Electronic medical records as return on investment strategy in healthcare

Return on Investment Health Management

Health Management and Services: Return on Investment Strategy,

Solutions and EMR as an Incentive for Increased ROI

As the medical field continues to grow and therefore continues to become more and more complex and complicated -- especially in viewing the integration of health services and cost analysis -- one can understand the need for critical improvements in the area of health management and services in order to ensure that companies receive the full benefit of the health management solutions which they employ. Healthcare organizations and the physicians they support are vital to the well-being of the human race, yet, when it comes to the balance sheet, many of these entities are facing real emergencies of their own, as costs for medicine, equipment, and indigent care are increasing -- all while reimbursements are going down (Mannino, 2009, p.2).

With increasing costs and diminishing profits, health systems have been forced to cut their expenses significantly, which makes the need for an increased return on investment absolutely vital not just to the success of these organizations, but to their continued existence within the medical landscape. In viewing the current literature available regarding the topic, one can begin to understand the strategies and solutions that may be employed in order for these medical organizations to properly invest their limited funds in a way that will secure their respective success in the future. Additionally, the basis for a strategically-implemented return-on-investment solution can be set forth as a guidepost for more specific health systems improvement on a wider scale.

Strategies for Health Systems Improvement

As the patient population continues to increase across the nation, the medical facilities which deal with these patients comparably deal with the same influx, increasing facility costs and delving into facility budgets. In understanding this basis, one can see that certain strategies and solutions must be found in order to resolve this issue, as well as other health system issues which deal with the patient population. There are many available solutions that have been proposed in the field to ensure that such medical facilities and organizations reap the benefits of their limited investments. However, the question arises as to which of these solutions appear to be the most profitable?

To begin viewing the proposed solutions to the return-on-investment issue within the medical field, one must first understand the basis of a "return-on-investment" as a concept. A return-on-investment (ROI) is the profit that is generated by the money a business owner puts into a business, and is usually expressed as a percentage return (Murray, 2010, p.1). In the healthcare setting, one can understand -- even with only a minimal knowledge of the field -- that the expenses accumulated to run such endeavors are exceedingly vast. Therefore, organizational budgets must be clearly analyzed, and areas of investment must be clearly and fully researched before any revenue is placed into an area of investment.

In order to more successfully serve a given patient population, many healthcare organizations and facilities have adopted an "ROI culture," which strategically employs solutions, suggestions, and business goals into a company's monetary decisions in order to cut waste and increase profits. One such strategy to improve the health systems issue of ROI maximization is the dissection of the benefits of workforce management systems (Mannino, 2009, p.2). Author William Mannino notes that the greatest amount of waste can often be found in the labor pool, as in most organizations, the largest internal cost -- is people (Mannino, 2009, p.2). He notes that even a one percent reduction in total payroll costs -- without layoffs -- would deliver significant financial benefits, at little cost to employees, which would free up significant funds to invest in other areas, such as updated software programs, which set place in organizations, have the ability to streamline costs and actions within that organization.

The implementation of recently-utilized and continuously-enhanced technology such as electronic medical records have proven vastly successful in many different organizations across the country, streamlining processes, decreasing time spent, and increasing accuracy. Such reporting systems are relatively inexpensive to implement, especially in viewing the significantly increased ROI figures that have been experienced by many institutions since implementing these features. Electronic Medical Records (EMR), which streamline medical records and eliminate the need for outdated paper recording systems, have in recent years, become adopted by many organizations who have cited both health and financial benefits stemming from the use of EMR and overarching health information technology (HIT). In 2005, Health Affairs, estimated that the potential savings and costs of widespread adoption of EMR systems count eventually save more than $81 billion annually, by improving healthcare efficiency and safety (Bigelow, et al. 2005, p. 1103). Such an estimation has yet to be seen to the level projected, but in viewing the implementation of the EMR systems in certain areas, one can see that the ROI is in fact much higher than could have been anticipated originally.

Strategic Plan

In beginning a strategic plan for implementing such strategy for increasing facility ROI, one must take into account the step-by-step approaches needed to ensure that investments will pay off in the end. Such planning is not merely a numbers game, despite the importance of measuring elements of preparedness to determine any return on investment (Jensen, 2011, p.3). Instead, it is more so a measure of the relevant elements of preparedness, encompassing a nearly endless list of the numbers of things that are actually relevant to any new endeavor.

The current economic environment has taken a significant toll on the ability of any entity to increase revenue, or engage in new investments. In recent years, even investments that would have proven to be foolproof in years past, under the overarching economic crisis, sent companies into ruin, forced to deal with new debt that in year past would have been new profit margins. As such, the current mood when surrounding the idea of investment continues to be one of uncertainty. This uncertainty has been escalated to an even higher level when looking into the medical field. The status of the American healthcare field has been comparably uncertain in recent years due to the economic recession. Healthcare has become more expensive, more and more patients remain uncovered by insurance, and medical facilities and medical corporations have been left to pick up the pieces in terms of continuing to operate with a far lower bottom line.

The implementation of an EMR system holds the ability to introduce significant and valuable measures of ROI including minimized costs over time and a plethora of other benefits including transforming the way care is delivered, reducing medical errors, increasing internal efficiencies for clinical and administrative users, improving revenue capture among a host of other critical benefits; the promise of EMR benefit is big (Eastman and McCarthy, 2010, p. 12). However, despite the promise of a brighter future and an increased return on investment, undertakers of such a strategic makeover within a facility must understand that with the implementation of a new IT system such as EMR, comes unparalleled disruption to the day-to-day dealings of any facility. As such, strategic planning must be undertaken to offset such disruption, as any long-term financial benefits gained from the implementation of EMR should not have to first cover the losses that occurred while the initiative was put into place.

Strategic planning for such implementation must first begin with the familiarization with a facility's staff with the program being put into place. Even with minor adjustments, the overarching picture of success cannot be achieved if the individuals working with such adjustments do not see the need for these adjustments at all. In ensuring that the staff has a firm and full grasp of the changes at hand, managers implementing new changes can be assured that changes can go off without a hitch with the full proficiency and acceptance of the staff at hand.

Even in viewing a change as initially complex as EMR integration, in allowing staff to be present for the full implementation with an initial background as to why such changes are being made, the eventual turnover into usage of a new program or adjustment will likely be far more seamless than if staff were only introduced to changes upon their total completion. In working in this manner, it can be assured that the strategic project plan and the end result will never be confused for one another, but will instead work with one another on a more transitional basis rather than an abrupt change. In undergoing such changes, it has been said that "technology adoption is kind of like herding cats; its unpredictable, and you need to maintain flexibility to respond as things evolve" (Eastman and McCarthy, 2010, p. 21). As such, any strategic plan for implementation must have the ability to be reactive rather than concrete. Very few strategic plans go off without even the smallest hitch, and the ability to work with these setbacks rather than be blindsided by them is key to transitioning and to ultimate success.

Arguably, the most critical step in the implementation process of any new initiative, such as EMR, happens far after that implementation or technology is in place -- teaching end users to successfully navigate and utilize the new initiative in a way that consistently supports the mission at hand and leads to ultimate and complete proficiency. In an EMR systems plan, for instance, nurses, doctors, and ancillary staff should receive training separately, as each uses different clinical pathways, and each is accustomed to viewing patients' information in different ways (Davies, 2006, p.9). As the old adage -- slow and steady wins the race -- notes the superiority of gradual and distinct success, so does a successful implementation plan within any organization, especially one that contains the complexities of the healthcare field.

Key Findings

As seen, in today's economic environment, with increasing costs and decreasing profits, few strategies and solutions exist to increase a healthcare entity's return on investment than technology-bases features such as EMR systems implementation. Many organizations have long succeeded under the notion that you have to "give a buck to make a buck" and the same is true in the healthcare field. The field of healthcare is one, if not the most, consistently-evolving entities within society, and as such, new strategies and solutions must be implemented in order to deal with the evolution and increased complexities that arrive from catering to an ever-expanding patient population.

Strategies to increase a healthcare facility's ROI, such as implementing EMR systems have proven to benefit a facility's profit margin significantly in the years following such implementation. As noted, most facilities that chose to undertake such an improvement see a complete payoff and begin turning a profit on new technology in a mere two and a half years. Few systems have proven so significant in the field of healthcare, and the future of society's dependence on information technology will continue to aid in the success of such solutions to any facility that chooses to implement them.

While the purpose of any healthcare-based facility is primarily to aid the public, the truth remains that no facility can do this successfully without remaining financially stable. IT strategies for the improvement of haphazard and outdated health systems issues have proven to not only benefit the financial standing of facilities which use them, but have consistently shown to provide a significant return on investment for any facility willing to take the initial plunge with an investment. As seen by the current research available, the ability to profit is there, if facilities are willing to take a chance on a new investment.