Application of cost-benefits analysis (CBA) in Hospital Setting
“Cost-benefits analysis measures the benefits and costs of projects in money terms: this often requires that we place dollar values on years of life or improvements in health and well-being” (Folland, Goodman, & Stano, 2010 Pp 67). Studies related to the post-acute rehabilitation of the traumatically brain injured (TBI) have centered on quality-of-life issues. There has been little attention paid to cost/benefit relationships. The study showed a statistically important benefit and cost savings, over time, for those patients receiving post-acute rehabilitation. These benefits are in addition to improved quality-of-life benefits.
Another cost-benefits analysis in the hospital setting is the implementation of electronic medical record (EHR). Electronic medical record systems improve the quality of patient care and decrease medical errors, but their ...view middle of the document...
This study proposes that there is a huge likelihood of disability reduction and cost savings over the long term.
Cost of implementing Electronic medical records
There are two categories of costs associated with electronic medical record implementation: system costs and induced costs. “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” (Wang et al, 2003).
Benefits of implementing Electronic medical records
Payer-independent benefits, which apply to both capitates 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” (Wang et al, 2003) .
The study on TBI focused on cost/benefit issues to give insight into the financial ramifications of provision of post-acute rehabilitation services. While financial matters should not be the only determinant of the type of care a patient receives, the result recommends that services which enhance the quality of life for the TBI patient and his/her family are also likely to provide substantial financial relief to responsible parties.
Implementation of an electronic medical record system in primary care can result in a positive financial return on investment to the health care organization.
Ashley, J. M., Krych, D. K., (1990), Cost/Benefit Analysis for Post- Acute Rehabilitation of the Traumatically Brain-Injured patient; Journal of Insurance Medicine, Retrieved January 20, 2011, from http://www.neuroskills.com/cns/costbenefit.pdf.
Folland, S., Goodman, A., & Stano, M. (2010): The economics of health and health care (6th Ed.). Upper Saddle River, NJ: Prentice Hall.
Wang, J. S. et al (2003) A Cost-Benefit Analysis of Electronic Medical Records in Primary Care; Retrieved January 21, 2011, from http://www.tss.dsu.edu/sdehra/documents/WangEMRCostBenefit.pdf