Transcript Project 2, Budget Analysis of an eTAR system.

Project 2, Budget Analysis of an
eTAR system.
David Morrison
Nursing Informatics
7/24/09
Statement of the Problem at Central
State Hospital:
• While CSH has an computer based point of care
medication administration record (POCMAR), we have
no similar electronic treatment administration record
(eTAR). Instead nurses have to manually go through
two different sources of paper records, leading to the
possibility of errors in treatment administration,
particularly the appropriate level of special
observations (1:1, 7.5”, or 15” checks). Inadequate
level of observation of patients is a reportable offense
to the office of the inspector general (OIG), and could
lead to serious harm to patients and/or staff.
Capital Expenditure Proposal:
• The definition of a capital expenditure project
at CSH is a project costing at least 10K$, and
would have to be approved through the
Kentucky Cabinet For Health and Family
Services.
• The costs of implementation of an eTAR would
certainly meet that threshold.
Barriers to Electronic Records in
Healthcare:
• A recent article by Jha (2009) stated that only 1.5% of US
hospitals responding have comprehensive electronic
medical records (EMR), and only 17% have computerized
physician order entry systems. A majority of hospitals cited
cost as the primary barrier.
• The Kentucky budget for the fiscal year beginning July 1,
2008, included a $1.2 million reduction in the SCS contract
with the KY Department of MH/MR . Retrieved 7/24/09
from Seven Counties Services webpage
http://www.sevencounties.org/poc/view_doc.php?type=ne
ws&id=115240&cn=0
• Implementation of a new electronic records system would
certainly result in up-front costs, and probably result in
long-term financial and patient safety benefits.
Possible Opportunities:
• My proposal would be to apply for federal funding via
the 19 billion dollars appropriated for medical
electronic records as part of the 2009 recovery act
(information available at
http://www.hhs.gov/recovery/grantscontracts/index.ht
ml
• Further information at:
http://www.hhs.gov/asrt/og/grantinformation/apptips.
html).
• This is a unique grant-writing opportunity fro this
specific purpose via the federal cabinet-level
department of health and human services.
Contrast of Current, Proposed System:
Current System
• As stated previously, nurses are currently
required to go through 2 paper sources to find
out patients’ current level of observation. The
first source is the patients TAR (paper-based),
but in addition to this, nurses also must go by
the current doctor’s order. This is found by
going through, manually, each doctor’s order,
possibly over a period of weeks or even
months until the nurse finds the most recent
order about level of observation status.
Proposed System:
• Under the proposed system, CSH would have
an eTAR (electronic treatment administration
record), similar to the POCMAR currently in
use for medicine administration.
• Nurses would have one place to go,
conveniently at the beginning of the shift, to
check current observation status, along with a
tab (for all patients) of treatments to be
administered during the current shift.
Estimates of Initial Costs of the
System:
• I surveyed dozens of websites for Health Care Informatics
listed in the “top 100 list” at: http://www.healthcareinformatics.com/ME2/dirsect.asp?sid=C6AF5F270EBF4809
A9E6881632AEA97F&nm=The+HCI+100
• None of these companies have published costs of
implementing their systems, as these costs are developed
on an individual contract basis (there are no preset
software packages that organizations sell the way microsoft
sells windows – perhaps one statement of the problem for
implementing health informatics).
• In addition Quadramed, the company that makes CSH’s
POC MAR system did not return numerous phone calls
about cost.
Literature Review on System Cost for
Implementing Hospital Electronic Records:
• Medill Reports, a journal of graduate journalism students at Northwestern
University’s Medill School, reported, citing data from the AHA, that: “the
average capital investment for the computer infrastructure is $700,000 or
between 13 percent and 18 percent of the hospital’s capital expenditure
budget, according to the American Hospital Association’s 2007 survey of
member hospitals. The annual cost for maintaining those systems is
between $1.4 million and $4.5 million annually, or about 2 percent to 3
percent of the hospital’s operating expenses.”
• http://news.medill.northwestern.edu/chicago/news.aspx?id=90571
• CNNmoney.com
(http://money.cnn.com/2009/07/02/news/economy/stimulus_electronic_
health_records/index.htm) interviewed a company named Medsphere,
“which said installation and service costs of the system average less than
$1 million a year over the first five years, after which point annual service
costs range between $150,000 to $700,000, depending on the size of the
hospital.”
Literature Review (cont)
• At the other extreme is a report in a trade journal
called cioinsight.com
<http://www.cioinsight.com/c/a/HealthCare/Studies-Show-Electronic-Medical-RecordsMake-Financial-Sense/>, which reports a study of
14 small physician practices which found “that
electronic medical records cost an average of
$44,000 per full-time provider for initial setup
and an additional $8,500 annually per provider to
maintain.”
Cost Assessment:
• The studies on the high side, stated the total cost of
implementation for electronic records for inpatient services
in medical hospitals (paperless systems, in treatmentintensive settings) starting from paper systems. My
proposal would be less than that, because I am arguing for
implementation of a specific, limited system with typically a
smaller number of options, less specific programming for
my setting. On the other hand, the above mentioned study
reporting initial costs of 44,000 was for small physician
practices, not a 100 bed inpatient hospital. My estimates
will therefore be between these two extremes.
• I start with the Medill figure of 700,000, and then lower
that, based on the general nature of the electronic records
they discuss, and the specific nature of my proposal.
Cost Assessment: (Factoring in Quality
Improvement)
• In their discussion of the human-technology
interface McGonigle and Mastrian (2009, pp.
65-69) state that the design process should be
iterative and allow for (formal) evaluation and
correction of identified problems.
• This means that I need to factor in the cost of
my services as the nursing informatics
specialist (NIS) who implements the proposal.
Proposed Budget:
Proposed Budget for eTAR at CSH
Initial Software Purchase
Annual Maintenence Expenses
Upgrades
Computer Support
Implementation/Training
Higher staffing during implementation phase
Evaluation cost for CQI
Total:
•
100000
30000
0
40000
20000
10000
15000
215000
Note: maintenance and support costs are incremental costs, based on existence of
local computer support staff, who would also be expected to help train staff in use
of the system, based on a 2-step model, IT staff are trained by company, then train
local staff.
Cost-Benefit Analysis:
• In the preceding slide, I attempted to include the ‘hidden costs’ of formal
evaluation by the NIS, and potential higher staffing, based on the
expectation of initial lower productivity during the implementation phase.
• The primary financial benefit comes from the liability inherent in the
possibility of a missed special observation. We work in a line of nursing
where there is a serious potential of a patient or staff death. All patients
on involuntary holds (pursuant from the 202A statutes in Kentucky) have
been deemed to be a serious risk of harm to self or others. Patients on
special observations especially so. Given the volume of care, there is a
significant possibility over time that an error will be made that could result
in a death. The specific probability of this is difficult to evaluate. If we take,
as a baseline, the probability of a such an error being 1:100 (given enough
time and patients), and that the financial result of the liability to be in the
tens of millions, then the cost should be estimated in the hundreds of
thousands.
• Note that I am only considering the potential financial cost, the human
costs of such an incident cannot be estimated.
Value Analysis:
• In addition to the reduction of CSH’s liability from the
possibility of a special-observation error, an eTAR system
would produce more efficient flow of information.
• Over the long term there would be a net cost-savings in
reducing staffing workload, and an improvement in patient
care based on increased reliability of appropriately
administered treatments, and increased communication
between nursing staff and prescribers about patient
outcomes in response to a given set of treatments.
• Improved patient outcomes could also result in decrease
hospital stays, although this effect would have to be
formally assessed in order to be quantifiable.
Conclusions:
• For this study, I discussed the current patient care practices and
possibility of improvement at CSH with 2 different nursing
supervisors there (Debra Terry and Lynn Dillon).
• I reviewed literature to make estimates of likely costs for software
and implementation of an electronic records system for treatment
administration.
• My overall conclusion is that it is advisable to implement the
change.
• Funding is unlikely to be secured either from Seven Counties
Services or from the Kentucky Department of Health And Human
Services during the current budgetary cycle which began 7/1/09 (in
spite of the need and benefits).
• Therefore, I suggested grant-writing at the federal level, pointing to
resources made available by the federal recovery act of 2009.
My Background in Grant-Writing
• I have previously had experience in grant-writing, while
serving on:
– the board of directors (BOD) for the University Cooperative
Housing Association at UCLA.
– I helped allocate grants while on the Community Activities
Committee, part of the Graduate Students Association at
UCLA (for info, go to:
http://74.125.47.132/search?q=cache:PobWgj8jt7cJ:www.
studentgroups.ucla.edu/pab/CAC2009.doc+ucla+cac&cd=9
&hl=en&ct=clnk&gl=us)
– While on the BOD for the Brickhouse community center, I
successfully solicited discretionary funds from the city
councilmen George Unseld and Tom Owen.
General Conclusions: (based on my review
of the literature in nursing informatics).
• The current situation for nursing informatics is analogous to that of
automobile manufacturing before Henry Ford implemented modern
manufacturing techniques. A myriad of small companies (when
compared to the scale and complexity of the need) tailor
individualized solutions to hospital-based electronic healthcare
systems, similar to how individual craftsmen constructed cars
before the manufacturing line, failing to realize the cost benefits
and economies of scale inherent in generalizable software solutions
to what are, ultimately, a common set of tasks that hospital
providers face.
• What is needed is either a large scale government effort to create
universal platforms for healthcare-based electronic health records
(the public model), or the emergence of a smaller number of large
software corporations, who can invest the necessary development
costs, and maintain software development in tandem with
advances in healthcare delivery systems (the private model).
Bibliography
• Chaudhry, B. (2006). Systematic Review: Impact of Health Information
Technology on Quality, Efficiency, and Costs of Medical Care. Annals of I.
Medicine. Retrieved 7/20/09 from
http://www.annals.org/cgi/content/full/144/10/742#FN
• Healthcare Informatics ‘HCI 100 List’ (2009). Healthcare Informatics,
26(6):20-56, 2009. Retrieved July 20, 2009 from http://www.healthcareinformatics.com/ME2/dirsect.asp?sid=C6AF5F270EBF4809A9E6881632AE
A97F&nm=The+HCI+100
• Jha, A. (2009). Use of Electronic Health Records in U.S. Hospitals. New
England J of Medicine. Volume 360:1628-1638.
• Kuperman, G. (2003). Computer Physician Order Entry: Benefits, Costs,
and Issues. Ann Intern Med. 2003;139:31-39.
• McGonigle, D., & K. Mastrian (2009). Nursing informatics and the
foundation of knowledge. Sudbury, MA: Jones and Bartlett Publishers.