Assignment relates to cost benefit analysis applications in healthcare
This week’s assignment relates to cost benefit analysis applications in healthcare. You will need to calculate a ROI based on the following information:
Assignment relates to cost benefit analysis applications in healthcare
Weekly Assignment
This week’s assignment relates to cost benefit analysis applications in healthcare. You will need to calculate a ROI based on the following information:
Assume that the costs associated with the purchase of EHR software are as follows:
Purchase price: $25,000 per provider
One time implementation fee: $10,000 per provider
Annual maintenance fee: 18% of the purchase price applied after the first year
Estimate the ROI (%) at the end of five years for a group of 15 providers.
Assume that the only monetary benefit considered is that each physician will earn $44,000 as incentive.
More Details:
Jules Dupuit, a French engineer and economist, introduced the concepts behind CBA in the 1840s.
It became popular in the 1950s as a simple way of weighing up project costs and benefits, to determine whether to go ahead with a project.
As its name suggests, Cost-Benefit Analysis involves adding up the benefits of a course of action, and then comparing these with the costs associated with it.
The results of the analysis are often expressed as a payback period – this is the time it takes for benefits to repay costs.
You can use the technique in a wide variety of situations. For example, when you are:
Also, deciding whether to hire new team members.
More so, evaluating a new project or change initiative.
Determining the feasibility of a capital purchase.
However, bear in mind that it is best for making quick and simple financial decisions. More robust approaches are commonly used for more complex, business-critical or high cost decisions.
First, take time to brainstorm all of the costs associated with the project, and make a list of these.