Return on Investment: Post-implementation Audit Phase 4 Paper

Phase 4 Assignment:

This week’s assignment is the fourth short paper component of our 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 (usually prepared 8 to 12 months after the project is up and running). The purpose of the review is to determine if the information initially submitted was correct and the predicted outcomes occurred and what specific lessons can be learned to improve the analysis. To complete this review you will need to create a scenario of an outcome and apply the information outlined in the assignment. Please see the attached two reference sources for examples of this process.

Eight steps for a successful post-implementation audit. (2003, October 01). CIO,

https://www.cio.com/article/2441926/eight-steps-for-a-successful-post-implementation-audit.html

Levinson, M. (2003, October 01). How to conduct post-implementation audits. CIO,

https://www.cio.com/article/2441675/how-to-conduct-post-implementation-audits.html

Please read my Phase 1, 2 and 3.

My work – Understanding Return on Investment (ROI) – Phase 1

Hello, ladies and gentlemen. My name is (………….). I work as a Health Administration Services Manager with the well-known accounting firm, Pennypacker and Vandelay, Welcome to the first phase of my six presentations. The topic I will be presenting on is Return on Investment (ROI). This will involve an overview and how it impacts Electronic Health Records at Harris Memorial Hospital and the Harris Community Foundation. Shall we get started?

Overview

ROI is a metric that organizations use to measure their financial gain, return or loss form an investment. ROI applies by comparing the amount of money the company invests and the amount of money it gains/saves from the program. Value added Investment and Return on invest are now clearly applied by many companies. ROI is measured by monetary metrics while you VOI is measurement of a multitude of metrics.

History

The DuPont innovation of ROI calculations acts as one of the most significant turning points in modern accounting and management. DuPont integrated financial accounting, capital accounting, and cost accounting as early as the 1920’s. For instance, DuPont measured its assets at their gross book value as opposed to net book value which became the identity of DuPont. The basic ROI formula is: Net Profit / Total Investment * 100 = ROI. What makes DuPont ROI calculations effective is that it focuses on net return rather than net profits. This applies in instances where one wants to measure how the division manager uses the property of the company to generate profits.

The Role of ROI on Electronic Health Records (EHR)

As we all know Electronic Health Records (EHR) use both ROI and VOI metrics. Return on investment and value on investment involves measurement of outcomes. Measurement of investment is an important metric in measuring of VOI and ROI. The benefit of EHR programs is usually measurable in a tangible way. Return on investment is a metric which is used in measurement of financial gain in EHR programs. The metric checks return or loss from investment.

There is a comparison on the amount of money that is invested in a program and the amount of money gained. VOI on the other hand is a measure of gains in a different way than ROI. Value on investments addresses tangible and intangible benefits that come from wellness programs. The specific issues analyzed by the metric include the health impact on the overall health of employees and the level of job satisfaction among employees

ROI and VOI have both advantages and disadvantages depending on the application. The main advantage of using value on investment is that it analyzes both tangible and intangible gains unlike ROI which just focuses on returns on investment. ROI is on the other hand more specific than value on investment metrics. Another advantage of VOI is that it takes a shorter period of time.

Hard analysis

Hard analysis involves measurements that are easy to quantify and have a great possibility of leading to success. In the case of Harris Memorial Hospital and the Harris Community Foundation., a training analysis will lead to identification of gaps that need to be addressed. The training strategy in this case involves provision of job aids, coaching of employees, and leadership training to ensure that there is effective succession planning.

Soft analysis

Soft analysis in the other hand incorporates measurements that are not easy to quantify with immediate financial goals. There are potential challenges that the managers and owners of the business in this case could face while addressing organizational performance. The challenges in this case include communication problems, inadequate tools, lack of funds and even issues such as organizational conflict. Detecting organizational gaps in small businesses is important in making them focus on capitalizing on strengths and addressing weaknesses. The potential return on investment (ROI) that will be gained from the strategy developed in this case is an essential justification.

Conclusion

Despite ROI being used widely, I feel that the ROI system has certain limitations in it. One is that it causes incongruities between divisional objectives and company goals, which result in motivating division managers to take uneconomic actions. Despite this ROI system is versatile enough to be used to evaluate the efficiency.

Does anyone have a question?

Thank you for participating in my Phase 1 presentation and I will see you again in my Phase 2 presentation.

Reference

Miller, S. (2015). Metrics beyond ROI can capture wellness outcomes. Retrieved from https://www.shrm.org/hrdisciplines/benefits/Articl…

Schaefer, J. (2016, June 9). The Real ROI for Employee Wellness Programs. Retrieved from Corporate Wellness Magazine.com: http://www.corporatewellnessmagazine.com/column/th…

Swanson, R. (2009).Analysis for Improving Performance: Tools for Diagnosing Organizations and Documenting Workplace Expertise . New York: ReadHowYouWant

My work – Understanding Return on Investment (ROI) – Phase 2

Hello everyone here today! Good morning to all stakeholders of the Happy Hospital. I am happy for sacrificing your time to be part of this presentation. My name is (……………), the accounting firm Health Service Manager at Pennypacker and Vandelay. LLC. On today’s presentation, I am going to present the Phase two discussion. However, before I give an outline of Phase 2, allow me to give a brief summary of my Phase 1 presentation which was about Return on Investment and its significance to Electronic Health Records. Any organization should have a plan that will evaluate its profits or gains because that is the primary objective of any business enterprise (Phillips, 2012). However, profit alone does not measure the firmness of an organization but rather its progress. A business which lacks a plan to evaluate its profit runs a risk of becoming bankrupt. In reference to this context, the Return on Investment is significant to an organization because it helps in establishing the profit acquired from the investment. I also described the two types of ROI analysis which are soft and Hard returns. These analysis works in collaboration although their impact profit/cash flow gains in the organization are different.

Having demonstrated an overview of the phase presentation summary, I would now wish to continue with the Phase 2 presentation. Is there anyone with any question about Phase 1 that need to be addressed before I turn to Phase 2?

Phase II on ROI emphasizes majorly on the recommended stages that would guide to create documentation for the rationalization of a soft return (examples of soft cost are risk avoidance, client goodwill, patient safety, process improvement, and regulatory compliance and support costs) and metric collection whose major objective is to estimate the financial benefits which would be accrued from the organization.

HER systems are significant to hospitals and healthcare organizations. It helps in the relaying information and provision of valuable data to the stakeholders and other hospital workers (Baxter, et al, 2014). It also facilitates better decision-making processes because it provides evidence-based data that guides in decision making. EHR is also significant in evaluating the soft return through documentation gathering with the help of a metric. In addition to this, strengthening the ROI is the most significant factor and it can be established through training and implementation to prevent any financial losses. Soft costs items tend to be transformative and are critical to the mission and vision of healthcare facilities like risk avoidance, client goodwill, patient safety, process improvement, regulatory compliance, and support costs.

Documenting soft returns is vital and involves identification of what needs to be improved, creating a method of calculating benefits, and establishing the budget for the whole process. The net benefits must also be examined. For instance, an individual might examine the soft returns from the proposed project through establishing an aspect which may require improvement and that would be an opportunity. For instance, a healthcare organization might establish that there is an opportunity to protect patients’ records with an increased number of passwords and limit access to patient information in accordance with the organization’s objectives. The managers would then create a formula for calculating the benefits. In the case above, the organization will compare the costs it used to implement the project and then compare it with the money it could have used if there was a breach. For example, the cost of implanting an advanced password is about $5,000. In the case of a $10,000 breach, it could cost the organization up to $7 million. The benefits of this implementation are therefore evident and include better healthcare, no breaches, and minimal medical errors. There is also a need for IT involvement to create strict codes that would allow specific personalities to access sensitive information. IT is essential because it creates efficiency, increases quality delivery; ensure customer satisfaction, and general effectiveness (Baxter, et al, 2014).

Financial Benefits and Capital Acquisition

There are various benefits that come with EHR implementation. For instance, reports from physicians across the country indicate that there has been an improved quality life and minimal errors. However, the cost of implementing this program is expensive but it is worth the investment. A capital acquisition is a capital which is used to purchase additional items/assets. A business uses this capital to acquire items like software, inventory, equipment, and other businesses (Frost, Sonfield, Zolna, & Finer, 2014). The major objective of this purchase is to increase profitability. EHR is expensive but it enables quality in service delivery. Acquisition capital can be acquired through help from lenders and external investors who may be interested in partner with the organization.

Project Management Office (PMO)

HER implementation requires more resources and time to be effective. However, it is effective and worth because of its benefits. In this regard, various projects create a Project Management Officer (PMO). A PMO is used to help acquire capita acquisition to help improve quality services, enhance customer satisfaction, and create managerial effectiveness (Phillips, 2012). The office of PMO in an organization works to determine and maintain standards for project management in the business. The PMO is therefore critical in enhancing organizational effectiveness.

Lastly, I would welcome anyone with a question regarding Phase II. Otherwise, thank you for your time and would like to see you soon for the Phase III presentation.

References

Phillips, J. J. (2012). Return on investment in training and performance improvement programs. Routledge.

Frost, J. J., Sonfield, A., Zolna, M. R., & Finer, L. B. (2014). Return on investment: a fuller assessment of the benefits and cost savings of the US publicly funded family planning program. The Milbank Quarterly, 92(4), 696-749.

Baxter, S., Sanderson, K., Venn, A. J., Blizzard, C. L., & Palmer, A. J. (2014). The relationship between return on investment and quality of study methodology in workplace health promotion programs. American Journal of Health Promotion, 28(6), 347-363.

UNDERSTANDING RETURN ON INVESTMENT (ROI) PHASE 3.

Hello, I would like to start by appreciating every one of you for continued support and participation in my presentation. My name is ……, the accounting firm Health Service Manager at Pennypacker and Vandelay. I want to dwell more on phase 1 and 2, but if there is anyone with any question, I give the opportunity.

In phase 3 presentation on understanding Return on Investment I will focus on justification of capital expenditure. The critical aspects considered in the analysis will be the amount and type of expenditure, investment decision, and detailed financial analysis.

The essential elements in justification of expenditure can be assessed through a primary care physician in ambulatory-care settings across the U.S, but also from Partners HealthCare System. The same evaluation can be done using the Partners Healthcare system developed in the United States many years ago. The system was designed by the Massachusetts General Hospital, Brigham and the Woman’s Hospital in the U.S. This analysis is based on statistics derived from the following group of institutions. The study consists of 75 women under the age of 65 years and 2500 patients. Seventy-five percent of the patients used in the analysis belong to the capitated plan. To ensure accuracy in the results the composition of the panel was varied to 3000 from 2000 patients.

Justification needs to be developed to detail on the decision to procure EMR used in the ambulatory offices. The justification will provide answers as to my investment was a meaningful and worthy undertaking. Cleverly (1997) defines Return on Investment (ROI) as the determination of the most justification of capital investment or expenditure. In arriving at the best decision, a cost-benefit analysis should be conducted. The assessment gives the gains that should be expected out of a particular investment. It will also give the expected period of return and the cost to be incurred in undertaking the investment. There are several obstacles to the analysis of return on investment.

The first challenge in expenditure analysis is the nature of return on investment that the procured EMR would yield to the company. Opting to purchase a new EMR would mean that the insurance companies would reimburse the office at a higher rate for quality services to the patients. The high rate would be due to cost-effective results. The type of ROI will be termed as a “hard investment.” The benefits of the option include improved utilization of radiology tests, low billing errors, better calculation no patient charges and saving on drug expenditure (Ricardo Custodio, Anna M. Gard, & Garth Graham, 2014). The investment will take a shorter duration to yield profit and reimburse the cost incurred in acquiring it. Considering the purchase of a system software after implanting the initial investment then there will be no immediate cash inflows.

In addition to the nature of the ROI, the associated amount and scope of the expenditure should also be considered. The consideration involves a comparison of the cost of operating without the equipment and the cost of acquiring and implementing the EMR equipment. The cost of implementing the electronic medical record system for five years was $86, 400 per provider. The main benefit acquired in implementing EMR was saving on drugs by 33% of the total. Other benefits include a 17% reduction in radiology utilization, a 15% improvement in charge capturing and 15% reduction in billing errors. The cost of purchasing, installing and implementing the EMR comes to $40,000 (Campbell, Donelan, Rao, & Blumenthal, 2013). Considering the product solvency and competitiveness the capital decision to buy the EMR was suitable.

With the initial purchase cost of EMR as $42,900 and a discounted Rate of 6%, the NPV will be -$40,326. The Present Net Value arrived as shown:

At rate x initial investment will be (6% x $42,900) = $2,574.00

The then $2,574.00 – ($2,574.00-$42,900.00) which is the initial investment.

Therefore NVP = -$40,326.00.

I am considering the alternative payment option offered by the EMR Company.

The option allows only $ 2,784.00 for five years with a discounting rate of 5%.

The NPV will be -$43,616.00.

The calculations prove that the first option was healthier compared to the second one. The investment cost of $42,900 yields is greater NPV.

The other financial methods in justifying capital expenditure are the profitability index. Profitability index is arrived at by dividing the NPV by the cost of the investment.

Therefore the PI will be (-$40,326.00 / $43,616.00) = 0.92.

Research shows that viable projects for funding should have a PI greater than zero should be funded. The positive value proves that the investment is worthy and will yield positive returns.

The decision arrived at was based on literature analysis. The analysis concentrated on the inpatient since the outpatients were less certain. The EMR system gain depends on the size if the healthcare facilities in terms of patients. The cost-benefit analysis conducted is only relevant for primary care physicians. Since diagnosis services are on high demand for specialists, there is a likelihood of cost saving. The study offers are the rationale for the implementation of the EMR system. The study guides decision making on the implementation of EMR in primary care. Not all benefits of the EMR were able to be quantified. Other benefits of EMR included improved quality care, reduced medical errors and better healthcare access.

Based on the cost-benefit analysis it was found that EMR was a practical and efficient purchase. The projected gains include an increased number of patients due to service satisfaction, decreased wait time, better patient-physician communication and an overall increase in profitability. The EMR will yield enough returns for maintenance. It is such a profitable investment.

Does anyone have a question concerning our phase I, II and III? Thank you for participating in the presentation.

References

Cleverley, W. (1997). Essentials of health care finance (4th Ed.). Gaithersburg, Md.: Aspen.

Custodio, R., Gard, A., & Graham, G. (2009). Health Information Technology: Addressing

Campbell, E. G., Donelan, K., Rao, S. R., & Blumenthal, D. (2013). Use of Electronic Health Records in U.S. Hospitals. New England Journal of Medicine, 360(16), 1628-1638. doi:10.1056/nejmsa0900592

Ricardo Custodio, Anna M. Gard, & Garth Graham. (2014). Health Information Technology: Addressing Health Disparity by Improving Quality, Increasing Access, and Developing Workforce. Journal of Health Care for the Poor and Underserved, 20(2), 301-307. doi:10.1353/hpu.0.0142.

*** Please look at How I start in Phase 1,2 and 3 you have to start semellaer it. Also, ask them in final and Question.

3 pages

3 different references

 

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