It’s all very well talking about automation and care coordination, but how do you show the business case and make sure the benefits promised result in a positive Return on Investment? Here are six steps to help you write a business case for automating care coordination.
State the challenge and opportunity
To write a business case for automation of care coordination, we need to start by precisely articulating the challenge we want to address. Since care coordination spans the whole breadth of a care journey, we need to identify what parts we focus on: from wellness to acute, recurrent, long-term, and chronic. Examples might include:
- Preventative health
- Pre-appointment readiness
- In-patient acute care
- Post-acute follow-up
- Preoperative readiness
- Post-operative recovery
- Hospital readmissions
- Care transition management
- Rehabilitation care
- Hospital at home
- Chronic disease management
Once we have defined the care area, we must define the scenario/s we wish to solve. An example to help illustrate how to write a scenario follows:
“Hospital Readmissions Reduction Program (HRRP) is a Medicare value-based purchasing program that encourages hospitals to improve communication and care coordination to engage patients and caregivers in better discharge plans and, in turn, reduce avoidable readmissions. The excess readmission ratio (ERR) assesses hospital performance across six conditions and procedures. Our hospital has an elevated ERR at X% at a total cost of $YM per year.”
Since we have clearly defined the problem, we can now define the opportunity or, in other words, the goal we wish to achieve.
A dollar-cost reduction or saving is required for an ROI calculation, but an opportunity may also be an improvement in a quality measure or employee retention.
“By automating care coordination, our organization has a significant opportunity to help address our nursing staffing shortage while reducing our excess readmission rate (ERR) by up to Z%, while also reducing the cost of managing each readmission from $A to $B. The result is a total potential annual saving of $C millions.”
List potential solutions
There are a variety of potential solutions to automate care coordination. List out your top candidates and perform a SWOT analysis:
- Staff augmentation – adding more nursing staff into the equation will likely have been crossed off the list as an expensive approach that does not bring the benefits of automation.
- Journey and workflow mapping – hiring an expert consultant to map out your current processes and define optimally automated processes is an excellent precursor to deploying a long-term solution.
- Care coordination products – a short-term approach might be finding an off-the-shelf software product that provides a user interface to present each patient’s journey map, status, and workflow. This approach is often a quick fix and dead-end, with limited ability to tailor automation to your organization’s work. It will ultimately limit the ability to address many care coordination use cases and automate care in the unique way your organization works.
- EHR workflow – an organization may be tempted to enhance and customize EHR workflow – since that comes for free, right? Well, no. Nothing is for free. Suboptimal, fragmented workflows are a common occurrence in EHRs due to their lack of ability to customize care as a longitudinal process, inability to complete tasks autonomously, and lack of a care plan personalized to the needs of individual patients.
- Care orchestration platform – for those who want to automate care the way they already deliver it without introducing significant workflow changes. A platform approach tailors care coordination to the needs of individual patients; it allows us to start with simple use cases, providing the flexibility to evolve to automate care coordination across many corporate functions.
The four core benefits of automated care coordination are as follows, each with their dollar equivalent metric:
1. Lower operating costs by automating tasks, activities, and workflow, enabling care coordination efforts to scale. The simplest way to measure this is through freeing up staff capacity or labor hours.
2. Improve outcomes by eliminating gaps in care and variability in delivery. Measure the improvement in terms of reduction in wasteful activity, such as reduced imaging, tests, and other order sets, reallocation of physical real estate, improvement in readmission rates, reduction in penalties, or increased reimbursement.
3. Enhance the clinician experience by eliminating redundant, manual tasks, elevating clinicians to operate at the top of their license, and enabling them to spend more quality time with patients. This more qualitative measure can be quantified in terms of clinician satisfaction at work and employee attrition rate, reducing training, hiring, outsourcing, and sick leave costs.
4. Improve the patient experience by orchestrating decisions and engagement, empowering patients to become active participants in their care. Another more qualitative measure is patient churn and the ability to increase the average duration of a patient care activity and engagement, avoiding them leaking to a competitor. We can quantify this as the patient’s total lifetime value by disease state. However, today this kind of measure is infrequently used.
A simple way to think about your investment costs would be to total the investment required over a given period for the following types of items:
- Vendor process optimization services
- Vendor platform software licenses
- Vendor deployment and EHR integration costs
- Health system’s IT support services
- Health systems vendor project management and acquisition costs
Calculate your simple ROI
Before calculating this ROI, it is essential to understand that your first automated care coordination scenario is one of many. We will eventually deploy several or many automation methods, and each additional one will provide compounding returns on investment, i.e., create a higher overall return. Further, initial assets and investments, such as EHR integration costs, can now be amortized over many scenarios, not just one, introducing scales of economy.
Now calculate your ROI. A simple way to do this is using commonly available formulas such as on Investopedia.com:
“ROI is calculated by subtracting the initial value of the investment from the final value of the investment (which equals the net return), then dividing this new number (the net return) by the cost of the investment, and, finally, multiplying it by 100.”
In other words, if by automating care coordination, we can reduce labor costs from $10,000,000 to $8,000,000 in the first year and the investment to achieve it costs $350,000 over the same period, then my one-year ROI is 571%.
Identify the process for change
Every health system will have its evaluation process, budget holders, decision influencers and makers, committees, forms and documentation, approvals, and technology risk office. Get to know all these aspects intimately, so you can drive the process and efficiently step through the hurdles with no surprises.
That’s it! You have everything you need. Good luck with your care coordination automation ROI model, and please let us know how we can help.