Valuing health information systems
Creators: name: Patton, Gregory Alan
Publisher: name: University of Utah
Year: 2012
Subjects: Intermountain Health Care (Utah)

description: Health information systems are networks of computers employed by health care enterprises to facilitate the delivery of their health care product. Computers originally entered the medical domain solely as tools aimed at the business functions of the hospital. Having demonstrated their utility in this area, computers were perceived by certain innovators to have usefulness in the clinical domain. As clinical computer applications were successfully developed and implemented, they have over time been merged together into systems offering multiple areas of functionality directly impacting the clinical aspects of health care delivery. Such health information systems have now assumed major importance in the provision of health care in a complex medical environment. Although the focus of substantial investment for development and implementation, relatively little work has been done to assess the value of such health information systems. The business information technology literature and the medical informatics literature each include only a small number of published reports examining the value question in an incomplete manner. No generally accepted valuation strategy has been developed for information systems in either the business or health care domains.  Several valuation methods with potential applicability to health information systems have evolved: cost-effectiveness / cost- benefit analysis, return on investment, information economics, measurement systems, the Strassmann approach, the Japanese approach, and the strategic value approach. None of these valuation strategies is clearly superior; each has different strengths and weaknesses. A matrix comparing these strategies on the bases of explicitness and ease of implementation is proposed.  Intermountain Health Care (IHC) has been instrumental in the development of health  information systems and a leader in the application of such technology in clinical health care delivery. IHC's HELP system has played a seminal role as a catalyst to the development of the health information system industry. Although both historically and functionally important, detailed financial information regarding HELP'S origins and implementation no longer exists. Current IHC budget information demonstrates the major financial commitment underway within this health care enterprise totaling approximately $157 million over the last decade and with additional expenditures of $47 to $61 million projected annually through fiscal year 2004. The complex budgetary relationships between HELP and the other health information systems at LDS Hospital further obscure the magnitude of the information technology investment within this institution. Benefits of health information systems are potentially most substantial within the domain of clinical integration.  IHC has not implemented any formal valuation strategy for its health information systems, but the ad hoc measurement systems valuation approach applied to date is practical, flexible, and the most appropriate of the available systems. Adequate valuation of health information systems cannot readily be achieved given the existing traditional hierarchical accounting structure; an alternative accounting framework patterned after a relational database is proposed.