Reflect back to the health information system you proposed in Week 1. Before any health information system can be successfully implemented, there must be a team of experts who und

Chapter 7 Assessing and Achieving Value in Health Care Information Systems

Virtually all the discussion in this book focuses on the knowledge and management processes necessary to achieve one fundamental objective: organizational investments in IT resulting in a desired value. That value might be the furtherance of organizational strategies, improvement in the performance of core processes, or the enhancement of decision making. Achieving value requires the alignment of IT with overall strategies, thoughtful governance, solid information system selection and implementation approaches, and effective organizational change.

Failure to achieve desired value can result in significant problems for the organization. Money is wasted. Execution of strategies is hamstrung. Organizational processes can be damaged.

This chapter carries the IT value discussion further. Specifically, it covers the following topics:

The definition of IT-enabled value The IT project proposal Ensuring the delivery of value Analyses of the IT value challenge Definition of IT-Enabled Value We can make several observations about IT-enabled value:

IT value can be tangible and intangible. IT value can be significant. IT value can be variable across organizations. IT value can be diverse across IT proposals. A single IT investment can have a diverse value proposition. Different IT investments have different objectives and hence different value propositions and value assessment techniques. These observations will be discussed in more detail in the following sections.

Tangible and Intangible Tangible value can be measured whereas intangible value is very difficult, perhaps practically impossible, to measure.

Some tangible value can be measured in terms of dollars:

Increases in revenue Reductions in labor costs: for example, through staff layoffs, overtime reductions, or shifting work to less expensive staff members Reductions in supply costs: for example, because of improvements in purchasing Reductions in maintenance costs for computer systems

Reductions in use of patient care services: for example, fewer lab tests are performed or care is conducted in less expensive settings Some tangible value can be measured in terms of process improvements:

Fewer errors Faster turnaround times for test results Reductions in elapsed time to get an appointment A quicker admissions process Improvement in access to data Improvements in the percentage of care delivery that follows medical evidence Some tangible value can be measured in terms of strategically important operational and market outcomes:

Growth in market share Reduction in turnover Increase in brand awareness Increase in patient and provider satisfaction Improvement in reliability of computer systems By contrast, intangible value can be very difficult to measure. The organization is trying to measure such things as Improved decision making Improved communication Improved compliance Improved collaboration Increased agility Becoming more state of the art Improved organizational competencies: for example, becoming better at managing chronic disease Becoming more customer friendly Significant IT can be leveraged to achieve significant organization value. The following are some example studies:

A study that compared the quality of diabetes care between physician practices that used EHRs and practices that did not found that the EHR sites had composite standards for diabetes care that were 35.1 percent higher than paper-based sites and had 15 percent better care outcomes (Cebul, Love, Jain, & Herbert, 2011). EMC (a company that makes data storage devices and other information technologies) reported a reduction of $200 million in health care costs over ten years through the use of data analytics, lifestyle coaches, and remote patient monitoring to help employees manage health risks and chronic diseases (Mosquera, 2011). A cross-sectional study of hospitals in Texas (Amarasingham, Plantinga, Diener-West, Gaskin, & Powe, 2009) found that higher levels of the automation of notes and patient records were associated with a 15 percent decrease in the adjusted odds of a fatal hospitalization. Higher

scores in the use of computerized provider order entry (CPOE) were associated with 9 percent and 55 percent decreases in the adjusted odds of death for myocardial infarction and coronary artery bypass graft procedures, respectively. For all cases of hospitalization, higher levels of clinical decision-support use were associated with a 16 percent decrease in the adjusted odds of complications. And higher levels of CPOE, results reporting, and clinical decision support were associated with lower costs for all hospital admissions. A clinical decision support (CDS) module, embedded within an EHR, was used to provide early detection of situations that could result in venous thromboembolism (VTE). A study of the impact of the module showed that the VTE rate declined from 0.954 per one thousand patient days to 0.434 comparing baseline to full VTE CDS. Compared to baseline, patients benefitting from VTE CDS were 35 percent less likely to have a VTE (Amland et. al., 2015). Variable Even when they implement the same system, not all organizations experience the same value. Organizational factors such as change management prowess and governance have a significant impact on an organization's ability to be successful in implementing health information technology.

As an example of variability, two children's hospitals implemented the same EHR (including CPOE) in their pediatric intensive care units. One hospital experienced a significant increase in mortality (Han et al., 2005), whereas the other did not (Del Beccaro, Jeffries, Eisenberg, & Harry, 2006). The hospital that did experience an increase in mortality noted that several implementation factors contributed to the deterioration in quality; specific order sets for critical care were not created, changes in workflow were not well executed, and orders for patients arriving via critical care transportation could not be written before the patient arrived at the hospital, delaying life-saving treatments.

Even when organizations have comparable implementation skill levels, the value achieved can vary because different organizations decide to focus on different objectives. For example, some organizations may decide to improve the quality of diabetes care, and others may emphasize the reduction in care costs. Hence, if an outcome is of modest interest to an organization and it devotes few resources to achieving that outcome, it should not be surprised if the outcome does not materialize. Diverse across Proposals Consider three proposals (real ones from a large integrated delivery system) that might be in front of organizational leadership for review and approval: a disaster notification system, a document imaging system, and an e-procurement system. Each offers a different type of value to the organization.

The disaster notification system would enable the organization to page critical personnel, inform them that a disaster—for example, a train wreck or biotoxin outbreak—had taken place, and tell them the extent of the disaster and the steps they would need to take to help the organization respond to the disaster. The system would cost $520,000. The value would be “better preparedness for a disaster.”

The document imaging system would be used to electronically store and retrieve scanned images of paper documents, such as payment reconciliations, received from insurance companies. The system would cost $2.8 million, but would save the organization $1.8 million per year ($9 million over the life of the system) through reductions in the labor required to look for paper documents and in the insurance claim write-offs that occur because a document cannot be located.

The e-procurement system would enable users to order supplies, ensure that the ordering person had the authority to purchase supplies, transmit the order to the supplier, and track the receipt of the supplies. Data from this system could be used to support the standardization of supplies, that is, to reduce the number of different supplies used. Such standardization might save $500,000 to $3 million per year. The actual savings would depend on physician willingness to standardize. The system would cost $2.5 million.

These proposals reflect a diversity of value, ranging from “better disaster response” to a clear financial return (document imaging) to a return with such a wide potential range (e-procurement) that it could be a great investment (if you really could save $3 million a year) or a terrible investment (if you could save only $500,000 a year).

Diverse in a Single Investment Picture archiving and communication systems (PACS) are used to store radiology (and other) images, support interpretation of images, and distribute the information to the physician providing direct patient care. These systems are an example of the diversity of value that can result from one IT investment. A PACS can do the following:

Reduce costs for radiology film and the need for film librarians. Improve service to the physician delivering care, through improved access to images. Improve productivity for the radiologists and for the physicians delivering care (both groups reduce the time they spend looking for images). Generate revenue, if the organization uses the PACS to offer radiology services to physician groups in the community. This one investment has a diverse value proposition; it has the potential to deliver cost reduction, productivity gains, service improvements, and revenue gains.

Different Analyses for Different Objectives The Committee to Study the Impact of Information Technology on the Performance of Service Activities (1994), organized by the National ResearchCouncil (NRC), has identified six categories of IT investments in service industries, reflecting different objectives. The techniques used to assess IT investment value should vary by the type of objective that the IT investment intends to support. One technique does not fit all IT investments.

Infrastructure IT investments may be for infrastructure that enables other investments or applications to be implemented and deliver desired capabilities. Examples of infrastructure are data

communication networks, workstations, and clinical data repositories. A delivery system–wide network enables a large organization to implement applications to consolidate clinical laboratories, implement organization-wide collaboration tools, and share patient health data between providers. It is difficult to quantitatively assess the impact or value of infrastructure investments because of the following:

They enable applications. Without those applications, infrastructure has no value. Hence, infrastructure value is indirect and depends on application value. The allocation of infrastructure value across applications is complex. When millions of dollars are invested in a data communication network, it may be difficult or impossible to determine how much of that investment should be allocated to the ability to create delivery system–wide EHRs. A good IT infrastructure is often determined by its agility, potency, and ability to facilitate integration of applications. It is very difficult to assign return on investment (ROI) numbers or any meaningful numerical value to most of these characteristics. What, for instance, is the value of being agile enough to speed up the time it takes to develop and enhance applications? Information system infrastructure is as hard to evaluate as other organizational infrastructure, such as having talented, educated staff members. As with other infrastructure,

Evaluation is often instinctive and experientially based. In general, underinvesting can severely limit the organization. Investment decisions involve choosing between alternatives that are assessed for their ability to achieve agreed-on goals. For example,if an organization wishes to improve security, it might ask whether it should invest in network monitoring tools or enhanced virus protection. Which of these investments would enable it to make the most progress toward its goal? Perspective Four Types of IT Investment Complementing the NRC study, Jeanne Ross and Cynthia Beath (2002) studied the IT investment approaches of thirty companies from a wide range of industries. They identified four classes of investment:

Transformation. These IT investments had an impact that would affect the entire organization or a large number of business units. The intent of the investment was to effect a significant improvement in overall performance or change the nature of the organization. Renewal. Renewal investments were intended to upgrade core IT infrastructure and applications or reduce the costs or improve the quality of IT services. Examples of these investments include application replacements, upgrades of the network, or expansion of data storage. Process improvement. These IT investments sought to improve the operations of a specific business entity—for example, to reduce costs and improve service. Experiments. Experiments were designed to evaluate new information technologies and test new types of applications. Given the results of the experiments, the organization would decide whether broad adoption was desirable. Different organizations will allocate their IT budgets differently across these classes. An office products company had an investment mix of experiments (15 percent), process improvement

(40 percent), renewal (25 percent), and transformation (20 percent). An insurance firm had an investment mix of experiments (3 percent), process improvement (25 percent), renewal (18 percent), and transformation (53 percent).

The investment allocation is often an after-the-fact consideration—the allocation is not planned, it just “happens.” However, ideally, the organization decides its desired allocation structure and does so before the budget discussions. An organization with an ambitious and perhaps radical strategy may allocate a very large portion of its IT investment to the transformation class, whereas an organization with a conservative, stay-the-course strategy may have a large process improvement portion to its IT investments.

Source: Ross and Beath (2002, p. 54).

Mandated Information system investment may be necessary because of mandated initiatives. Mandated initiatives might involve reporting quality data to accrediting organizations, making required changes in billing formats, or improving disaster notification systems. Assessing these initiatives is generally approached by identifying the least expensive and the quickest to implement alternative that will achieve the needed level of compliance.

Cost Reduction Information system investments directed to cost reduction are generally highly amenable to ROI and other quantifiable dollar-impact analyses. The ability to conduct a quantifiable ROI analysis is rarely the question. The ability of management to effect the predicted cost reduction or cost avoidance is often a far more germane question.

Specific New Products and Services IT can be critical to the development of new products and services. At times the information system delivers the new service, and at other times it is itself the product. Examples of information system–based new services include bank cash-management programs and programs that award airline mileage for credit card purchases. A new service offered by some health care providers is a personal health record that enables a patient to communicate with his or her physician and to access care guidelines and consumer-oriented medical textbooks.

The value of some of these new products and services can be quantifiably assessed in terms of a monetary return. These assessments include analyses of potential new revenue, either directly from the service or from service-induced use of other products and services. An ROI analysis will need to be supplemented by techniques such as sensitivity analyses of consumer response. Despite these analyses, the value of this IT investment usually has a speculative component. This component involves consumer utilization, competitor response, and impact on related businesses.

Quality Improvement

Information system investments are often directed to improving the quality of service or medical care. These investments may be intended to reduce waiting times, improve the ability of physicians to locate information, improve treatment outcomes, or reduce errors in treatment. Evaluation of these initiatives, although quantifiable, is generally done in terms of service parameters that are known or believed to be important determinants of organizational success. These parameters might be measures of aspects of organizational processes that customers encounter and then use to judge the organization, for example, waiting times in the physician's office. A quantifiable dollar outcome for the service of care quality improvement can be very difficult to predict. Service quality is often necessary to protect current business, and the effect of a failure to continuously improve service or medical care can be difficult to project.

Major Strategic Initiative Strategic initiatives in information technology are intended to significantly change the competitive position of the organization or redefine the core nature of the enterprise. In health care it is unusual that information systems are the centerpiece of a redefinition of the organization, although as we discussed in Chapter Four IT is a critical foundation for provider efforts to manage population health. However, several other industries have attempted IT-centric transformations.

Amazon is an effort to transform retailing. Venmo (which enables micropayments between individuals) is an effort to disrupt aspects of the branch bank. There can be a ROI core or component to analyses of such initiatives, because they often involve major reshaping or reengineering of fundamental organizational processes. However, assessing the ROIs of these initiatives and their related information systems with a high degree of accuracy can be very difficult. Several factors contribute to this difficulty: These major strategic initiatives usually recast the organization's markets and its roles. The outcome of the recasting, although visionary, can be difficult to see with clarity and certainty. The recasting is evolutionary; the organization learns and alters itself as it progresses over what are often lengthy periods of time. It is difficult to be prescriptive about this evolutionary process. Most accountable care organizations are confronting this phenomenon. Market and competitor responses can be difficult to predict. IT value is diverse and complex. This diversity indicates the power of IT and the diversity of its use. Nonetheless, the complexity of the value proposition means that it is difficult to make choices between IT investments and also difficult to assess whether the investment ultimately chosen delivered the desired value or not.

The IT Project Proposal The IT project proposal is a cornerstone in examining value. Clearly, ensuring that all proposals are well crafted does not ensure value. To achieve value, alignment with organizational strategies must occur, factors for sustained IT excellence must be managed, budget processes for making choices between investments must exist, and projects must be well managed. However, the proposal (as will be discussed in Chapter Thirteen) does describe the intended outcome of the IT investment. The proposal requests money and an organizational commitment to devote management attention and staff effort to implementing an information system. The

proposal describes why this investment of time, effort, and money is worth it—that is, the proposal describes the value that will result. In this section we discuss the value portion of the proposal and some common problems encountered with it. Sources of Value Information As project proponents develop their case for an IT investment, they may be unsure of the full gamut of potential value or of the degree to which a desired value can be truly realized. The organization may not have had experience with the proposed application and may have insufficient analyst resources to perform its own assessment. It may not be able to answer such questions as, What types of gains have organizations seen as a result of implementing a population health sy

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.