Essay: EMR

Pages: 11 (3022 words)  ·  Bibliography Sources: 3  ·  Level: Master's  ·  Topic: Business - Management  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] The second assumption that is embedded in this is that there will be cost savings that accrue from efficiency and liability. On the former, the figure is a rough estimate based on being able to transmit information more quickly, which would allow the organization to admit more patients in the course of a year. In addition, more patients might be attracted to the facility on the basis of it having modern information technology. The liability benefit is an estimate that would need to be confirmed by the insurance company. Only 1.7% of doctors per year face a judgment in a malpractice case, so it is unlikely that in a given year there will even be a judgment. Furthermore, there are no studies that outline specifically whether or not the eCube will reduce the number of judgments -- there has not been time for a proper longitudinal study on the issue. Even the insurance company is unsure of the effect that the program will have on rates, pending an investigation into the issue.

The final assumption is that the cash flows are otherwise predictable. The compliance fine may escalate according to law, or it may be postponed if there are enough institutions struggling to acquire such systems. The license fees will be locked in for a short period, but not likely for the full ten years. Overall, however, this assessment represents the best data available, and this data shows that there is a clear financial case for the purchase of the eCube system for electronic medical records from Fresenius.

A sensitive analysis shows that if expectations of efficiency savings growth are zero instead of 10% per year, that alone knocks the NPV to just $25,246. A scenario with $15,000 per year in efficiency benefits and $12,000 per year in liability benefits would result in a negative net present value. However, such a scenario represents a "worst case" scenario for multiple factors. The odds of such a scenario occurring are small, and it is most likely that the scenario that will come to pass is one that sees a modest positive financial return. While it is possible that other software solutions could also offer a similar positive return, it is unlikely that they will be materially different, so the best option simply comes down to which product is the best for the organization in terms of enhancing patient outcomes and compliance. In this case, the analysis held that the eCube product from Fresenius was the best option.

IV Executive Summary

With any capital budgeting decision, there are different factors that must be taken into consideration. In this case, there are several different alternatives that have been considered. The first is the eCube, but there is also the possibility of using another system, or not using any EMR system and just paying the fine to the government. A full evaluation would include all of these, but time and space forbids the researching of other EMR systems -- this is a process that takes months under normal circumstances. The default "do nothing" option that would incur fines has no up-front or ongoing costs, except for those fines. As a result, that option has a negative net present value. The eCube option has a positive net present value, so it is the better of the two known alternatives.

Of the criteria that often go into capital budgeting decision, one that stands as invalid is that of past performance. This is a managerial consideration -- some department heads champion mediocre projects to acquire funding and prestige for their units. So for example if there was a decision between, say, a new MRI machine or a new surgical theatre. In this case, there are no such vested interests. Different departments are not competing for funding as the organization has specifically earmarked funds for EMR to ensure compliance with the Affordable Care Act.

The sixth criteria is risk projection, and that is dealt with under the sensitivity analysis. While this analysis shows that there is a risk that the project will lose money, the odds remain that the project will make a positive financial contribution to the organization. Overall, this project fits all of the criteria. The financials work out well, and there is only limited risk that the numbers will be off.

The key stakeholders are seeking a solution that allows the company to achieve ACA compliance, but also to make a positive financial contribution to the organization. The ACA has mandated the use of electronic medical records because these are associated with positive outcomes for patients. The key for the organization is to ensure that the outcomes are also positive for the company. These include finding ways to mitigate risk, and to ensure that the project meets its financial criteria as well.

The most important financial criterion is that the project should have a positive net present value (NPV). The NPV means that the benefits of the project are positive when weighed against the costs on a time-adjusted basis. Thus, the evaluation examines the expected cash flows from the project and discounts them back to present-day dollars using the company's cost of capital.

The general rule of thumb with the NPV is that if the project has a positive NPV, then the project should be approved. This is because the project increases the value of the organization. In this instance, the costs and benefits must be evaluated, and each comes embedded with a set of assumptions. The net present value of the project is positive, and it is higher than the main alternative, which is to do nothing and simply pay the fines. Thus, the eCube has been approved.

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-150000

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-25000

-25000

-25000

-25000

-25000

20000

22000

24200

26620

29282

15000

15000

15000

15000

15000

10000

20000

20000

20000

20000

-150000

20000

32000

34200

36620

39282

10%

$234,172.94

$84,172.94

That said, implementing the eCube system of electronic medical records management is fraught with risk and management needs to pay close attention to this project in order to ensure that the risk associated with this implementation is mitigated as much as possible. There are several steps that will allow the company to mitigate risk. The first is that a thorough investigation of the different systems must be undertaken, including the eCube. This process should include not only gathering data from Fresenius, but also from companies that have implemented this system in the past as well. This is important, because those companies will be able to identify issues that might possibly affect our organization. With all of the inherent risks in a new software implementation, it is important to get a sense of the problems that others have had in similar situations with this software.

Leadership is also critical to ensuing that implementation is successful. All the projections in the world do not matter if the implementation is poorly-executed. With technological change in particular, there is often resistance and this resistance is common with electronic health records in particular. A high level of visible leadership commitment to this implementation can help to remove some of the resistance. Another strategy to reducing risk associated with the implementation is to get all of the different stakeholders involved in the decision to pursue the project. In this situation, the use of EMR is mandated by law, so the biggest factor in getting stakeholder involvement is that the organization needs to identify all of the issues ahead of time, and ensure that those are might be oriented towards resistance feel that they are contributing to the process, and have been all along. This will remove some of the risk associated with poor implementation.

The final consideration is that electronic medical records will help to streamline procedures, and will help to provide more information, and faster, to the practitioners. As such, eCube should be able to improve organizational efficiency and reduce the liability risk associated with malpractice. These savings need to be included in the calculations, and when they are the project looks like a success. The other savings that needs to be included in the calculation is the fine that the company will not pay if it utilizes electronic medical records.

eCube by Fresenius is a smart system, one that provides some of the best software for managing electronic medical records. The system's features are rich and powerful, and as such it is a good match for the needs of our organization. The numbers show that implementing eCube is likely to increase the value of the company, so there is little room for financial objection. Further, eCube represents a positive development in terms of the management philosophy of the company, because it emphasizes efficiency and modernity, providing strong returns for the next decade on the initial investment. With positive net present value, a full knowledge of the risks involved in the decision, sound strategies for eliminating those risks, the… [END OF PREVIEW]

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EMR.  (2013, November 6).  Retrieved June 26, 2019, from https://www.essaytown.com/subjects/paper/emr-several-criteria/6359829

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"EMR."  Essaytown.com.  November 6, 2013.  Accessed June 26, 2019.
https://www.essaytown.com/subjects/paper/emr-several-criteria/6359829.