Technology governance strategies for maximizing healthcare economic value. Developing management systems for IT

Based on industry averages, healthcare providers spend from 1.5 percent to 3 percent of their revenues on information technology. That can equate to a million dollars a year for even the smallest hospitals and as much as $50 million or $60 million a year for large health systems. That significant amount of capital must be wisely managed because these investments are long-term assets that can help transform the enterprise and contribute to the organization's strategic goals. Unfortunately, in many hospitals these investments are often made without regard for the actual return on investment that the systems will generate. ROI, or economic value, is difficult to quantify in healthcare because of the complex multi-dimensional processes and perspectives that exist. Administrators and providers often question how a clinical system can be quantified and compared with an ERP, research technology or any other information system. When value can be defined in so many ways - such as improvements in clinical outcomes, improvements in system uptime or reliability, or enhancements in productivity and operational business processes-quantification of economic value becomes much more ambiguous and therefore easy to neglect. However, business value can be created by any combination of shifts in performance. Reductions in waiting lines, improvements in imaging capabilities, increased procedures per labor hour, extensions of system life and higher transaction processing all have potential value. However, ROI cannot be calculated or maximized if underlying key performance indicators are not defined and measured, both pre- and post-implementation. This article will build on solid governance strategies for IT that will help to ensure positive economics and improved productivity in healthcare. It also will discuss specific strategies and methods for extracting the most value out of IT in healthcare.