Reference no: EM134006978

Scenario

Dynamic Health System is a 3-hospital, 500-bed system in the Midwest United States. This system employs 100 physicians, both primary care and specialists, in 12 physician practices. Dynamic also runs a center of excellence in orthopedic care for the large geriatric population in the area, including an outpatient rehabilitation facility that is currently profitable. Dynamic's typical patient mix is over 45% Medicare with another 35% private pay patients covered by three large insurance companies. Their Medicaid population is approximately 12%, with the reminder of patients self-pay. The CFO is supportive but skeptical, as the Epic bid is approximately $1.5 M to implement the clinical software with a continued $300K per year in software maintenance and support. Current clinical technologies information systems are fragmented, disjointed, and don't meet HITECH Meaningful Use requirements, and it will cost Dynamic about $200K per year to maintain the software and servers needed to run the system.

Explain how the organization will save in operational expense in order to handle the extra 100K per year needed to maintain this solution. Provide a recommendation for how the hospital can use HIT solutions to generate new revenue. Also consider that if Dynamic issues a bond to pay for the $1.5 million implementation costs, likely the local rating agencies will want to see a documented 5-10% additional reduction in "hard line" operating expenses to assure Dynamic's ability to pay off the debt. Given that over 60% of the operating budget is staff and physician salaries, explain what kinds of savings the best in class EHR offer will assure investors.