Healthcare Tracking System

Healthcare Tracking System

Overview

Management of health records poses challenges to the healthcare system in numerous hospitals. This occurs due to the need to provide timely information to case managers, disease managers, and the support departments within the value chain. As such an integrated hospital management system should bring onboard activities taking place in various hospital branches as it integrates the case management data at every level, cost implication and support desired to manage every condition including chronic ones such as diabetes. Such a system integrates the physician, hospitals, available health plans, and pharmacies to help improve the medical management strategies, communication, continued care and lower the cost of healthcare to patients (Chen, Jarrell, Carpenter, Cohen, & Huang, 2019).

Therefore the system should seek to improve compliance of the patients regardless of their location to attain the desired health outcome within a short frame of time. The need to develop such a system compels the hospital to relocate from the existing semi-integrated system that is complemented with a manual system that has created loopholes in both case management and billing. The hospital has to procure the new Electronic Health System (EHS) that integrates performance indicators for all stakeholders in the value chain. However, the decision criteria have to be made in line with several options namely having an inbuilt system, having a service provision contract with providers, leasing versus buy decision (Li, et al,2020). The decision criterion adopted is evaluated on the impact of revenue, ability to reduce costs, and the prevalent capital budgeting framework.

Leasing the EHS System

The current system fails to include physicians’ offices in the system. Assuming the organization lacks the prerequisite cash to install or meet the costs involved in the implementation of EHR that meets the objectives leasing is the best option. The lease allows the hospital to make monthly payments within its budget. Leasing has several options such as finance leases, true leases, and operating leases. In the finance lease, the hospital makes monthly payments for a particular period as indicated in the lease agreement. Upon the expiry of the lease, the hospital can purchase the EHR, return the system upon expiry of the lease or negotiate for an extended lease (Chen, Jarrell, Carpenter, Cohen, & Huang, 2019). True lease compels the health facility to pay monthly fees to use the system but has no option for ownership. Thus in the true lease the hospital rent the software and payments are lower than finance leases. The operating leases encompass technological devices that can wear down or become obsolete over time and use short-term leases. In the current scenario, the hospital has an operational information technology department implying it needs to hire only a bigger server or computer equipment making the operating lease ideal. Leasing of the EHR equipment is tax-deductible hence reducing the cost or expenses accruing to the hospital. Moreover, the cost of training personnel, leasing the equipment software development, and maintenance is included in the monthly payments are much lower than owning the equipment.

Owning the EHS System

Owning the EHS system can take two forms namely on-premise hosting and cloud-based hosting. The on-premise hosting entails the health facility having a system that owns the servers. Thus the health facility has to purchase the perpetual license that involves large upfront costs. The entity assumes the responsibility of managing the back-office technology that includes EHS products, heavy-duty servers, data backup, and storage. In the cloud-based approach, the client data is stored on the supplier’s servers and they access it through the internet (Pylypchuk, Meyerhoefer, Encinosa, & Searcy, 2022). The vendor pays a monthly or annual subscription fee and upfront costs that are usually less than the amount paid in hosting it on-premises. The organization will not need money for extra servers, storage, data reserves, and security. However, the health facility is limited on the number of employees that can access the software. Otherwise, the organization pays higher monthly fees if the number of employees grows.

Evaluating the decision

Internal Rate of Return (IRR) refers to the discount rate or interest rate that projects need to break even based on the initial investment. IRR is not suitable for projects that have fluctuating cash flows and those requiring additional investments of capital since they result in different IRR values. The project is considered feasible if the IRR value is higher than the discount rate. Thus Net Present value (NPV) will be ideal for projects whose discount rate is unknown or have fluctuating cash flows. Any project with NPV above zero is considered a worthy investment. In the ownership decision, the cloud-based ownership will not be suitable to use IRR due to the additional costs involved in case the business hires more employees due to additional costs involved but NPV will be ideal (Lopez-Cano, & Morales-Conde, 2020). In leasing situations, the determined monthly payments in the life of the lease make the decision feasible using both methods of capital budgeting. Also, the leasing options eliminates the potential for revenue fluctuations since the hospital will benefit more from an installed system that helps track finances and improved health outcome. However, on-premise owning entails huge capital investment that may affect cash flow if it was procured through a loan due to varied economic factors such as interest rate.

References

Chen, H. S., Jarrell, J. T., Carpenter, K. A., Cohen, D. S., & Huang, X. (2019). Blockchain in healthcare: a patient-centered model. Biomedical journal of scientific & technical research, 20(3), 15017.

Li, Y., Rao, S., Solares, J. R. A., Hassaine, A., Ramakrishnan, R., Canoy, D., … & Salimi-Khorshidi, G. (2020). BEHRT: transformer for electronic health records. Scientific reports, 10(1), 1-12.

Lopez-Cano, M., & Morales-Conde, S. (2020). Time to be online or time to be present?—Time to join forces. Hernia, 24(6), 1407-1408.

Pylypchuk, Y., Meyerhoefer, C. D., Encinosa, W., & Searcy, T. (2022). The role of electronic health record developers in-hospital patient sharing. Journal of the American Medical Informatics Association, 29(3), 435-442.