¶ … Vogel, Lynn. (2003). Finding value from investments: Exploring the elusive ROI in healthcare.
Journal of Healthcare Information Management, 17(4): 20-28.
When introducing a new IT system to the workplace, the inevitable initial expense is usually justified by the logic that it will improve the organization's financial health and productivity over the long-term. However, as noted by Lynn Vogel in her article "Finding value from investments: Exploring the elusive ROI in healthcare," calculating ROI in healthcare presents some unique challenges. Vogel notes that the role of IT has shifted from primarily one of labor substitution in the 1990s to that of quality enhancement. In theory, the use of IT such as electronic record-keeping should decrease medical errors. However, from the perspective of the industry, IT investments do not seem to always produce the tangible results that investments in technology related to patient...
"With the added complication of significantly reduced reimbursement for care from both public and private payers, the pressure on healthcare industry managers to justify their information technology investments has increased significantly" (Vogel 2003: 22).
The goals of healthcare are also slightly different from other industries. While other organizations primarily define themselves by profitability, ultimately healthcare's role is to make sick people well, and to sustain the industry infrastructures which enable organizations to accomplish this mission (Vogel 2003: 22). Investments in new technology must improve patient care and they must also not unduly strain the budgets of cash-strapped organizations and take away much-needed resources from other aspects of the practice of medicine. The benefits of a new IT system must be weighed against the opportunity costs of investing…
