electronic Medication Administration Record (EMAR)

- Results automation - Messaging - Deficiency Reporting - Charge Capture

• Cost / Pricing Strategy

• Cross Departmental Solutions

• Customization• Implementation

Methodology• IT Support Model

• Increased Productivity

• Financial Management

• Documentation Compliance

Community Hospitals

The dominant challenges of these organizations is the centralization of health information, staff productivity, treatment coordination and financial management.

Departments require access to patient treatment information to standardize and communicate patient care. Emphasis is placed upon departmental specific functionality. Treatment documentation must enhance productivity while facilitating revenue capture.

Vendor solutions should focus on disciplinary workflow, orders management, results/image viewing, financial management and automated interdepartmental workflow. Stakeholders value process re-design and comprehensive IT support that establishes internal expertise.

The implementation teams should work on-site for limited periods to collect data on workflow design, software customization, stakeholder engagement and training. Hardware solutions should offer on-site solutions only.

Market Profile 2

04/19/23

Number of Facilities • *Medical Centers: 539


Typical Lines of Business

• Highly Specialized Areas: - Oncology - Cardiology - Surgery - Pediatrics

Average Length of Stay • ALOS: 5.6 Days

Clinical Staff Composite • Dynamic Workforce: 800 – 1,500FTE - Physicians - Ancillary Services - Registered Nurses - Specialized Clinical Staff

Organizational Structure - Ancillary Services - Specialized Clinics - Remote Outpatient Clinics



Medical Centers

The market segment is defined by large hospitals within metropolitan areas. A full spectrum of patient care is offered. These facilities have frequently undergone merger and integration into regional health networks.

Segments of the clinical workforce are prone to turnover and are defined by specialized areas of expertise. Extensive provider partnerships are formed to offer patients comprehensive services. Management organization is hierarchal with specialized support departments. Executive stakeholders value scaleable technology with vision.


Market 3

04/19/23

Change Imperatives




• Streamline Processes

• Integrate Treatment Data

• Automate Workflow

• Increase Access• Facilitate

Communication

• CPOE - Order Alerts - E Signature• Electronic Medical

Record - Documentation

Templates - EMAR - Results

Documentation - Charge Capture - Device Interface

• Scaleable Vision• Enterprise

Solutions• Cost / Pricing

Strategy• Reference Sites• Technology/

Change Management

• Service and Support

• Increase Productivity

• Standardize Care • Increase Revenue• Maximize

Information Management

Medical Centers

Organizations within this segment are focused upon streamlining workflow within departments, standardization of care, integration of treatment data and the automation of financial information.

The highly siloed departments within these organizations challenge the standardization and continuity of care across organizational boundaries. Frequent bottlenecks occur in the communication and formatting of treatment and financial data. Merger processes frequently cause fragmentation of organizational processes.

Vendor solutions should focus upon solutions that standardize and automate discipline specific workflow across departments and facilities. A centralized data repository with a standardized user interface must be accessible regardless of location. Departmental hardware must be interfaced to an EHR solutions for automated data capture.

The implementation approach should utilize a team of specialized clinical experts and project management on-site for extended periods to perform workflow design, system customization and configuration and adoption management services.

Market Profile 3

04/19/23

Number of Facilities • *Health Networks: 249

Capacity • Inpatient Beds: 500+

Typical Lines of Business • Nationally/Regionally Recognized: - Cardiology - Research - Oncology - Surgery - Teaching - Neurology

Average Length of Stay • ALOS 4.2 Days

Clinical Staff Composite • Dynamic Workforce: 1,500+ - Physicians - Specialized Clinical Disciplines - Registered Nurses - Research and Teaching Staff - Allied Clinical Disciplines

Organizational Structure • Facilities are remotely based - Inpatient Beds - Universities - Ancillary Services - Support Facilities - Outpatient Clinics

Net Revenue • Range: $200,000,000+


Health Networks

The market segment is defined by full spectrum health centers that are regionally and nationally for specific areas of clinical excellence. These providers are organized within large health maintenance networks and teaching organizations.

The hierarchal organization contains significant specialization within clinical and support silos. Turnover of staff is significant due to teaching functions and the broad lines of business within competitive markets.


Market 4

04/19/23

Health Networks

Organizational challenges center around the competing objectives within the large hospital departments. Departmental siloes fragment workflow across departments. This results in the constriction of patient treatment information, continuity of care and standardization of processes. IT focus is placed upon solutions that seamlessly transmit data and automate interdepartmental workflow.

Integrated solutions must demonstrate the flexibility to address multiple departmental objectives such as capturing charges while facilitating teaching and care documentation. Stakeholders require that solutions address workflow issues within the framework of a clear return on investment model. These organizations prefer to own initiatives with internal IT expertise. Vendors must present a scaleable technological vision with clear implementation and change management strategies.

Change Imperatives




• Streamline Workflow

• Facilitate Communication

• Maximize Revenue

• Decrease Documentation Time

• Increase Quality of Patient Care

• CPOE - Rules / Knowledge based - Order Alerts - E Signature • Electronic Medical Record - Image & Results Viewing - Device Interface • EMAR• Automated Administrative

Reports• Remote / Wireless Access• Charge Capture / Authorization

• Vision• Solution

Functionality• Cost Pricing

Strategy• Implementati

on Methodology

• Service / Support Model

• Site References

• Process Standardization

• Organizational Integration

• Financial Management

• Increased Productivity

Market Profile 4

Cost Model for VistA

04/19/23

TCO Model Assumptions

Modeling AssumptionsSmall Medium Large

Beds 200 425 725

Physicians 150 300 600Nurses 450 900 1575Ancilliary Staff 100 150 225Total Clinican User ID's 700 1350 2400

HIM user IDs 5 10 18Clerks IDs 50 88 150PA user IDs 15 25 35Total Non-Clinican User ID's 70 123 203

Concurrent Users 770 1473 2603Concurrent User % Increase 200 368 651Licensure Increase Factor 84.1% 225.4%

Net Revenue before expense 100.0% 116.8% 167.6%

Net Revenue before Expenses $125,000,000 Small$200,000,000 Medium$325,000,000 Large

04/19/23

Small Hospital TCO Comparison

Hospital Sizesmall

Cerner IDX Epic QuadraMed Average Minus -25% Plus 25%Total One-Time Software Costs $1,834,901 $2,847,311 $2,778,311 $1,584,063 $2,261,146.50 $1,695,859.88 $2,826,433.13

Total One-Time Implementation Costs $5,338,732 $5,570,345 $5,570,345 $3,770,633 $5,062,513.75 $3,796,885.31 $6,328,142.19

Total One-Time Vendor Support Costs $800,048 $1,571,884 $1,458,879 $464,355 $1,073,791.50 $805,343.63 $1,342,239.38Total Ongoing Client Support Costs $1,160,000 $1,160,000 $1,160,000 $1,160,000 $1,160,000.00 $870,000.00 $1,450,000.00Total $9,133,681 $11,149,540 $10,967,535 6,979,051$ $9,557,451.75 $7,168,088.81 $5,376,066.61

Hospital Revenue (4 years only) $500,000,000 $500,000,000 $500,000,000 $500,000,000 $500,000,000 $500,000,000 $500,000,000Operating Budget $475,000,000 $475,000,000 $475,000,000 $475,000,000 $475,000,000 $475,000,000 $475,000,000

Ongoing Costs as % of Operating Budget 0.41% 0.58% 0.55% 0.34% 0.47% 0.35% 0.59%

04/19/23

Medium Hospital TCO Comparison

Hospital Sizemedium

Cerner IDX Epic QuadraMed Average Minus -25% Plus 25%Total One-Time Software Costs $2,120,194 $3,264,444 $3,201,754 $1,806,573 $2,598,241.25 $1,948,680.94 $3,247,801.56Total One-Time Implementation Costs $7,623,151 $7,907,089 $7,907,089 $5,657,449 $7,273,694.50 $5,455,270.88 $9,092,118.13

Total One-Time Vendor Support Costs $800,048 $1,571,884 $1,458,879 $464,355 $1,073,791.50 $805,343.63 $1,342,239.38Total Ongoing Client Support Costs $3,040,000 $3,040,000 $3,040,000 $3,040,000 $3,040,000 $2,280,000 $3,800,000Total $13,583,393 $15,783,417 $15,607,722 10,968,377$ $13,985,727 $10,489,295 $17,482,159

Hospital Revenue (4 years only) $800,000,000 $800,000,000 $800,000,000 $800,000,000 $800,000,000 $800,000,000 $800,000,000Operating Budget $760,000,000 $760,000,000 $760,000,000 $760,000,000 $760,000,000 $760,000,000 $760,000,000Ongoing Costs as % of Operating Budget 0.51% 0.61% 0.59% 0.46% 0.54% 0.41% 0.68%

04/19/23

Large Hospital TCO Comparison

Hospital Sizelarge

Cerner IDX Epic QuadraMed Average Minus -25% Plus 25%Total One-Time Software Costs $2,981,372 $4,523,592 $4,479,948 $2,478,238 $3,615,787.50 $2,711,840.63 $4,519,734.38Total One-Time Implementation Costs $10,587,278 $10,609,591 $10,609,591 $7,826,371 $9,908,207.75 $7,431,155.81 $12,385,259.69

Total One-Time Vendor Support Costs $800,048 $1,571,884 $1,458,879 $464,355 $1,073,791.50 $805,343.63 $1,342,239.38Total Ongoing Client Support Costs $5,480,000 $5,480,000 $5,480,000 $5,480,000 $5,480,000 $4,110,000 $6,850,000Total $19,848,698 $22,185,067 $22,028,418 16,248,964$ $20,077,787 $15,058,340 $25,097,233

Hospital Revenue (4 years only) $1,300,000,000 $1,300,000,000 $1,300,000,000 $1,300,000,000 $1,300,000,000 $1,300,000,000 $1,300,000,000Operating Budget $1,235,000,000 $1,235,000,000 $1,235,000,000 $1,235,000,000 $1,235,000,000 $1,235,000,000 $1,235,000,000Ongoing Costs as % of Operating Budget 0.51% 0.57% 0.56% 0.48% 0.53% 0.40% 0.66%

04/19/23

Contacts

Claudine Beron, PMPInitiate Solutions, LLC

703-880-7365703-599-1203 cell

[email protected]

04/19/23

VistA Links

VistA-CPRS Demo - http://www1.va.gov/CPRSdemo/

CMS - VistA Office EHR – http://www.cms.hhs.gov/quality/pfqi.asp#Vista-Office%20EHR

Indian Health - RPMS - http://www.ihs.gov/Cio/RPMS/index.cfm

DoD - CHCS http://www.tricare.osd.mil/peo/citpo/projects.htm

Pacific Hui - http://www.pacifichui.org/

WorldVistA - http://www.worldvista.org

Hardharts.org - http://www.hardhats.org/

Vista Software Alliance- http://www.vistasoftware.org

04/19/23

VistA Article Links

• VistA - U.S. Department of Veterans Affairs National Scale Healthcare Information Systems (HIS), International Journal of Medical Informatics, February, 2003.

• http://www1.va.gov/cprsdemo/docs/VistA_Int_Jrnl_Article.pdf

• The Veterans Health Administration: Quality, Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care , The American Journal of Managed Care, November, 2004.

• http://www1.va.gov/cprsdemo/docs/AJMCnovPrt2Perlin828to836.pdf

• Comparison of Quality of Care for Patients in the Veterans Health Administration and Patients in a National Sample , Annals of Internal Medicine, December, 2004.

• http://www1.va.gov/cprsdemo/docs/Internal_Medicine_Article_on_VistA.pdf

• The Best Care Anywhere , Washington Monthly, January/February, 2005

• http://www1.va.gov/cprsdemo/docs/Article_Washington_Monthly_Jan_Feb_2005.doc

04/19/23

VistA Reading

1. West; O’Mahony, “Contrasting Community Building in Sponsored and Community Founded Open Source Projects,” Proceedings of the 38th Annual Hawai‘I, International Conference on System Sciences, Waikoloa, Hawaii, January 3-6, 2005. http://opensource.mit.edu/papers/westomahony.pdf

2. Goldstein, Ponkshe, Maduro, “Profile of Increasing Use of OSS in the Federal Government and Healthcare” http://www.medicalalliances.com/downloads/files/Open_Source_Software-Government_and_Healthcare_White_Paper-Medical_Alliances_2.doc

3. The Veterans Health Administration: Quality, Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care , The American Journal of Managed Care, November, 2004. http://www1.va.gov/cprsdemo/docs/AJMCnovPrt2Perlin828to836.pdf

4. Comparison of Quality of Care for Patients in the Veterans Health Administration and Patients in a National Sample , Annals of Internal Medicine, December, 2004. http://www1.va.gov/cprsdemo/docs/Internal_Medicine_Article_on_VistA.pdf

5. The Best Care Anywhere , Washington Monthly, January/February, 2005. http://www1.va.gov/cprsdemo/docs/Article_Washington_Monthly_Jan_Feb_2005.doc

6. Brown, Lincoln, Groen, Kolodner, “VistA – US Department of Veterans Affairs National Scale HIS,” International Journal of Medical Informatics. February 2003 http://www1.va.gov/cprsdemo/docs/VistA_Int_Jrnl_Article.pdf

7. Munnecke, Tom, “Personal Health: From Systems to Space,” July 19, 2002

04/19/23

EHR and ROI Reading

• Sharpening the Case for Returns on Investment from Clinical Information Systems, Kevin Featherly, Dave Garets, Mike Davis, Pat Wise and Pat Becker http://www.longwoods.com/product.php?productid=18656&cat=465&page=1

• Medical Records in the Greater Los Angeles State Veterans Home: A Unique Opportunity to Improve Quality of care for May of 2006. Literally just scanned it, but could help us position for DC. Take a look.http://lewis.sppsr.ucla.edu/publications/studentreports/2006_TownsendEtAl.pdf#search=%22Doug%20Babcock%2C%20VHA%22

• EHR and the Return on Investment. HIMSS http://www.himss.org/content/files/EHR-ROI.pdf#search=%22EHR%20ROI%22

• Exploring the Elusive ROI in Healthcare http://www.himss.org/content/files/jhim/17-4/vogel.pdf

• Value Measurement and Return on Investment for EHRs. Doug Goldstein, Peter Groen. July 2006 http://www.hoise.com/vmw/06/articles/vmw/LV-VM-08-06-19.html

• Mark Leavitt, MD, PhD, FHIMSS. Case for HER in Small Physician Offices - Physician Office QIOSC National Call -- January 11, 2005

• Current Return on Investment (ROI) Literature for EHRs in Small- to Medium-Sized Physician Offices. Lumetra http://www.providersedge.com/ehdocs/ehr_articles/Current_ROI_Literature_for_EHRs_in_Small_to_Medium-Sized_Physician_Practices.pdf#search=%22Current%20Return%20on%20Investment%20(ROI)%20Literature%20for%20EHRs%20in%20Small-%20to%20Medium-Sized%20Physician%20Offices%22

• EHR Estimated Cost-Savings Worksheet. Lumetra http://www.sdfmc.org/ClassLibrary/Page/Information/DataInstances/226/Files/1176/Web_EHR_ROI_Estimated_Cost_Savings_Worksheet_Guide.pdf#search=%22EHR%20Estimated%20Cost-Savings%20Worksheet%22

• 50 Reasons to get an EHR: Quick tips from your connected colleagues will show you how EHRs change the way they work—for the better. Robert Lowes SENIOR EDITOR . http://www.cerner.com/public/filedownload.asp?LibraryID=17504

04/19/23

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