Finances




Strategic Investments

Implementing the
New Vision of Technology will require strategic investments by all constituencies. The EMR will cost tens of millions of dollars. Establishing the CCRC and the Informatics Program will require seed investments. The basic research enterprise is poised to make strategic investments in the reseach enterprise.

Viewing the investments as stategic will help:
  1. establish commitments over multiple years
  2. enlist commitments from multiple constituencies
  3. encourage collaborative planning and implementation
  4. create new budgeting procedures supporting the strategy
  5. impress the importance of the projects upon all involved
Coordinated Investments

Managing the money will be a critical element for the success of the proposed
CCRC. Each of the CCRC constituents will benefit if investments can be coordinated. This will require a governance that includes budgeting guidelines and approval processes that include, at some level, coordination between constituents. While this may impose some delay and even restrictions, the added value should exceed these downside issues. Each constituent would be expected to enforce the budget rules within their domain.

Sources of Funds

The proposed
CCRC has many spokes. Budgeting must involve contributions from each, according to their use of resources. Each entity must also pay a prorated share of the expenses related to shared resources.

It is expected that CCRC revenues will come from:
  1. CCRC itself
  2. CMH
  3. Practice Plans
  4. Academic Programs
  5. CMIER
  6. Children's Memorial Foundation:


Return on Investments

The
Business Case for Technology is discussed elsewhere. The changes being proposed are at the level of the customer where the return on investment (ROI) is generally much more favorable. For instance, the PTTF evaluated the ROI on implementing Epic's Resolute billing package. The results were very favorable for PFF, with a financial payback within several months. The example shown for Paper vs Electrons illustrates, in part, the return from digital imaging; not show is the personnel cost reduction resulting from the efficiencies of digital images. There are many common customer service functions that will receive significant improvements and cost reduction with the introduction of Epic's MyChart. There are other returns that are difficult to measure. Malpractice insurance companies are now reducing premiums when an EMR is introduced. The reduced actuarial risk has yet to be proven, but is anticipated by industry experts.

The Cost of Change

Change is a time consuming process. In budgeting, the accounting must recognize that personnel will be diverted from their regular productivity. In the case of PFF, this will involved lost revenue. Some physicians will devote a significant effort to the design phase of the Epic rollout. All physicians will experience an initial decrease in efficiency as they learn new methods of recording medical information. There is a hurdle to get over in populating the EMR with information before the benefits are realized. Staff at all levels will require education and training using the new technology tools. Public relations and marketing must be produced and directed at internal and external audiences. There will be costs of converting old data sources (paper and electronic) into a state compatible with the new technology. For a while, two systems might be required.