CASE 15: ASSESSING THE VALUE OF HEALTH IT INVESTMENT

Five years ago, senior leadership at the Southeast Medical Center made the decision to embark on the implementation of a host of new clinical applica tions in the inpatient units enterprise-wide. The four hospitals that comprise Southeast Medical Center include the Main Adult Hospital, the Children's Hospital, McKinsey Hospital, and the Institute of Psychiatry. They contracted with McKesson to implement the following applications:

ED tracking system

Replacement pharmacy information system

Clinical documentation system (for all nurses and ancillary personnel; does not include physician notes)

Medication administration using bar-coding technology

Computerized provider order entry (CPOE)

In addition, several administrative applications were implemented, includ ing a new operative scheduling system and materials management system. They also upgraded their clinical data repository viewer (referred to as Oacis). All applications are now operational.

Most recently, the board of trustees has approved replacement of South east's ambulatory care EHR. A system known as EasyDoc (a McKesson product) has been in use for years. However, the system was viewed by cli nicians and IT staff members as antiquated and cumbersome to navigate. It is also very difficult to retrieve aggregate data from the system. Much of this is apparently because of its underlying database architecture and structure. EasyDoc also did not interface with the hospital clinical applications, and leaders were concerned that the system was not going to enable Southeast to achieve meaningful use criteria.

Clinicians have also been frustrated that Southeast has been using two different EHR systems, one for inpatient and another for outpatient, and the two don't interface or give a complete picture of the patient's health record. With payment reform and the need to be able to more effectively manage patient care quality and outcomes, senior leaders recommended, and the board approved, replacement of the EasyDoc EHR with Epic ambulatory care

CASE 15: ASSESSING THE VALUE OF HEALTH IT INVESTMENT 505

EHR. The patient registration and billing system used in ambulatory care will also be replaced with Epic's practice management application. Long-term plans are to eventually replace the McKesson clinical applications with Epic in the inpatient sector as well.

The total cost of ownership for the replacement ambulatory EHR and practice management system is approximately $30 million. Included in this estimate are not only the software and hardware upgrades but also the staff members needed to implement and support the new applications. Replacing the McKesson clinical products with Epic inpatient EHR will cost an addi tional $90 million. Again, this is an estimated total cost of ownership.

The primary purpose of the Epic EHR project is to provide clinicians with access to a single, complete EHR that spans the patient's continuum of care and improves collaboration and coordination of care. Community providers and patients will have access to the system. Community partners (such as primary care providers) will be able to retrieve important patient information. Currently a local HIE exists that provides ED visit information to all local hospitals. This is to be expanded to include continuity of care documents (CCDs) and other relevant health information. Patients will be given access to their health infor mation such as lab tests, X-ray results, and medications. They will also be able to schedule appointments and pay their bills online through a patient portal known as MyChart. Southeast physician leaders view patients as partners in their own care and are pleased to provide them access to information electronically.

Southeast providers treat a large population of patients with multiple chronic conditions. Managing chronic diseases using evidence-based, real- time support is considered essential. In addition, Southeast Medical Center has available a secure data warehouse of patient data that researchers and clinicians will be using more fully in the future to ensure that clinical research drives best care.

Discussion Questions

Assume you've been tasked with developing a plan to assess the value of Southeast's investment in the Epic outpatient and inpatient systems and expansion of its use of the data warehouse. The board is interested in knowing how these new and replacement systems have affected or will affect Southeast's ability to offer coordinated, collaborative care in a cost-effective manner. The facility fully intends to meet Meaningful Use criteria and report on quality outcomes. They realize that the traditional fee-for-service system in which providers are paid on volume will be a thing of the past.

1. How will you identify the costs of the investment in order to develop a financial business case?
2. How will you quantify the tangible and intangible benefits of the proposed investment?
3. Would a financial case rationale be sufficient? How will you develop a strategic business case for the same investment?