Question

Investment in IT is considered a driving factor in improving patient care; the critical question asked by CEOs, CFOs, and board members is whether hospitals achieve a financial return from their IT investments. The inability to measure and account for financial benefits from IT investments has led some hospital administrators to avoid making these types of capital investments that can provide more efficient, higher-quality care and also improve patient and provider satisfaction. One health care system that decided to make this investment is Banner Health, which implemented an IT system at its newest hospital, Banner Estrella Medical Center in Phoenix, Arizona. By investing in IT and receiving input from physicians, pharmacists, nurses, informaticists, and other clinicians, the hospital was able to design new work flows and establish evidence-based order sets. The improved IT design and standard order sets were implemented across departmental functions such as care management, clinical documentation, computerized provider order entry (CPOE), nursing order management, and medication administration and scheduling, and also across processes in departments such as health information management, emergency services, obstetrics, pediatrics, pharmacy, and surgery. This IT investment resulted in a $2.6 million cost savings from greater retention of nurses, which lowered the costs of recruiting, hiring, and training new nurses, and from reducing accounts receivable billing by one day, which resulted in faster payment; decreasing the incidence of adverse drug events, length of stay, and pharmacy costs; decreasing overtime expenses for nurses as a result of improving their efficiency in charting and shifting tasks; and reducing forms costs because information was digitized.

Answer 1

The investments in information technology assets and upgradation of existing software and hardware systems have been known to provide better quality of patient care, however many healthcare organizations have been shying away from making the necessary investments because they have not been able to showcase financial returns on these investments.

However Banner Health have been able to justify their investments in improved technologies by showing a resultant cost savings to the tune of $ 2.6 million. This has been achieved through better work flow management, better retention of staffs which reduced the hiring and training costs. Also IT intervention reduced the account receivables and thus reduced the working capital requirements. Moreover computerised systems led to reduction in overtime because of overall efficiency in many processes and also reduction in paper costs because of information being in digital form.