iProtean— New Tool Helps Boards Assess Progress and ROI of EHRs

The Institute of Medicine’s (IOM) Digital Learning Collaborative and members of the Healthcare Financial Management Association (HFMA) have developed a new model that helps hospital executives and boards assess the return on investment of their electronic health record (EHR) systems and how to best configure these systems “to achieve optimal value,” according to a recent news release from HFMA.


EHR technology typically has been an area where board members and even some experienced executives feel vulnerable. It has been difficult to compare the various studies about implementation and benefits of EHRs because the differences in those studies tend to be significant. So far, assessing which differences arise because of the technology itself and the manner of its deployment and which differences are related to the methods used to assess costs and benefits has not been particularly successful or helpful.


In addition, data used in evaluating EHRs came from highly capitated systems. Healthcare finance experts have noted that the experience in these capitated systems may not clearly translate to other types of hospitals and systems, making it difficult to identify, for example, net financial benefits for hospitals. As a result, some board members have been reluctant to participate in an assessment of the costs and benefits of EHRs.


According to authors of a discussion paper on the model, “Return on Information: A Standard Model for Assessing Institutional Return on Electronic Health Records,” these common logistical and conceptual challenges have even hindered the adoption and implementation of EHRs.


The new model takes a standard approach to calculating the financial costs, benefits and implications of implementing and optimizing EHRs and related technology. It includes the following:

  • A catalog of categorized benefits, expenses and potential revenue impacts, and identifies the areas where each may exist
  • An alignment of benefits with the stated goals of the Office of the National Coordinator for Health IT’s meaningful use standards
  • Assessments of whether benefits are expected to accrue to the provider based on various payment methods
  • Designation of whether revenue impacts are expected to be negative or positive
  • Prioritization of benefits and revenue impacts  by their ability to quantify financial impact and the relative scale of financial impact


“A standard model would provide credibility in discussion with other executives, board members, and even in negotiations with EHR vendors . . . and the comparability the model provides would help identify more efficient approaches to implementation, based on differences in experiences between provider sites, and would accelerate learning about best practices.” wrote the co-chair of IOM’s Digital Learning Collaborative in a Health Affairs blog post.


The authors of the report expressed the hope that the model will “[accelerate] improving the business case for EHR implantation and advanced information technologies that improve the safety, quality and efficiency of health care and foster a learning health system.”


(“IOM Releases EHR Cost/Benefit Calculation Framework and Tool,” HFMA Weekly News, January 10, 2014)


(For a copy of the report and the tool, please contact Carlin Lockee at clockee@iprotean.com)



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