Cost-Benefit Analysis of Electronic Medical Record System at a Tertiary Care Hospital.
10.4258/hir.2013.19.3.205
- Author:
Jong Soo CHOI
1
;
Woo Baik LEE
;
Poong Lyul RHEE
Author Information
1. Department of Information Strategy, Samsung Medical Center, Seoul, Korea.
- Publication Type:Original Article
- Keywords:
Electronic Medical Record;
Cost-Benefit Analysis;
Benefit-Cost Ratio;
Net Present Value;
Payback Period
- MeSH:
Adoption;
Cost-Benefit Analysis;
Electronic Health Records;
Electronics;
Electrons;
Hospitals, General;
Humans;
Investments;
Korea;
Outpatients;
Tertiary Healthcare
- From:Healthcare Informatics Research
2013;19(3):205-214
- CountryRepublic of Korea
- Language:English
-
Abstract:
OBJECTIVES: Although Electronic Medical Record (EMR) systems provide various benefits, there are both advantages and disadvantages regarding its cost-effectiveness. This study analyzed the economic effects of EMR systems using a cost-benefit analysis based on the differential costs of managerial accounting. METHODS: Samsung Medical Center (SMC) is a general hospital in Korea that developed an EMR system for outpatients from 2006 to 2008. This study measured the total costs and benefits during an 8-year period after EMR adoption. The costs include the system costs of building the EMR and the costs incurred in smoothing its adoption. The benefits included cost reductions after its adoption and additional revenues from both remodeling of paper-chart storage areas and medical transcriptionists' contribution. The measured amounts were discounted by SMC's expected interest rate to calculate the net present value (NPV), benefit-cost ratio (BCR), and discounted payback period (DPP). RESULTS: During the analysis period, the cumulative NPV and the BCR were US$3,617 thousand and 1.23, respectively. The DPP was about 6.18 years. CONCLUSIONS: Although the adoption of an EMR resulted in overall growth in administrative costs, it is cost-effective since the cumulative NPV was positive. The positive NPV was attributed to both cost reductions and additional revenues. EMR adoption is not so attractive to management in that the DPP is longer than 5 years at 6.18 and the BCR is near 1 at 1.23. However, an EMR is a worthwhile investment, seeing that this study did not include any qualitative benefits and that the paper-chart system was cost-centric.
