Return on Investment for Vendor Computerized Physician Order Entry in Four Community Hospitals: The Importance of Decision Support

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Abstract:

Background: In-hospital adverse events are a major cause of morbidity and mortality and represent a major cost burden to health care systems. A study was conducted to evaluate the return on investment (ROI) for the adoption of vendor-developed computerized physician order entry (CPOE) systems in four community hospitals in Massachusetts.

Methods: Of the four hospitals, two were under one management structure and implemented the same vendor-developed CPOE system (Hospital Group A), while the other two were under a second management structure and implemented another vendor-developed CPOE system (Hospital Group B). Cost savings were calculated on the basis of reduction in preventable adverse drug event (ADE) rates as measured previously. ROI, net cash flow, and the breakeven point during a 10-year cost-and-benefit model were calculated. At the time of the study, none of the participating hospitals had implemented more than a rudimentary decision support system together with CPOE.

Results: Implementation costs were lower for Hospital Group A than B ($7,130,894 total or $83/admission versus $19,293,379 total or $113/admission, respectively), as were preventable ADE–related avoided costs ($7,937,651 and $16,557,056, respectively). A cost-benefit analysis demonstrated that Hospital Group A had an ROI of 11.3%, breaking even on the investment eight years following implementation. Hospital Group B showed a negative return, with an ROI of -3.1%.

Conclusions: Adoption of vendor CPOE systems in community hospitals was associated with a modest ROI at best when applying cost savings attributable to prevention of ADEs only. The modest financial returns can be attributed to the lack of clinical decision support tools.

Document Type: Research Article

Publication date: July 1, 2013

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  • Published monthly, The Joint Commission Journal on Quality and Patient Safety is a peer-reviewed publication dedicated to providing health professionals with the information they need to promote the quality and safety of health care. The Joint Commission Journal on Quality and Patient Safety invites original manuscripts on the development, adaptation, and/or implementation of innovative thinking, strategies, and practices in improving quality and safety in health care. Case studies, program or project reports, reports of new methodologies or new applications of methodologies, research studies on the effectiveness of improvement interventions, and commentaries on issues and practices are all considered.

    Also known as Joint Commission Journal on Quality Improvement and Joint Commission Journal on Quality and Safety
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