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H H S Department of Health and Human Services
U.S. Department of Health and Human Services
Health Information Technology

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What return on investment (ROI) models can I use?

Return on investment (ROI) analysis is often used to build the business case for implementation.  Decision-makers use ROI to evaluate the investment by comparing the magnitude and timing of expected gains to the cost of the investment.  Calculation of return on investments for clinical systems can often be a complicated undertaking.  ROI in terms of health IT involves a comparison of the cost of investment to not only direct revenue gains, but also to savings from aversion of medical errors and operating efficiencies (e.g., improved communication).  Thus, the estimation of ROI for health IT systems may include "hard" benefits (e.g., decrease in length of stay) or "soft" benefits (e.g., improvement in patient safety and quality from misinterpretation of handwriting).  While some hard benefits may be measured in terms of revenue, most soft benefits can be difficult to quantify.

For health IT efforts, especially in the inpatient setting, higher patient volume can increase ROI.  Therefore, smaller hospitals, including CAHs and rural hospitals with less than 50 beds, attempting to implement a health IT system often face relatively larger costs per patient and will require longer time periods to recoup revenue gains.  However, certain benefits, including enhanced patient safety, can be realized sooner.

Resources on understanding what constitutes a ROI:

Additional Resources for ROI tools:

  • EMR ROI Calculator go to exit disclaimer - Developed by the Health Information Management and Systems Society (HIMSS)
Developed by the Health Resources and Services Administration as a resource for health centers and other safety net and ambulatory care providers who are seeking to implement health IT.
Health Information Technology Toolboxes help health centers, safety net providers, and ambulatory care providers with electronic and online resources and technical assistance to improve patient care.  More>
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