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Return on investment for a computerized physician order entry system
Rainu Kaushal1, Ashish K Jha, Calvin Franz
1Division of General Medicine and Primary Care, Department of Medicine, Brigham and Women's Hospital and Harvard Medical School, 1620 Tremont Street, Boston, MA 02120-1613, USA. rkaushal@partners.org
Insights
Computerized physician order entry (CPOE) systems offer significant financial benefits, saving hospitals millions. Investing in CPOE can improve patient safety and reduce costs.
Area of Science:
- Health Informatics
- Healthcare Management
- Clinical Systems
Background:
- Hospital adoption of Computerized Physician Order Entry (CPOE) systems has been slow due to high costs and uncertainty about financial returns.
- Limited data exists on the long-term financial impact of CPOE implementation in academic medical centers.
Purpose of the Study:
- To assess the ten-year costs and financial benefits of a CPOE system at Brigham and Women's Hospital (BWH).
- To determine the net savings and operating budget impact of CPOE implementation.
Main Methods:
- A ten-year cost-benefit analysis of the CPOE system at BWH, a 720-bed academic hospital.
- Data collection involved institutional experts, published studies, interviews, and internal documents.
- Financial figures were presented in 2002 dollars, accounting for an 80% prospective reimbursement rate.
Main Results:
- BWH spent $11.8 million on CPOE development, implementation, and operation between 1993 and 2002.
- The system generated $28.5 million in savings over ten years, resulting in cumulative net savings of $16.7 million.
- Key savings drivers included renal dosing guidance, nursing time optimization, drug guidance, and adverse drug event prevention.
Conclusions:
- The BWH CPOE system demonstrated substantial cost savings and operating budget improvements over a decade.
- Hospitals can achieve financial benefits and enhance patient safety by investing in CPOE systems.
Objective:
Although computerized physician order entry (CPOE) may decrease errors and improve quality, hospital adoption has been slow. The high costs and limited data on financial benefits of CPOE systems are a major barrier to adoption. The authors assessed the costs and financial benefits of the CPOE system at Brigham and Women's Hospital over ten years.
Design:
Cost and benefit estimates of a hospital CPOE system at Brigham and Women's Hospital (BWH), a 720-adult bed, tertiary care, academic hospital in Boston.
Measurements:
Institutional experts provided data about the costs of the CPOE system. Benefits were determined from published studies of the BWH CPOE system, interviews with hospital experts, and relevant internal documents. Net overall savings to the institution and operating budget savings were determined. All data are presented as value figures represented in 2002 dollars.
Results:
Between 1993 and 2002, the BWH spent $11.8 million to develop, implement, and operate CPOE. Over ten years, the system saved BWH $28.5 million for cumulative net savings of $16.7 million and net operating budget savings of $9.5 million given the institutional 80% prospective reimbursement rate. The CPOE system elements that resulted in the greatest cumulative savings were renal dosing guidance, nursing time utilization, specific drug guidance, and adverse drug event prevention. The CPOE system at BWH has resulted in substantial savings, including operating budget savings, to the institution over ten years.
Conclusion:
Other hospitals may be able to save money and improve patient safety by investing in CPOE systems.
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