The Importance of Return On Investment

How can we get the most out of investment in an IT project? How can one be sure that they will get a return on their investment? This column, by Eloy M. Rodríguez addresses these questions. The Spanish author has worked with the groups of Healthcare of Data General, Sun Microsytems and Oracle on the past 22 years, and is the publisher of the blogs Tics en Sanidad (IT Systems in Healthcare) and Camino al Futuro (The Path to the Future), for which he has won a prize from SEIS for “Work to promote the implementation of Information and Communication Technologies in Healthcare.”

I wish to explore whether the right kind of investment is being made in the field of healthcare information technology. There are many different ways to approach the issue, but I will focus on one: ROI, or Return on Investment. In order to do this, I am going to relate a personal experience and the conclusions I have drawn from it.

At the American HIMSS congress, a conference was held which was intriguingly entitled the “The Story of the Successful Implementation of an Electronic Health Record; Five Years’ Experience.” I attended along with a colleague, but when the speaker arrived we were confused, thinking that we had got the wrong room, as the person speaking was the Financial Director of a North American hospital chain of thirteen hospitals.

We checked the program and it was indeed the correct conference. The stand out points we took away from his forty minute speech were as follows: The organization’s objective was to make savings of 45 million US dollars over five years. So they chose a packaged information technology system and created a managerial committee to which a member of the financial department was assigned to help with the economic management. Of course, the committee also had representatives from different clinical and technical areas.

During the conclusion of his speech the finance manager presented the final balance of the project, which, it turned out, had saved 65 million US dollars rather than 45. Examining the accounts we noticed that a portion of the expenses was allocated to a one-time bonus for every health professional who could show everyday proficiency in EHR use and that 20% of the total costs were allocated to training (during questions he explained that on average 150 people worked in this area throughout the project with highs of up to 500).

My conclusions, apart from the fact that this model could quite easily be extrapolated to our countries in Europe and Latin America, are:

The project included objectives and a measurement instrument with which to monitor their progress. There was corporate willingness to make the project a success. Resources were allocated to managing this success. The project included positive incentives (economic). And it also included support mechanisms to facilitate the task (training).

It would be easy to say that there are no valid packaged solutions available in Spain (which is arguable), that it’s not easy to motivate public institutions, that here staff are permanent and don’t need so much training and that the objectives here are related to service rather than economic (?)...

But let’s not get lost in the details. How many projects start out with clear objectives and pre-defined monitoring mechanisms? How many projects have timetables which are not manipulated for political reasons? How many projects have a stable and multidisciplinary managerial committee? How many projects have a budget for training which is not merely symbolic and only allocated initially? How many projects include incentive plans?

Some of them possess some of these features, but I won’t mention the ones I know about for fear of being unfair on others which have passed me by. That’s why I am leaving the comments section open for discussion so that those who are aware of successful examples and wish to share them can do so.