Implementing electronic medical records in primary care can provide financial benefits according to a cost-benefit analysis. The analysis estimated a net benefit of $86,400 per provider over 5 years from savings in areas like drug costs, radiology tests, billing charges, and errors. However, the results were sensitive to factors like the proportion of patients under capitated care, with the net benefit ranging from $8,400 to $140,100 under different assumptions. Even under pessimistic assumptions, the analysis found electronic records could result in a small net benefit rather than a net cost compared to traditional paper records.

1. PRESENTED BY:-
SARTHAK GUPTA
AVI KAPOOR
MAYANK NARANG
HARSH
CHAUDHARY

2. INTRODUCTION
 A cost benefit analysis(CBA) is an economic evaluation
technique that measures all the positive (beneficial) and
negative (costly) consequences of an program in monetary
terms. The model is built by identifying the benefits of an
action as well as the associated costs, and subtracting the
costs from benefits
 Cost is value of money that has been used up to produce
something .
 Benefit are monetary values of desirable consequences of
economic policies and decisions.

3. Benefits > cost  Acquire the
information
Benefits < cost  Not advised to
Acquire the
information
Benefits = cost  Depends on
decision of the organization

4. COST
BENEIT
ANALYSIS
QUANTITATIVE ASPECTS
QUALITATIVE ASPECTS

5. QUANTITATIVE ASPECTS
Quantitative aspects is related to cost of the information.
Various cost related in acquiring information are:
 Hardware Cost: This is normally a fixed or one time cost
over a relevant range.
 Operational Cost: This is basically a variable cost and
includes cost of personnel, system maintenance, supplies
and support facilities.
 System Analysis, Design and implementation cost:
This is also one time cost. This should include cost for
preparation of programs and purchase of software.
 Cost of space and Environmental Control Factors: this
cost may vary time to time. Examples: floor space, air-
conditioning, generator , security.

6. QUALITATIVE ASPECTS
Value of information is a very slippery concept as
information does not have any universal value.
Any assessment of the value of information is
therefore related to value of the decision-
making supported by such information.
Value of information may be defined as
difference b/w value of change in decision
pattern caused by information and cost of
information. A decision maker makes decision
on basis of information available to him.

7. CATEGORIES OF COST AND
BENEFITS
 Directcostandbenefits:areoftenassociatedwithanoperation.
Eg- Cost:costofrunningcomputersystem
Benefit:increasedoperationalabilityandefficiency
 Indirectcostandbenefits:arenotassociatedwithanoperation.
Eg- Cost:insuranceormaintenancecost
Benefit:timeliercustomerservice
 Tangiblecostandbenefits:areeasytomeasure.
Eg- Ex-Cost:costofacquiringhardware
Benefit:timetakentopreparereport
 Intangiblecostandbenefits:aredifficulttoidentifyandmeasure.
Eg-Ex-cost:costincurredtofixsystembreakdowninbank
Benefit:customersatisfaction

8. STEPS OF COST-BENEFIT
ANALYSIS

9. STEP1: BRAINSTORM COSTS AND
BENEFITS
First , take time to brainstorm the costs
associated to the project, and make a list of
these.
Then, do the same for all of the benefits of the
project.
When u come with the cost and benefits , think
about the lifetime of the project.

10. STEP2: ASSIGN A MONETARY VALUE TO
COSTS
Cost include: the costs of physical
resources (raw materials) as well as the
cost of the human effort involved in all
phases of project. Costs are often
relatively easy to estimate.
For example: what will any training cost?
People are learning a new system or
technology and how much will this cost ?

11. STEP3: ASSIGN A MONETARY VALUE
TO BENEFITS
It is often very difficult to predict revenues
accurately, especially for new
product/services. There are often intangible or
soft ,benefits that are important outcomes of
the project.
For instance, what is the impact on
environment, employee satisfaction or health
and safety?
What is monetary value of that impact?

12. STEP4: COMPARE COSTS
AND BENEFITS
Finally, compare values of your costs to
value of your benefits and use this
analysis to decide your course of action.
To do this, calculate your total costs and
your total benefits and compare 2 values
to determine whether your benefits
outweigh your cost.

14. Case Study
 A cost-benefit analysis of electronic medical records in
primary care
 Purpose: Electronic medical record systems improve
the quality of patient care and decrease medical errors,
but their financial effects have not been as well
documented. The purpose of this study was to
estimate the net financial benefit or cost of
implementing electronic medical record systems in
primary care.

15.  Methods: We performed a cost-benefit study to analyze
the financial effects of electronic medical record systems
in ambulatory primary care settings from the perspective
of the health care organization. Data were obtained from
studies at our institution and from the published
literature. The reference strategy for comparisons was
the traditional paper-based medical record. The primary
outcome measure was the net financial benefit or cost
per primary care physician for a 5-year period.

16.  Results: The estimated net benefit from using an
electronic medical record for a 5-year period was
$86,400 per provider. Benefits accrue primarily from
savings in drug expenditures, improved utilization of
radiology tests, better capture of charges, and
decreased billing errors. In one-way sensitivity
analyses, the model was most sensitive to the
proportion of patients whose care was capitated; the
net benefit varied from a low of $8400 to a high of
$140,100. A five-way sensitivity analysis with the most
pessimistic and optimistic assumptions showed results
ranging from a $2300 net cost to a $330,900 net
benefit.

17.  Conclusion: Implementation of an electronic medical
record system in primary care can result in a positive
financial return on investment to the health care
organization. The magnitude of the return is sensitive
to several key factors.