My course is Finance for Healthcare.
Activity: – Understanding Return on Investment
Background: – The Board of Trustees at Harris Memorial Hospital and Harris Community Foundation have engaged the Certified Public Accounting Firm of Pennypacker and Vandelay, LLC to provide a series of educational presentations to the Board for purposes of assisting them in performing a Return On Investment (ROI) analysis of a capital purchase of Electronic Health Records. The managing partner of the accounting firm has asked you as a Health Service Manager with the firm to manage the engagement.
About the Engagement:
The final paper/project challenges participants in the course (Health Service Manager with Pennypacker and Vandelay) to design an educational/financial strategy for presentation to the Harris Memorial Hospital and Harris Community Foundation Board of Trustees addressing the components of a ROI analysis. The project is to be worked on in phases throughout the semester in the form of short paper presentations. The final paper (Phase 6) is set at 2,000 words, approximately 8 pages of content. Each presentation will consist of an introduction to the Board and an overview of the selected topic and will be supported by three citations/references in APA format based on the outline below:
Phase 2 Assignment:
The assignment this week will be the second short paper on Return on investment with a focus on the steps recommended for building the documentation for the justification of a “soft return” (Soft costs include risk avoidance, client goodwill, patient safety, process improvement, and regulatory compliance and support costs) and the gathering of metrics with the intention of estimating the financial benefits expected from the project.
There are three steps in documenting soft returns, which are identifying a process improvement opportunity, create a formula to calculate the benefits, and determine the costs of the process and the net benefits. Soft costs include risk avoidance, client goodwill, and support costs.
Many projects in healthcare today require large outlays of capital for electronic health records, clinical information systems whose return on investment is not easily documented with new revenues and operating expenses but from a quality standpoint are wanted and needed.
In your research, consider what would be needed to support a capital acquisition that would improve efficiency, quality, customer satisfaction, and overall effectiveness within the organization. Also, would a project management office establishment be of any assistance in monitoring the project?Phase 2 Assignment:
The assignment this week will be the second short paper on Return on investment with a focus on the steps recommended for building the documentation for the justification of a “soft return” (Soft costs include risk avoidance, client goodwill, patient safety, process improvement, and regulatory compliance and support costs) and the gathering of metrics with the intention of estimating the financial benefits expected from the project.
There are three steps in documenting soft returns, which are identifying a process improvement opportunity, create a formula to calculate the benefits, and determine the costs of the process and the net benefits. Soft costs include risk avoidance, client goodwill, and support costs.
Many projects in healthcare today require large outlays of capital for electronic health records, clinical information systems whose return on investment is not easily documented with new revenues and operating expenses but from a quality standpoint are wanted and needed.
In your research, consider what would be needed to support a capital acquisition that would improve efficiency, quality, customer satisfaction, and overall effectiveness within the organization. Also, would a project management office establishment be of any assistance in monitoring the project.
Please read my Phase one.
My Understanding Return on Investment (ROI) – Phase 1
Hello, ladies and gentlemen. My name is (………….). I work as a Health Administration Services Manager with the well-known accounting firm, Pennypacker and Vandelay, Welcome to the first phase of my six presentations. The topic I will be presenting on is Return on Investment (ROI). This will involve an overview and how it impacts Electronic Health Records at Harris Memorial Hospital and the Harris Community Foundation. Shall we get started?
Overview
ROI is a metric that organizations use to measure their financial gain, return or loss form an investment. ROI applies by comparing the amount of money the company invests and the amount of money it gains/saves from the program. Value added Investment and Return on invest are now clearly applied by many companies. ROI is measured by monetary metrics while you VOI is measurement of a multitude of metrics.
History
The DuPont innovation of ROI calculations acts as one of the most significant turning points in modern accounting and management. DuPont integrated financial accounting, capital accounting, and cost accounting as early as the 1920’s. For instance, DuPont measured its assets at their gross book value as opposed to net book value which became the identity of DuPont. The basic ROI formula is: Net Profit / Total Investment * 100 = ROI. What makes DuPont ROI calculations effective is that it focuses on net return rather than net profits. This applies in instances where one wants to measure how the division manager uses the property of the company to generate profits.
The Role of ROI on Electronic Health Records (EHR)
As we all know Electronic Health Records (EHR) use both ROI and VOI metrics. Return on investment and value on investment involves measurement of outcomes. Measurement of investment is an important metric in measuring of VOI and ROI. The benefit of EHR programs is usually measurable in a tangible way. Return on investment is a metric which is used in measurement of financial gain in EHR programs. The metric checks return or loss from investment.
There is a comparison on the amount of money that is invested in a program and the amount of money gained. VOI on the other hand is a measure of gains in a different way than ROI. Value on investments addresses tangible and intangible benefits that come from wellness programs. The specific issues analyzed by the metric include the health impact on the overall health of employees and the level of job satisfaction among employees
ROI and VOI have both advantages and disadvantages depending on the application. The main advantage of using value on investment is that it analyzes both tangible and intangible gains unlike ROI which just focuses on returns on investment. ROI is on the other hand more specific than value on investment metrics. Another advantage of VOI is that it takes a shorter period of time.
Hard analysis
Hard analysis involves measurements that are easy to quantify and have a great possibility of leading to success. In the case of Harris Memorial Hospital and the Harris Community Foundation., a training analysis will lead to identification of gaps that need to be addressed. The training strategy in this case involves provision of job aids, coaching of employees, and leadership training to ensure that there is effective succession planning.
Soft analysis
Soft analysis in the other hand incorporates measurements that are not easy to quantify with immediate financial goals. There are potential challenges that the managers and owners of the business in this case could face while addressing organizational performance. The challenges in this case include communication problems, inadequate tools, lack of funds and even issues such as organizational conflict. Detecting organizational gaps in small businesses is important in making them focus on capitalizing on strengths and addressing weaknesses. The potential return on investment (ROI) that will be gained from the strategy developed in this case is an essential justification.
Conclusion
Despite ROI being used widely, I feel that the ROI system has certain limitations in it. One is that it causes incongruities between divisional objectives and company goals, which result in motivating division managers to take uneconomic actions. Despite this ROI system is versatile enough to be used to evaluate the efficiency.
Does anyone have a question?
Thank you for participating in my Phase 1 presentation and I will see you again in my Phase 2 presentation.
Reference
Miller, S. (2015). Metrics beyond ROI can capture wellness outcomes. Retrieved from https://www.shrm.org/hrdisciplines/benefits/Articl…
Schaefer, J. (2016, June 9). The Real ROI for Employee Wellness Programs. Retrieved from Corporate Wellness Magazine.com: http://www.corporatewellnessmagazine.com/column/th…
Swanson, R. (2009).Analysis for Improving Performance: Tools for Diagnosing Organizations and Documenting Workplace Expertise . New York: ReadHowYouWant
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Please look at my friend work then start this work (( please don’t copy )). I show you how my friend did his work.
classmate work Phase 2
Good morning, to all the leaders of the Happy Hospital and thank you for being a part of
this second presentation. I am (……………….), Health Service Manager of the accounting
firm at Pennypacker and Vandelay. LLC. Today, I will continue to elaborate on phase I in my
presentation by discussing phase 2. However, before I continue today’s phase II presentation, I
would like to give a brief overview of my last Phase I presentation about Return On Investment
and its benefits to Electronic Health Records. Every business must plan a means to make and
measure the profit gained from an investment because profit reflects the very nature of any
business. Failure of it will lead to bankruptcy. It might be true that the mere existence of profit
in itself does not guarantee the business to survive but the concept of “Return on Investment”
provides a means to measure the profit obtained from an investment. Also, I explained the two
type analysis of ROI: Soft and Hard returns. Both analysis work side by side, even though their
impact for gaining profit/cash flow, in an organization is different.
Before I continue the discussion on phase II, are there any questions about my overview of Phase
I?
Phase II focuses on ROI with a focus mostly on the steps recommended for building the
documentation for the justification of a “soft return” (soft costs include risk avoidance, client
goodwill, patient safety, process improvement, and regulatory compliance and support costs) and
the gathering of metrics with the intention of estimating the financial benefits expected from the
project.
For hospitals and healthcare organization, EHR systems essential. It facilitates the relay
of information and providing valuable data to providers and other health care employees. It also
helps in decision-making processes simpler by incorporating evidence-based decision support.
EHR is essential to evaluate the soft return by gathering documentation and metrics to justify it.
Perhaps the most essential factor in ensuring a strong ROI is to keep the “soft costs” associated
with training and implementation from leaching away financial gains. Many “soft costs” items
are transformative and are a vital component of the mission of healthcare organizations such as
risk avoidance, client goodwill, patient safety, process improvement, regulatory compliance, and
support costs.
With growth the responsibility to document soft returns comes, identifying a process
improvement opportunity, creating a formula to calculate the benefits, and determining the costs
of the process and the net benefits must be considered. In an organization, one might evaluate the
soft returns from a proposed project by identifying a process improvement opportunity. For
example, a healthcare organization might see an opportunity to better protect patient records with
more passwords and limited access to patient information depending on the organization’s
clinical role. The organization would then create a formula to calculate the benefits. For this
example, we could compare the money put out to implement this project and then compare this
to the expense the hospital would endure in the event of a breach. The cost of implementing
stricter passwords worth at the most could be $5,000. If a $10,000 cost of records breached, that
is an actual cost of $7 million. The benefits would include fewer expenses, in the long run,
fewer breaches of information, better quality healthcare, and less room for medical errors. Lastly,
the organization would have to determine the cost of the process and the net benefits. In this
scenario, the cost could be estimated at $5,000 for training to let employees know their limits and
the proper way to use the system. Also, IT might need to get involved to set up a code only
allowing certain professionals access to specific information. The net benefit would be better
quality care and putting out less money in the long run if several records not breached.
Therefore, to better protect patient records IT should be implemented since it will improve
efficiency, quality, customer satisfaction, and overall effectiveness within the organization
(CFI,2019)
Financial Benefits & Capital Acquisition
While one can measure specific types of ROI, the benefits of implementing a good EHR
system far exceed the monetary rewards. Physicians around the country and in all specialties
report an improved quality of life, less medical error and less burden of regulatory. Many
projects in healthcare today require large outlays of capital for electronic health records, which
are clinical information systems whose return on investment with new revenues and operating
expenses. However, from a quality viewpoint, they are needed. Capital Acquisition is the capital
used to acquire other assets. The organization uses this capital to purchase assets like equipment,
inventory, software, or even business itself. The purposes of these acquisitions are, ultimately, to
grow the overall profits of a business. In order for a company to succeed, it needs to grow.
Growth includes acquisitions that can vary from material to equipment or even another existing
business. As relevant to business as such purchases may be extremely costly, often far beyond
what a company can afford with its funds. For example, an EHR is hugely costly but also brings
about quality initiatives. Therefore, the organization must weigh the benefits with the costs.
According to Quelch (2014), “finding acquisition capital usually requires the help of lenders and
investors interested in seeing the company reach its goals
Project Management Office (PMO)
While the benefit of EHR is remarkable, implementing a new electronic health record is
expensive and time-consuming. For these reasons, many organizations create a project
management office (PMO). PMO could be needed to support a capital acquisition that would
improve efficiency, quality, customer satisfaction, and overall effectiveness within the
organization. A Project Management Office is a group or department within a business, agency,
or enterprise that defines and maintains standards for project management within the
organization (Miller, 2017). The PMO strives to standardize and introduce economies of
repetition in the execution of projects. Therefore, a Project Management Office would be
beneficial in assisting and monitoring the process or project
Does anyone have a question about phase II? Good. Thank you for attending my phase II
presentation, and I will see you all again in my phase III presentation soon.
3 pages and different references
