Project #3169 - Implamintation of Electronic medical records

I need help with finance for my Capstone project. The text all written, I need only help with finance part
Please let me know if you can help me to do the business analysis/ finance for Hospital with 41 doctors for Implamintation of Electronic Medical records and show in EXCEL that this profitable business for Hospital (years 1-5) 
I need to know what initial investment must be/expances/ profit for hospital in the first year, second, third, fourth and fifth year
I need to emplamant the Electronic Medical Records Software Provider "Allscripts Healthcare solution, INC" to Somerset Medical Center, NJ. Somerset Medical Center using only paper medical records today. This hospital has the Medical record department where working many people, which are doing copies of med records, filing, sending boxes to storage etc. There are 41 physicians at the Somerset Medical Center hospital included on the list of U.S. News Top Doctors. These doctors span 26 specialty areas.
My project will help this hospital to improve their work- implementation of EMR
We must include all financial data to EXCEL....
Please ask tutor to provide on the EXCEL the Cost- Benefit analysis ,find ROI (5 years), Table with Annual Expenditures, Statistical analysis and Effect of Electronic Medical Record Feature Set Variations on Net Benefits for implamantation of Electronic Medical records at Somerset Medical Center, NJ and sensitivity analysis.
Also please write the Financial conclusion after Tables and provide the graphs.
The EMR software provider is "Allscripts"

Please see the example below:- THIS IS what I need to include to EXCEL!!!!

But this data from 2002 (very old), we must include more realistic numbers for 2013 year.

Example I copied from article:
The American Journal of Medicine
Volume 114, Issue 5 , Pages 397-403, 1 April 2003

A cost-benefit analysis of electronic medical records in primary care (2002)


There are two categories of costs associated with electronic medical record implementation: system costs and induced costs (Table 1). System costs include the cost of the software and hardware, training, implementation, and ongoing maintenance and support. Induced costs are those involved in the transition from a paper to electronic system, such as the temporary decrease in provider productivity after implementation.

Table 1. Costs of Electronic Medical Record System Used in the Model (Per Provider in 2002 U.S. Dollars)
 Base CaseSensitivity Analysis (Range)Reference
System costs      
Software (annual license) $1600 $800–$3200 *
Implementation $3400  
Support and maintenance $1500 $750–$3000 *
Hardware (3 computers + network) $6600 $3300–$9900 *
Induced costs      
Temporary productivity loss $11,200 $5500–$16,500 *

*Data from Partners HealthCare System, Boston, Massachusetts.


†B. Middleton, MD, MPH, MSc, MedicaLogic, written communication, 1998.

The software costs of $1600 per provider per year were based on the costs for our electronic medical record system at Partners HealthCare on an annual per-provider basis (as an “application service provider” model); this figure includes the costs of the design and development of the system, interfaces to other systems (e.g., registration, scheduling, laboratory), periodic upgrades, and costs of user accounts for support staff. Although these software costs were based on our internally developed system, they are consistent with license fees for commercially available systems, which have been estimated at between $2500 and $3500 per provider for the initial software purchase, plus annual maintenance and support fees of 12% to 18% (K. MacDonald, First Consulting Group, Lexington, Massachusetts, written communication, 1999). In sensitivity analyses, software costs were varied from 50% to 200% of the base value.
Implementation costs, estimated at $3400 per provider in the first year, included workflow process redesign, training, and historical paper chart abstracting. Ongoing annual maintenance and support costs were estimated to be $1500 per provider per year and included the costs of additional technical support staff and system/network administration.
Hardware costs were calculated to be $6600 per provider for three desktop computers, a printer, and network installation. We assumed that hardware would be replaced every 3 years.
Based on our experience, we modeled the induced costs of temporary loss of productivity using a decreasing stepwise approach, assuming an initial productivity loss of 20% in the first month, 10% in the second month, and 5% in the third month, with a subsequent return to baseline productivity levels. Using the average annual provider revenues for our model patient panel, this amounted to a revenue loss of $11,200 in the first year.


Financial benefits included averted costs and increased revenues. We obtained figures for average annual expenditures for a primary care provider at our institution before the implementation of an electronic medical record, and applied to this the estimated percentage cost savings after implementation (Table 2). For each item, the estimated savings was varied across the indicated range of values in the sensitivity analysis. Benefits were divided into three categories: payer-independent benefits, benefits under capitated reimbursement, and benefits under fee-for-service reimbursement 32, 33, 34, 35, 36, 37, 38, 39, 40.

Table 2. Annual Expenditures Per Provider (in 2002 U.S. Dollars) before Electronic Medical Record System Implementation and Expected Savings after Implementation
 Annual Expenditures before ImplementationExpected Savings after Implementation 
AmountReferenceBase Case Estimated SavingsSensitivity Analysis (Range)Reference
Payer independent          
Chart pulls $5 (per chart) * 600 charts 300–1200 *
Transcription $9600 * 28% 20%–100% *,32
Capitated patients          
Adverse drug events $6500 33–36 34% 10%–70%
Drug utilization $109,000 15% 5%–25%
Laboratory utilization $27,600 8.8% 0–13% 37–39
Radiology utilization $59,100 14% 5%–20%
Fee-for-service patients          
Charge capture $383,100 2% (increase) 1.5%–5% 25, 40
Billing errors $9700 78% 35%–95%

*Primary data from the Partners HealthCare Electronic Medical Record System, Boston, Massachusetts.


†From the Department of Finance, Brigham and Women’s Hospital, Partners HealthCare System.

‡Expert panel consensus.

Payer-independent benefits, which apply to both capitated and fee-for-service patients, come from reductions in paper chart pulls and transcription. The average cost of a chart pull at our institution is approximately $5, accounting for the time and cost of medical records personnel to retrieve and then re-file a paper chart. After conversion to the electronic medical record system, chart pulls can be reduced by 600 charts (range, 300 to 1200) per year, based on the experience at one Partners HealthCare clinic. Transcription costs were reduced by 28% from partial elimination of dictation. In the sensitivity analysis, we varied the savings from 20% to 100% based on the experiences from other implementations (32).
Benefits under capitated reimbursement accrue to the practice and health care organization primarily from averted costs as a result of decreased utilization. Clinical decision support alerts and reminders can decrease utilization by reducing adverse drug events, offering alternatives to expensive medications, and reducing the use of laboratory and radiology tests 37, 38, 39, 41, 42, 43, 44. The expert panel consensus was that adverse drug events would be reduced by approximately 34% (range, 10% to 70%) as a result of basic medication decision support. We used standard financial benchmarks 33, 34, 35 to assign baseline costs for adverse drug events, which took into account additional outpatient visits, prescriptions, and admissions due to adverse drug events (36).
The expert panel estimated that alternative drug suggestion reminders would save 15% (range, 5% to 25%) of total drug costs per year, and this was applied to the baseline annual drug expenditures for the capitated patients in the panel. We estimated that laboratory charges could be reduced by 8.8% (range, 0 to 13%) using decision support 37, 38, 39. Based on information from other studies, the expert panel estimated that decision support for radiology ordering would achieve average savings of 14% (range, 5% to 20%).
Benefits under fee-for-service reimbursement included increased revenue and reduced losses. Computerizing the encounter form process can improve the capture of in-office procedures that were performed but not documented. Based on other studies 25, 40, we projected a 2% improvement in billing capture (range, 1.5% to 5%). By using an electronic medical record system that either supplies or prompts for certain required fields, billing error losses can be reduced. The expert panel estimated that computerizing the encounter form could decrease these errors by 78% (range, 35% to 95%).

Statistical analysis

We assumed that initial costs would be paid at the beginning of year 1 and that benefits would accrue at the end of each year (Table 3). We assumed a phased implementation, in which only basic electronic medical record features were available in the first years (e.g., medication-related decision support), and more advanced features were added in subsequent years (e.g., laboratory, radiology, and billing benefits). The primary outcome measure was net benefit or cost per primary care provider. A discount rate of 5% was used in the base case and varied from 0% to 10% in the sensitivity analysis.

Table 3. 5-Year Return on Investment Per Provider for Electronic Medical Record Implementation
 Initial CostYear 1Year 2Year 3Year 4Year 5Total
Software license (annual) $1600 $1600 $1600 $1600 $1600 $1600  
Implementation $3400            
Support $1500 $1500 $1500 $1500 $1500 $1500  
Hardware (refresh every 3 years) $6600     $6600      
Productivity loss   $11,200          
Annual costs $13,100 $14,300 $3100 $9700 $3100 $3100 $46,400
Present value of annual costs* $13,100 $13,619 $2812 $8379 $2550 $2429 $42,900
Chart pull savings   $3000 $3000 $3000 $3000 $3000  
Transcription savings   $2700 $2700 $2700 $2700 $2700  
Prevention of adverse drug events     $2200 $2200 $2200 $2200  
Drug savings     $16,400 $16,400 $16,400 $16,400  
Laboratory savings         $2400 $2400  
Radiology savings         $8300 $8300  
Charge capture improvement         $7700 $7700  
Billing error decrease         $7600 $7600  
Annual benefits   $5700 $24,300 $24,300 $50,300 $50,300 $154,900
Present value of annual benefits*   $5429 $22,041 $20,991 $41,382 $39,411 $129,300
Net benefit (cost) $(13,100) $(8600) $21,200 $14,600 $47,200 $47,200 $108,500
Present value of net benefit (cost)* $(13,100) $(8190) $19,229 $12,612 $38,832 $36,982 $86,400

*Assumes a 5% discount rate.

One-way and two-way sensitivity analyses were performed using the ranges shown in Table 1, Table 2. Two-way sensitivity analyses were performed using all combinations of the five most important variables identified in the one-way sensitivity analysis, and with pairwise combinations of one benefit variable with each of the three primary cost variables (software, hardware, and support). A five-way sensitivity analysis was performed using the most and least favorable conditions for the five variables. The time horizon was also varied from 2 to 10 years.
To account for variations in functionality among different systems, we constructed two additional models in which only subsets of the full functionality were included (Table 4). The “light” electronic medical record system included savings from chart pulls and transcriptions only, whereas the “medium” system also included benefits from electronic prescribing (adverse drug event prevention and drug expenditure savings).

Table 4. Effect of Electronic Medical Record Feature Set Variations on Net Benefits
FeatureBenefitLight EMRMedium EMRFull EMR
Online patient charts Chart pull savings + + +
  Transcription savings + + +
Electronic prescribing Adverse drug event prevention   + +
  Alternative drug suggestions   + +
Laboratory order entry Appropriate testing guidance     +
Radiology order entry Appropriate testing guidance     +
Electronic charge capture Increased billing capture     +
  Decreased billing errors     +
Net benefits (costs):   ($18,200) $44,600 $86,400
EMR = Electronic Medical Record.

Back to Article Outline


In the 5-year cost-benefit model (Table 3), the net benefit of implementing a full electronic medical record system was $86,400 per provider. Of this amount, savings in drug expenditures made up the largest proportion of the benefits (33% of the total). Of the remaining categories, almost half of the total savings came from decreased radiology utilization (17%), decreased billing errors (15%), and improvements in charge capture (15%).

Sensitivity analyses

The model was most sensitive to variations in the proportion of patients in capitated health plans; the net benefit varied from $8400 to $140,100 (Figure). The model was least sensitive to variations in laboratory savings, in which the net benefit ranged from $82,500 to $88,300.

Subject Business
Due By (Pacific Time) 3/13/13
Report DMCA

Chat Now!

out of 1971 reviews

Chat Now!

out of 766 reviews

Chat Now!

out of 1164 reviews

Chat Now!

out of 721 reviews

Chat Now!

out of 1600 reviews

Chat Now!

out of 770 reviews

Chat Now!

out of 766 reviews

Chat Now!

out of 680 reviews
All Rights Reserved. Copyright by - Copyright Policy