Part of any health administrator's job is to make decisions about when to upgrade existing systems, and whether to switch to a new vendor's system that has deeper functionality. But before making such decisions, leaders must have a firm grasp of the pros and cons of each choice. Without a solid cost-benefit analysis, leaders risk expending too many resources and too much money for a system that does not offer improvements that justify the expense. In this activity, you will practice analyzing the costs and the benefits, both short-term and long-term, of implementing an existing system at Valley City Regional Hospital, one of the rural hospitals recently acquired by Vila Health

Learning Objectives

• Determine costs of implementing an updated HIM system.
• Identify and analyze benefits of implementing an updated HIM system.
• Identify and analyze costs and benefits of not implementing an updated HIM system.

Jerry Edwards, Director of Business Services

If we're looking at cost-benefit analysis for implementing a new EHR, one issue I'd like to see considered would be how it might help us address the issues around the re-admission reduction program that was put in place with the Affordable Care Act. The short story is that we need to keep re-admissions particularly related to the conditions CMS is looking at - acute myocardial infarction, heart failure, and pneumonia as low as possible. Our all-cause hospital re-admission rate for 2014 was 21.9%. The benchmark used by CMS is the national 80th percentile. At or below that mark is what we're aiming for, but that was 19.4% for 2014, so you can see we have work to do. We got hit with a .34% readmission penalty for 2015, which isn't a lot, I know, but it's money we don't need to be losing.

Cost-Benefit Analysis	Enter year	CY +1	CY +2	CY +3	CY +4	CY +5	Cost-benefit Analysis
Cost							Total PV benefits: $
							Total PV costs: $
							Net Benefit: $
Total Costs (Future Value)
Total Cost (Present Value)
Benefits
Total Benefits (Future Value)
Total Benefits (Present value)