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Fit For EMR White Paper

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Return on Investment Model for Electronic Medical Records White Paper

Return on Investment Model for Electronic Medical Records White Paper

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  • 1. Analysis Series 2008 Measuring the Financial Impact of Electronic Medical Records Vertex Healthcare Consulting’s Financial Impact Tool for EMR’s
  • 2. Copyright 2008 Vertex Healthcare Consulting, LLC All rights reserved. No part of this paper may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system without written permission from Vertex Healthcare Consulting, LLC. For reprint requests, please contact: Vertex Healthcare Consulting, LLC, 2825 E. Cottonwood Parkway, Suite 500, Salt Lake City, UT 84121 Telephone: 801.207.8220, E-Mail: info@vertexhealthcare.com, or visit our website at www.vertexhealthcare.com
  • 3. Analysis Series 2008 Measuring the Financial Impact of Electronic Medical Records Vertex Healthcare Consulting’s Financial Impact Tool for EMR’s
  • 4. 1 FIT for EMR: A Model for Measuring the Financial Impact of an EMR Executive Summary Electronic Medical Record (EMR) systems are inevitable in the future of healthcare. Most healthcare professionals acknowledge that EMRs will play a significant role long-term, but because these systems are complex and capital intensive many managers and executives struggle to justify their implementation. From a clinical and operations perspective, many of the benefits of an EMR are extremely difficult to tie directly to financial measurements. It is unreasonable to expect the approval of the capital budget necessary to purchase an EMR on the assumption alone that some or all of these benefits may be realized. The question still remains, “Do the benefits outweigh the costs of implementing and maintaining an EMR system?” Vertex Healthcare Consulting responded to the challenge of measuring the financial impact of an EMR. We began with a review of relevant industry articles, studies, and financial models. We then combined the results of our research with our experience and expertise to produce a Financial Impact Tool for Electronic Medical Records (FIT for EMR). This tool calculates the “hard” benefits of an EMR; benefits that can be financially measured, quantified, and defined. The development of the FIT for EMR model was a four-step process. First, we defined relevant financial terms. Second, we developed the line-item detail to reflect the implementation and management costs of an EMR. Third, we developed the line-item detail for EMR benefits, backed by industry sources and clinical data. Finally, we applied financial modeling adjustments to appropriately represent costs and benefits over time. The result of our efforts was the FIT for EMR model. This model is a dynamic, Excel-based tool that calculates the financial impact of EMR system. An executive or manager can use it to demonstrate the financial impact of an EMR on his or her organization. The model produces a comprehensive financial impact summary report that includes four key financial metrics, a five-year financial pro forma and supporting documentation. Managers and executives in the healthcare community will always face the challenge of financially justifying the use of an EMR to improve the delivery of care. The FIT for EMR model is a tool that offers a solution that substantiates the benefits of an EMR through a process that is measurable, transparent, and defensible. With this tool, executives can have a high level of confidence when calculating the financials benefits of implementing an EMR. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 5. FIT for EMR: A Model for Measuring the Financial Impact of an EMR 2 The Challenge For the manager or executive that is championing the adoption of an Electronic Medical Record (EMR), the biggest obstacle that must be overcome is measuring the true financial impact of the EMR on the organization. There is little argument that an EMR, properly implemented, provides numerous benefits; including: improved patient safety, increased quality, patient and clinician satisfaction, costs savings, and revenue increases. The question remains, “Do the benefits outweigh the costs of implementing and maintaining the EMR system?” From a clinical and operations perspective, the benefits that appear to be the most persuasive reasons for adopting an EMR, quality, safety, and satisfaction, happen to be the benefits that are extremely difficult to tie directly to financial measurements. It is unreasonable to expect executives or boards to approve the capital budget necessary to purchase an EMR on the assumption alone that these “soft” benefits may be realized. A “soft benefit” by definition is difficult to measure in financial terms and is usually described as intangible or qualitative. Meeting the challenge of measuring the financial impact of an EMR necessitates using only “hard benefits”, in other words, benefits that can be quantified, defined, and associated with specific financial measures. These “hard” benefits include: cost savings for supplies, staff, and services; as well as revenue increases. Throughout the healthcare industry there have been many attempts to define and set forth these measurable financial benefits through cost studies, research, sampling, and industry statistics. As a result, there are numerous models that attempt to measure the financial impact of an EMR, in terms of returns, costs, benefits, and break-even. With all of the alternatives available, it is challenging for a manager or executive to determine what should be used to evaluate the financial impact of an EMR on his or her organization. Our Approach Vertex Healthcare Consulting has combined many industry resources with our experience to produce a comprehensive “Financial Impact Tool for Electronic Medical Records” (FIT for EMR). The development of the FIT for EMR model began with a review of relevant industry articles and previous studies. Next, it included the evaluation of several existing ROI models. We compiled the results of our research and testing and then augmented these with actual client data as well as clinical observations and cost study outcomes. With this body of knowledge we then applied a four-step methodology for the development of the FIT for EMR model. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 6. 3 FIT for EMR: A Model for Measuring the Financial Impact of an EMR Our research included articles from the American Journal of Medicine, the Healthcare Financial Management Association, the American College of Surgeons, and the American Academy of Family Physicians; we also reviewed national publications from the American Medical Association, the American College of Healthcare Executives, and HCPro, Inc. From these sources we compiled the specific components of our model and evaluated the different methodologies of calculating financial impact. Additionally, we tested and analyzed many “ROI” models available from EMR vendors, national associations and consulting groups. We evaluated the look and feel of each model, outlined its assumptions and calculations, and verified the data sources. The values from these models were also used to calibrate and reconcile those gathered from our industry research and client observations. There were several critical areas where specific costs and benefits were not sufficiently defined within the publications researched. In these instances, we turned to our own internal resources consisting of: actual client project results, compiled internal benchmarks, and the expertise of licensed clinical professionals. The four-step methodology for developing the FIT for EMR model began with a clear definition of relevant financial terms. The second and third steps consisted of developing specific and measurable details for both EMR “costs” and EMR “benefits”. Finally, financial modeling adjustments were applied to appropriately represent the financial costs and benefits over time. The result of our approach was the creation of a dynamic, Excel based, tool that calculates the financial impact of an EMR system. The FIT for EMR model was designed for an executive or manager to use to demonstrate the financial impact of an EMR on his or her organization. The following section describes the FIT for EMR development process. Developing the FIT for EMR Model Step 1 - Definition of Financial Terms: As a result of the research conducted, it became apparent that the term ROI, was used as a blanket term to indicate financial impact and project costs when discussing EMR systems. ROI stands for “Return on Investment”, and in strict financial terms means, a return on a past or current investment, or the estimated return on a future investment. ROI is usually represented as a percent rather than decimal value. However, the term “ROI” is often used in place of or synonymous with other financial metrics such as: break-even, net present value, internal rate of return, profit & loss or cost and benefit statements. When considering an EMR system, each of these metrics provides a slightly different view of the financial impact of the EMR on the healthcare organization. For this reason, the FIT for EMR model produces more than just an ROI percentage. The model actually calculates the following four financial metrics and produces a 5-year financial pro forma: Copyright 2008 Vertex Healthcare Consulting, LLC
  • 7. FIT for EMR: A Model for Measuring the Financial Impact of an EMR 4 Project Break-Even: Economically speaking, the break-even point is the point at which cumulative costs and benefits are equal. At this point the project has no net loss or gain, and is stated as, break-even. Relative to an EMR implementation, the “break-even” occurs after the system “Go-live” at the point when cumulative benefits equal all cumulative costs, including initial capital (start-up costs) and incurred ongoing operating costs. Project Net Present Value: NPV for a project is the present value of the project benefits minus (-) the present value of the project investment. Present value is the value today of future costs or benefits, discounted to reflect the time value of money. Present value calculations are widely used in financial modeling to compare cash flows at different times on a meaningful like to like basis. Project 5-Year Return on Investment: ROI is the ratio of the benefit gained on a project relative to the cost of the investment. ROI indicates cash flow from an investment over a specific period of time, in this case 5 years. It measures investment profitability, not investment size. Return on Investment is a percentage return based on capital invested. In general, the higher the investment risk, the greater the potential investment return, and the greater the potential investment loss. Project Internal Rate of Return: The internal rate of return (IRR) is a capital budgeting metric used to decide whether an investment should be made. It is an indicator of the efficiency of an investment. The IRR is the annualized effective compounded return rate which can be earned on the invested capital. A project is a good investment if its IRR is greater than the rate of return that could be earned by alternate investments. Project Pro Forma Financials: A pro forma document is provided in advance of an actual project. This document serves as a model for the anticipated financial outcomes of the actual project. The pro forma financials provide the basis from which the other financial metrics are calculated, by projecting in detail the line item costs and benefits of the project over time. Step 2 – Development of Cost Detail: The development of the cost detail was the first of two foundational sections in the FIT for EMR model. In simplest terms, the model measures the difference between EMR costs and EMR benefits. The model is structured on detailed line items that represent comprehensive costs associated with purchasing, implementing, and maintaining an EMR system. The model utilizes annual organizational costs. Annual costs are used rather than per patient or per provider calculations to ensure usability for a variety of organizations. Developing the cost detail required categorizing costs, defining the “go-live” timeframe, identifying “other” cost factors, and specifying all cost line items. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 8. 5 FIT for EMR: A Model for Measuring the Financial Impact of an EMR Categorizing Costs: The FIT for EMR model assigns costs to two major groups. The first group is “Capital Costs”. The model places all costs incurred by an organization associated with the procurement and implementation of an EMR system into this category. Another way of describing these costs would be to call them “Start-up Costs”. An organization may or may not choose to treat all of these costs as “capital”; however, for the purpose of the model they are identified as such. The second group is “Ongoing Operating Costs”. These costs consist of all items and services required to operate and maintain an EMR on an ongoing basis. The model only includes costs in this category that occur after the “Go-live” of the EMR system. Project “Go-live”: The term “Go-live” is almost exclusively associated with a software implementation. Simply put, it is the day on which the system is put into productive use. The “Go-live” date in the FIT for EMR model is used to clearly define the difference between Capital and Ongoing Costs. The “Go-live” date is also used as the starting point for the break-even calculation. The “Pre Go- live” periods for organizations can be substantially different. Some EMR systems may be implemented in as little as 90 days, while others may require several years. For this reason, the FIT for EMR model calculates break-even from the “Go-live” date forward. “Other” Cost factors: There are miscellaneous costs associated with an EMR. The FIT for EMR model includes an estimate for hardware replacement costs and accommodates other miscellaneous costs by providing the user with an “other” category for additional, organization specific, Capital and Ongoing Costs. To reflect the economic realities that organizations face, the model allows for annual cost adjustments for contracted software maintenance and support. Additionally, annual adjustments for staffing and other operating cost increases can be included to account for inflation. Cost Line Item Detail: As described above, the line item costs are grouped into two categories, Capital and Ongoing Operating Costs. The FIT for EMR model intends that the line item costs included must be directly attributed to the purchase, implementation, and management of the EMR system. These costs will generally be found in the Vendor Bid/Estimate or the EMR System Contract documents. Some of these costs will need to be estimates for use of internal resources and for other acquired professional or consulting services. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 9. FIT for EMR: A Model for Measuring the Financial Impact of an EMR 6 Capital (Initial) Costs • Software Licenses: This includes initial licensing fees for the EMR system as well as any additional 3rd Party software (such as servers, scanning, security, fax & e-mail) required to support the installation. • Hardware & IT Installation: This line item consists of all equipment required for the EMR. It will include PC’s, laptops, scanners, printers, back-up storage, networking devices, etc. Also, this cost item includes all labor and support services required for configuring and installing the necessary hardware and software. • Hardware Replacement Cycle: Within the model, the user can specify the number of years before replacement is necessary and the estimated percentage of the replacement cost. Generally, a replacement cycle of 3 years and 50% cost of the original installation are used. • Training & Travel Related Expenses: These costs are usually stipulated in the EMR Vendor contract and will include training time as well as travel expenses associated with trainers coming on-site. This is one area where costs included in Capital may actually occur after “Go-live”, should the contract include hours for post “Go-live” support during the first several weeks of operation. • Project Management & Onsite Support: An effective EMR implementation almost always requires dedicated project management resources. This line item should include costs associated with project management whether contracted to an outside firm or provided by in-house resources. Also, this item should include other onsite support services, not included in the training item above. • Data Migration: If moving from a paper-based medical record to and EMR, this cost item will include scanning and data entry costs for historical records being loaded into the new system. If an organization is moving from one computer-based system to another, customize “migration” programming is almost always required. All costs for the migration process should be included in this line item. • Additional Customized Programming: If an organization is simply installing the EMR System “off the shelf”, then no customized programming costs should be included. However, more often than not, some customization will be required. If the Vendor contract specifies the costs for these services separately, they will be included in this cost line item. • Other Capital Costs: Item is for miscellaneous, organization-specific capital costs. Ongoing Operating Costs (Annual) • Software Maintenance & Support: Costs making up this line item include annual software maintenance and support fees incurred post “Go-live”. These costs may be stipulated in the EMR Contract with an annual percentage increase. The model allows for the inclusion of this annual adjustment. • EMR Support Staff (Salary & Benefits): An EMR system requires ongoing management and database administration services. These are usually provided by in-house personnel. This line item accounts for their salary and benefits as a component cost of maintaining the EMR. • Other Operating Costs: Item is for miscellaneous, organization-specific ongoing operating costs. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 10. 7 FIT for EMR: A Model for Measuring the Financial Impact of an EMR Step 3 – Development of Benefit Detail: The development of the benefit detail was the most involved of the two foundational sections in the FIT for EMR model. The challenge of measuring the financial impact of an EMR necessitates using only “hard benefits”, in other words, benefits that can be quantified, defined, and associated with specific financial measures. In order to identify these “hard” benefits we combined our research, client data, clinical observations, and cost studies to create a defensible list of measurable financial EMR benefits. These benefits include: cost savings for supplies, staff, and services; as well as revenue increases associated with the proper implementation and utilization of an EMR. Categorizing Benefits: The FIT for EMR model assigns benefits to two major groups. The first group is “Cost Savings”. The model places all benefits associated with the EMR system that result in reduced costs to the organization in this category. The second benefits group is “Revenue Increases”. In a clinical setting, it is proven that an EMR improves both charge capture and coding accuracy. Each of these generates additional revenues for the organization. In a correctional setting, an EMR provides a means for tracking inmate utilization of healthcare services in a more timely and accurate manner. In institutions where inmate co-pays are charged, an EMR greatly increases the likelihood of collecting these payments. Benefits Line Item Detail: As described above, the line item benefits are grouped into two categories Cost Savings and Revenue Increases. Line items described below will include the following: a narrative description; a Value Range that provides conservative, moderate and aggressive values; an explanation of calculation used to determine benefit amount; and a reference for the source of the benefit data. Cost Saving: Benefits include supply, staff, and services savings. • New Chart Supplies: Includes medical record folder, dividers, labels, forms and supply shelving. Value Range: $2.00, $3.00, $4.41 per New Patient Encounter. Original cost of $3.00 in 1997 adjusted annually for medical inflation through 2007 at an average rate of 3.95% per year. Calculation: Value x New Patient Encounters = Chart Supply Savings Data Source: Healthcare Financial Management, Sept. 1997, “Computerized Patient Records Benefit Physician Offices” by A. Bingham. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 11. FIT for EMR: A Model for Measuring the Financial Impact of an EMR 8 • New Chart Build: Staff minutes required to gather patient data and assemble new patient chart. Value Range: 3 minutes, 5 minutes, 7 minutes per New Patient Encounter Calculation: Value x New Encounters x Staff Cost per minute = Staff Savings Data Source: Vertex Healthcare Consulting 2005-2007 client data gathered from clinical workload staffing studies. • Existing Chart Management: Minutes required by medical records staff to manage existing patient records, excluding initial chart pull and re-filing. This line item accounts for loose paper filing and general record storage management activities. Value Range: 1 minutes, 2 minutes, 3 minutes per Existing Patient Encounter Calculation: Value x Existing Encounters x Staff Cost per minute = Staff Savings Data Source: Vertex Healthcare Consulting 2005-2007 client data gathered from clinical workload staffing studies. • Chart Pulls: Average cost for medical records staff to retrieve and re-file a paper chart. Value Range: 50%, 75%, 100% of $5.88 per Clinical Encounter Original cost of $5.00 in 2003 adjusted annually for medical inflation through 2007 at an average rate of 3.91% per year. Calculation: Percent Value x $5.88 x Total Clinical Encounters = Staff Savings Data Source: The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. • Medical Records Requests: Includes all time and material costs associated with the creation of a duplicate chart in response to a medical records request from an outside party (e.g. patient, other provider, attorney, etc.). Value Range: 7 minutes, 12 minutes, 17 minutes per Medical Record Request Includes Medical Records Request Minutes + New Chart Build Minutes + Existing Chart Management Minutes Calculation: Value x Total Record Requests x Staff Cost per minute = Staff Savings Data Source: Vertex Healthcare Consulting 2005-2007 client data gathered from clinical workload staffing studies. • Transcription: Estimated percentage savings of annual transcription costs based on organization’s process and utilization of medical transcription. Value Range: 50%, 75%, 100% reduction of annual transcription cost Calculation: Percent Value x Annual Transcription Cost = Transcription Savings Data Source: The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 12. 9 FIT for EMR: A Model for Measuring the Financial Impact of an EMR • Reusable Records Space: Cost per square foot of records storage space reclaimed for other clinical or administrative uses. Value Range: $1.25, $2.10, $3.00 per square foot per month. Calculation: Value x Sq. Ft. of Reclaimed Space x 12 months = Annual Savings Data Source: Estimated from national leasing data, will vary by geographic location. • Prevention of Adverse Drug Events: Estimated percentage savings due to the reduction in adverse drug events. Value Range: 10%, 40%, 70% of $2.94 per Provider-Only Encounter. Annual savings of $6,500 per provider divided by 2,500 provider-only encounters = $2.60 savings per encounter. Original savings of $2.60 in 2003 adjusted annually for medical inflation through 2007 at an average rate of 3.91% per year. Calculation: Percent Value x $2.94 x Provider-Only Encounters = Prevention Savings Data Source: The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. • Medication Utilization & Compliance: Estimated percentage savings of annual medication costs due to alternative drug suggestion reminders and improved formulary compliance. Value Range: 5%, 15%, 25% of Annual Medication Costs. Calculation: Percent Value x Annual Medication Costs = Medication Savings Data Source: Healthcare Financial Management, Jan. 2002, “Financial Analysis Projects Clear Returns from EMR”, Schmitt and Wofford. The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. • Laboratory Order Entry Savings: Estimated percentage reduction of annual laboratory costs due to improved decision support processes. Value Range: 0%, 6.5%, 13% of Annual Laboratory Costs. Calculation: Percent Value x Annual Laboratory Costs = Laboratory Savings Data Source: The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. • Radiology Order Entry Savings: Estimated percentage reduction of annual radiology costs due to improved decision support processes. Value Range: 5%, 12%, 20% of Annual Radiology Costs. Calculation: Percent Value x Annual Radiology Costs = Radiology Savings Copyright 2008 Vertex Healthcare Consulting, LLC
  • 13. FIT for EMR: A Model for Measuring the Financial Impact of an EMR 10 Data Source: The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. • Outside Services Savings: Estimated percentage reduction of annual outside services costs due to decreased utilization of emergency services; consistent scheduling of chronic care visits, and leveraging of telemedicine services. Value Range: 0%, 5%, 10% of Outside Services Costs. Calculation: Percent Value x Annual Outside Service Costs = Annual Savings Data Source: Vertex Healthcare Consulting 2005-2007 client data gathered from correctional healthcare services assessments and financial turnaround engagements. Revenue Increases: • Charge Capture Improvements: Estimated percentage of increased collections due to computerizing the encounter form process, capturing procedures performed not previously documented, and improving billing capture. Value Range: 1.5%, 3.3%, 5.0% of Annual Collections. Calculation: Percent Value x Annual Collections = Increased Collections Revenue Data Source: The American Journal of Medicine, April 1, 2003 A Cost-Benefit Analysis of Electronic Medical Records in Primary Care, Wang, A., Middleton, B., et al. Healthcare Financial Management, Jan. 2002, “Financial Analysis Projects Clear Returns from EMR”, Schmitt and Wofford. The American College of Surgeons, Jul. 2007, “A Pilot Study to Document the Return on Investment for Implementing an Ambulatory Electronic Health Record at an Academic Medical Center”, Grieger, Cohen, and Krusch. Family Practice Management, Nov. 2004, “Why It’s Time to Purchase an Electronic Health Record System”, Adler. • Coding Improvements: Estimated percentage of increased collections from better coding accuracy due to automated prompts and required data fields; as well as improved administrative and workflow functions. Value Range: 3%, 9%, 15% of Annual Collections. Calculation: Percent Value x Annual Collections = Increased Collections Revenue Data Source: The Journal of Healthcare Information Management. Vol 17 No. 4 Fall 2003, “Analyzing Computer Based Patient Records: A Review of Literature”, Erstad. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 14. 11 FIT for EMR: A Model for Measuring the Financial Impact of an EMR • Increased Inmate Co-pays: Estimated percentage increase in annual revenues from inmate co- pay collections. In many correctional environments, institutional guidelines allow for the collection of co-pays for inmate requested healthcare and prescriptions. An EMR facilitates collection of these fees by automatically tracking utilization of services by type and request. Value Range: 0%, 25%, 50% of $5.00 per Provider-Only Encounter. Survey of correctional institutions inmate co-pays ranged from $2.00 to $10.00 per encounter. Calculation: Percent Value x $5.00 x Provider-Only Encounters = Increased Revenue Data Source: Oklahoma Dept of Corrections Executive Budget 2004 Salt Lake County Jail Regulators Handbook Sept. 2003 Milwaukee Journal Sentinal June 6, 2004, Prisoners Health Costs Rise 500%, Marley Step 4 – Financial Modeling Adjustments: The final step in the FIT for EMR model development process was to establish an appropriate financial modeling framework. The intent of the model is to forecast EMR performance with its associated costs and benefits. Financial adjustments were applied to accurately represent cost and benefit estimates over time and to reflect the cost of capital in today’s dollars. Annual adjustments were applied to EMR “costs” to reflect the anticipated impact of inflation. These adjustments were applied to Ongoing Operating Costs. The model allows the user to input up to three different adjustment values to account for contracted rate increases, medical inflation costs, and other annual adjustments. To maintain consistency throughout the model, an annual adjustment is also applied to all EMR “benefits”. The model allows the user to input a single benefit adjustment that is applied to all benefit line items over a 5-year period. This benefit adjustment should mirror the adjustments applied to costs; however the user can modify these adjustments to suit their specific circumstances. The final adjustment in the model is the application of a discount rate. The discount rate is the rate used to discount future cash flows to their present values. The discount rate generally equates to the organization’s cost of capital (cost of borrowing money). The FIT for EMR model applies a discount rate to both the EMR costs and benefits in order to calculate their Present Values. The default discount rate in the model is 7.5%; however, this should be adjusted by the user to reflect their organization’s cost of capital. Copyright 2008 Vertex Healthcare Consulting, LLC
  • 15. FIT for EMR: A Model for Measuring the Financial Impact of an EMR 12 The Solution The FIT for EMR Model: Vertex Healthcare Consulting combined many industry resources with our own client experience, actual clinical studies, and EMR implementation expertise to produce the FIT for EMR model. This model is a dynamic, Excel-based tool that calculates the financial impact of EMR system. The FIT for EMR model was designed for an executive or manager to use to demonstrate the financial impact of an EMR on his or her organization. The tool allows the user to input cost and benefit values specific to their organization and EMR system. It then produces a comprehensive financial impact summary report that includes four key financial metrics, a five-year financial pro forma and supporting documentation for sources and calculations. Managers and executives in the healthcare community will always face the challenge of financially justifying the use of technology to improve the delivery of care. The FIT for EMR model is a tool that offers a solution that substantiates the benefits of technology through a process that is measurable, transparent, and defensible. Copyright 2008 Vertex Healthcare Consulting, LLC