## Wednesday, May 6, 2020

### Analyzing Roi With Emr System - 1964 Words

Analyzing ROI with EMR System The purpose is to have a quantitative financial return that would provide immediate profit and quick compensation for the initial investment cost. ItÃ¢â‚¬â„¢s important to validate any expense with the exact amount and type of expenditure being considered should be assessed. Analyzing the costs with operating without an EMR system, the 5-year net cost applying a full electronic medical record system was \$86,400 per provider (Wang, et al., 2003). An addition, savings in drug expenditures made up the main portion of the benefits of 30- 33% of the total. The rest of the categories of almost half of the total savings came from the decreased radiology consumption (17%), billing errors (15%), and improvements in chargeÃ¢â‚¬ ¦show more contentÃ¢â‚¬ ¦The calculation would indicate Rate (x) initial investment (6% x \$42,900) = \$2,574.00 and minus the initial investment (\$2,574.00 - \$42,900.00) totaling -\$40,326.00. All in all, this can be compared to the second pa yment option presented by the EMR Company, which allows \$2,784.00 payments over 5 years with the same discount rate of 6%. As a result, this generates an NPV of -\$43,616.00 using the same calculation. It is beneficial to show the NPV calculation that showed two options of financing alternatives presented by the EMR Company and proved it was financially healthier to purchase the EMR with a larger initial investment of \$42,900.00 which generated a greater NPV, (Wang et al., 2003). Another Analysis of Second Financial Method The next financial method to be utilized during the financial analysis portion of capital expenditure justification is the Profitability Index (PI). Furthermore, the PI value would sustain the acquisition of this specific EMR system due to it being a positive value. The PI calculation is as follows: 0.92 (-\$40,326.00/\$43,616.00). The overall PI value is 0.92 The efficiency of some of these inventions was demonstrated in the inpatient setting, but outpatient success is less involved. Electronic medical records could as well be linked to additional costs with the implementation. For instance, the research