Overview of ROI and its historical roots. How was ROI first utilized with the Dupont Company.

Saint Joseph's University Financial Management of Health Care Organizations Research Paper Outline ___________________________________________________________________________________ Activity: - Understanding Return on Investment Background: - The final paper/project challenges participants in the course to design a financial strategy for presentation to the Harris Memorial Hospital and Harris Community Foundation Board of Trustees (see appendix 9A in our text for background information) by you, a health services manager, with the Certified Public Accounting Firm, Pennypacker & Vandelay, LLC. The engagement will be to create a series of educational presentations (Phase 1 thru 6) to the Board of Trustees on the topic of Return on Investment, addressing \"soft\" and \"hard\" components of Return-on-Investment (ROI). The project is to be worked on in phases throughout the semester: (1) identify the components; (2) evaluate implications of soft returns; (3) justification for the expenditure; (4) analyze the potential outcome; (5) develop outline for final paper, and (6) presentation of comprehensive paper. All phase presentations to the board should be prefaced by a brief introduction and a summary of the current engagement status. The topic for the research paper will be Electronic Health Records. The paper is set at 2,000 words, APA format (approximately 8 pages of content). Your outline for the paper/project will be due in Module 5 of our course. I'll grade that outline, and provide you with guidance on your final paper/project in my feedback. The completed term paper, to include a cover page, abstract, and citations is due in the last week of the course (Module 8) and is intended to take a broad look at return on investment (ROI) analysis used in healthcare organizations. Phase 1 Assignment: This week's assignment starts a four paper project (short paper - 500 to 1,000 words approximately 3 to 4 pages of content pages including 3 research references). The first week's short paper assignment should focus on an overview of the Return on Investment topic and a review of its historical roots and how first utilized with the DuPont Company. Return on Investment (ROI) is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. For our purposes, the formula is as follows: The \"return\" is the potential benefit that can be derived through an investment. The \"expense/cost\" is the risk taken to pursue said investment e.g. cash outlay. The ROI result can be expressed as a percentage or as a ratio and can therefore provide a snapshot of profitability. In other words, a positive ROI would indicate that an investment would be viable and the inverse is true by a negative ROI. Furthermore, the higher the percentage, the greater return potential on the initial investment. While the ROI is most commonly discussed in the context of business, the return on investment strategy can be applied outside of terms related to financial reward. Any entity attempting to evaluate the impact a particular course of action may have on its stakeholders can greatly benefit from exposure to this performance metric. In addition, consider both \"Hard\" and \"Soft\" analysis identifying how they would be utilized by type of project. Phase 2 Assignment: The assignment this week will be the second short paper on Return on investment with a focus on the steps recommended for building the documentation for the justification of a \"soft return\" (Soft costs include risk avoidance, client goodwill, patient safety, process improvement, regulatory compliance and support costs) and the gathering of metrics with the intention of estimating the financial benefits expected from the project. There are three steps in documenting soft returns, which are identifying a process improvement opportunity, create a formula to calculate the benefits, and determine the costs of the process and the net benefits. Many projects in healthcare today require large outlays of capital for electronic health records, clinical information systems whose return on investment is not easily documented with new revenues and operating expenses but from a quality standpoint are wanted and needed. In your research, consider what would be needed to support a capital acquisition of Electronic Health Records that would improve efficiency, quality, customer satisfaction, and overall effectiveness within the organization. In your writing show an example of the three steps in documenting a soft return. Also, would a project management office establishment be of any assistance in monitoring the project? Phase 3 Assignment: This week's assignment is the third component of our Return on Investment (ROI) project. The focus of this week's short paper writing will be to consider the justification of the capital expenditure. Three key aspects should be considered in your writing: (1) Amount and type of expenditure (2) Attainment of key decision criteria (3) Detailed financial analysis. Using pro-forma data used in our Collaborate Class as a financial basis (A Cost Benefit Analysis- Bardon, C. G., Wang, S. J., Middleton, B., Prosser, L. A., Spurr, C. D., Carchidi, P. J., et al. (2003). The American Journal of Medicine , 114.) prepare a net present value analysis using a 6% hurdle rate, profitability index (see chapters 18 and 19 in our text for details), for you capital project. Do not consider capital cost reimbursement from third-party payers in your calculation. Finally, consider in your writing how you would factor risk (technology change, Physician acceptance, competition from other HCO's, accuracy of market data and volume projections) associated with the capital project in your discount rate calculation. Phase 4 Assignment: This week's assignment is the fourth short paper component of our Return on Investment (ROI) project. The focus of this week's writing will be to consider the value and steps necessary in preparing a \"look back analysis\" or a post implementation audit on the particular project that a ROI for both \"hard and soft\" information that has been prepared. (The purpose of the review is to determine if the information initially submitted was correct. You will need to use your imagination and select an outcome...was the project result equal to the outcome reported in Phase 3; were benefits or costs overstated and what actions were needed to put the project back on line, or should the project be abandoned because of unforeseen risks and the potential negative financial outcomes of project continuation and the predicted outcomes occurred and what specific lessons can be learned to improve the analysis). Please see the attached two reference sources for examples of this process. Eight steps for a successful post-implementation audit. (2003, October 01). CIO, http://www.cio.com/article/29818/Eight_Steps_for_a_Successful_Post_Implementation_Audit Levinson, M. (2003, October 01). How to conduct post-implementation audits. CIO, http://www.cio.com/article/29817/How_to_Conduct_Post_Implementation_Audits Phase 5 Assignment: This week's assignment is the completion of the outline for the final paper on Return on Investment that will be submitted in week seven. Consider in your opening paragraph the results of a meeting with your firms health care partners on how best to construct an outline of the work completed thus far on the ROI project that will be used to present to the Board of Managers of Managers of Harris Memorial. The information to be included are the merging of the four earlier assignments on ROI which include the topics of the introductory overview of ROI, justification for a soft ROI, justification of capital expenditure, and a look back analysis for a completed ROI. The outline should include an abstract; bullet summaries of the body paragraphs; the conclusion (one page will work), and references for all phases presented in APA format. (Check with the Drexel Library website for help using APA format) ( http://thehowtohandbook.com/how-to-make-outline-apa-outline-format/ ) Phase 6 Assignment: This week's submission of final paper is a final report to the Board of Directors at Harris Memorial linking together the earlier components of the ROI Project into a comprehensive presentation