Financial planning and budgeting is a crucial process that healthcare organizations undertake which helps to determine the costs and benefits of their existing EHR software. To accurately measure the tangible and intangible costs associated with EHR software is not easy. The cost-benefit analysis model does not only include tangible benefits but intangible items need to be quantified as well for accuracy and precision.
Through the cost-benefit analysis, practice will be able to weigh the costs and benefits associated with their EHR investment. This financial analysis is not only beneficial in showing costs and benefits during the time practice is selecting an EHR software system but also should evolve to reflect the financial balance in the future.
How to conduct an EHR cost-benefit analysis?
The process can be broken down into the following measurements which helps in the financial decision-making process and estimates the value of costs and benefits to assess the financial performance of your EHR software system.
- Calculate all Present Costs – Presents costs include all direct and indirect costs related to the EHR software. These would include maintenance, updates, and implementation costs. Opportunity costs related to an EHR software need to be calculated as well.
- Calculate Present Benefits – Benefits can either be direct or indirect. An example of direct benefits would include additional cash flows. Indirect benefits make up for intangible goods such as reduced waste, enhancements in productivity levels, and cost reductions.
- Final Calculation – The end step of the cost-benefit analysis process is to add all costs and benefits to see if the benefits outweigh the costs. This analysis aims to see when an EHR software will bring net profit to the medical practice.
Conducting a cost befit analysis shows a clear picture of the costs and benefits associated with EHR software adoption and reduces the firm to go under financial loses and risks. In the end, you need to be sure that your investment doesn’t lead you to financial jeopardy.