Assessing and Achieving Value in Health Care Information Systems

Report
Chapter 15
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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To be able to discuss the nature of IT-enabled
value.
To review the components of the IT project
proposal.
To be able to understand steps to improve IT
project value realization.
To be able to discuss why IT investments can
fail to deliver returns.
To review factors that challenge the realization
of IT value.
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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The definition of IT-enabled value
The IT project proposal
Steps to improve value realization
Wht IT investments may fail to deliver returns
Analyses of the IT value challenge
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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Is both tangible and intangible
Can be significant
Can be diverse across IT proposals
Can be diverse within one proposal
Appropriate analysis techniques depend on the
nature of the value
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
Strategic Considerations
Intangibles
Competitive Advantage
Service to Society
Job Enrichment
Quality Improvement
Improve Customer
Relationships
Enhance Confidence
Securing Future Business
Risk of Not Investing in IT
Teamwork
Good Image
Strategic Objectives of
Investment in IT,
Support for Corporate
Strategy,
Top Management
Support
Competitive Performance
Objectives,
Long-term Costs and
Benefits.
Tactical Considerations
Performance Indicators
Generating Data
Evaluation Methods
Security
Involvement of Senior
Managers
Operational
Considerations
Existing IT Systems
Data Migration
Software
Users Perceptions
Servers
Systems Integration
Existing Operations
System
Tangibles Considerations
Financial
Justification of
Investment in IT
Projects
Budgets
Priority of Investment
ROI
Product Cost
Market Research
Alternate Technology
Profit Level
Revenue
Non-Financial
Lead-time
Inventory
Labour Absence
Defective rate of Products
Set-up Time
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Tangible (can be expressed in terms of money)
 Increased revenue
 Reduced labor costs
 Reduced utilization of ancillary services
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Tangible (can be measured in terms of process
improvements)
 Fewer errors
 Faster turnaround
 Reduced time to get an appointment
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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Tangible (can be measured in terms of
strategic importance)
 Growth in market share
 Reduced turnover
 Improved patient satisfaction
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Intangible
 Improved decision making
 Improved collaboration
 Increased agility
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
Type of Value
Infrastructure
Improvements
Type of Analyses
Ability to meet
organizational goals, e.g.,
agility
Mandated
Least expensive approach
Cost reduction
ROI/NPV
New products and
services
ROI/NPV and sensitivity
analyses
Quality improvement
Change in service
measures
Major strategic initiative All of the above and
management “hunches”
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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The proposal is the cornerstone of the IT value
examination
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Defines intended value
Presents application
Reviews related changes, e.g., process re-engineering
Reviews costs
Sources of value information
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Consultants
Conferences
Colleagues
Publications
Vendors
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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Fractions of effort
Reliance on complex behavior
Unwarranted optimism
Shaky extrapolations
Phantom square feet
Underestimating the effort
Fairy-tale savings
Failure to account for post implementation
costs
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
Popular Estimation Methods
Popular Estimation Methods
Off-the-cuff estimation
Using expert judgment
Wide-band Delphi
Cocomo II
Better estimation Methods
Estimation by analogy
Decomposition
Proxy-based estimation
Function point estimation
The PERT Formula
Putnam’s Method
The Function Point method was selected for illustration, since it can
be used during a feasibility study before most design and
infrastructure decisions are made.
Function point estimation
measurement parameter
count
weighting factor
simple avg. complex
number of user inputs
X
3
4
6
=
number of user outputs
X
4
5
7
=
number of user inquiries
X
3
4
6
=
number of files
X
7
10
15
=
number of ext.interfaces
X
5
7
10
=
count-total
complexity multiplier
function points
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Make sure that the homework was done
Require formal project proposals
Increase accountability for investment results
Conduct post implementation audits
Celebrate value achievement
Leverage organizational governance
Shorten the deliverables cycle
Benchmark value
Communicate value
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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Fails to clearly link IT investments and
organizational strategy
Asks the wrong question
Conducts the wrong analysis
Does not state its investment goals
Does not manage outcomes
Leaps to an inappropriate solution
Mangles the project management
Fails to learn from studies of IT effectiveness
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
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What are the steps and investments, including IT, that
we need to take in order to achieve our goals?
Which “business” manager owns the achievement of
these goals? Do they have our confidence?
Do the costs, risk and timeframe for the
implementation of the set of investments, including
the IT investment, seem appropriate given our goals?
Have we assessed the tradeoffs and opportunity
costs?
Are we comfortable with our ability to execute?
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
Days in A/R
100.0
90.0
80.0
70.0
60.0
50.0
Days in A/R
40.0
30.0
20.0
10.0
Qtr 3-96
Qtr 4-96
Qtr 1-97
Qtr 2-97
Qtr 3-97
Qtr 4-97
Qtr 1-98
Qtr 2-98
Qtr 3-98
Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Qtr 4-98
Wager ~ Lee ~ Glaser
Innovation in business practices
Economic value results from incremental
innovations rather than “big bang” initiatives
 Strategic value results from the cumulative
effect of sustained initiatives to innovate
business practices
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Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser
IT value is complex, multi-faceted and diverse
The project proposal is a core means for
assessing value
 There are many factors that can dilute value
 There are steps that can be taken to improve
the achievement of IT value
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Health Care Information Systems: A Practical Approach for Health Care Management 2nd Edition
Wager ~ Lee ~ Glaser

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