Development and Implementation of a Healthcare-Based Economic Evaluation Methodology
Heather Woodward Hagg
Purdue College of Technology
Affiliated Researcher, IUPUI
Associate Professor, IUPUI
The Regenstrief Center for Healthcare Engineering at Purdue University has developed and implemented a methodology for standardized evaluation for financial impact of operational and patient care improvements as part of a statewide Lean Healthcare Program. The methodology includes an Excel based ROI tool and training exercise that will also be demonstrated/presented.
Ultimately, the successful implementation of optimization and continuous improvement initiatives necessary to promote efficient, patient-centric care within a healthcare organization is dependent on management support. Healthcare administrators will not recognize and support improvement efforts until these efforts can be directly linked to financial improvements within their organizations. The process of linking quality initiatives to financial results has been termed building the business case for quality improvements within healthcare.
The Regenstrief Center for Healthcare Engineering (RCHE) at Purdue University has developed and implemented a Lean Healthcare Training Program that has been administered in 20 Indiana Hospitals over the last 3 years.. As a part of this program, we have developed and implemented a methodology for standardized evaluation of the financial impact of operational and patient care improvement projects. This methodology includes an Excel based Return on Investment (ROI) Tool and training exercise that is used to enable project leaders to appropriately quantify potential project ROI prior to project implementation and validate ROI following implementation. To date, this methodology has successfully been used within 20 hospitals and over 36 projects to provide financial evaluation of patient care and operational improvement projects.