Return on investment for a computerized physician order entry system

Abstract

Objective: Although computerized physician order entry (CPOE) may decrease errors and improve quality, hospital adoption has been slow. The high costs and limited data on financial benefits of CPOE systems are a major barrier to adoption. The authors assessed the costs and financial benefits of the CPOE system at Brigham and Women's Hospital over ten years.

Design: Cost and benefit estimates of a hospital CPOE system at Brigham and Women's Hospital (BWH), a 720-adult bed, tertiary care, academic hospital in Boston.

Measurements: Institutional experts provided data about the costs of the CPOE system. Benefits were determined from published studies of the BWH CPOE system, interviews with hospital experts, and relevant internal documents. Net overall savings to the institution and operating budget savings were determined. All data are presented as value figures represented in 2002 dollars.

Results: Between 1993 and 2002, the BWH spent $11.8 million to develop, implement, and operate CPOE. Over ten years, the system saved BWH $28.5 million for cumulative net savings of $16.7 million and net operating budget savings of $9.5 million given the institutional 80% prospective reimbursement rate. The CPOE system elements that resulted in the greatest cumulative savings were renal dosing guidance, nursing time utilization, specific drug guidance, and adverse drug event prevention. The CPOE system at BWH has resulted in substantial savings, including operating budget savings, to the institution over ten years.

Conclusion: Other hospitals may be able to save money and improve patient safety by investing in CPOE systems.

Figure 1.

The net cumulative present value of computerized physician order entry (CPOE) at Brigham and Women's Hospital (BWH) from 1992 to 2002 given an 80% prospective reimbursement rate. Six years after the implementation of CPOE, in 1998, BWH began to make a net profit from the CPOE system. This net profit continues to grow steeply. In 1999, 7.5 years after the implementation of CPOE, a financial benefit accrued in the operating budget.