1. Introduction &
EHR Benefits Realization
David Shiple
Practice Leader, Advisory Services Prepared for:
November 27, 2012
© 2012 Divurgent. All rights reserved.
1

2. Company at a Glance
• Offices: Virginia Beach, Virginia / Dallas, Texas
• Clients include:
– Integrated Delivery Networks
– Critical Access Hospitals
– Physician Offices
– Community Hospitals
– Group Purchasing Organizations
– Healthcare Vendors
• Industry leading advisory board
• 100% Referenceable
• Clinical Resources (RN, PT, RPh, MD, NP)
• Operational Roles (CFO, COO, CMIO, CIO, CNO)
• Proven Methodology
– Vendor Selection
– Project Management
– Meaningful Use Gap Analysis
– Clinical Transformation
– Change Management
– Systems Implementation
• Practices: Advisory, Project Management, Activation
Management, Revenue Cycle, Clinical Transformation
2
© 2012 Divurgent. All rights reserved.

3. Advisory Board
Divurgent leverages an industry leading advisory board who provides consulting services and
guidance on projects
Member Title Organization
Bert Reese Sr. Vice President and Chief Information Officer Sentara HealthCare
Robert Blades Independent Consultant Independent
Ann Chinnis, MD Chief Executive Officer Matrix Executive Coaching
Eugene D’Amore Vice President and Chief Information Officer Shriner’s Hospital for Children
Cynthia Davis Technology Adoption Strategist Independent
Andy Downing Chief Executive Officer Pinpoint IT Services
Travis Gathright Chief Information Officer Magee Rehabilitation Hospital
John Gomez Chief Executive Officer JGo Labs
Richard Howe, PhD Independent Consultant Independent
Beth Lindsay-Wood Sr. Vice President and Chief Information Officer Tampa General Hospital
Braxton McKee Attorney Kaufman & Canoles
Stephanie Reel Chief Information Officer Johns Hopkins Health System
Albert Sinisi Principal Sinisi Consulting Services
Rick Skinner Vice President and Chief Information Officer Cancer Care Ontario
Bill Spooner Chief Information Officer Sharp HealthCare
Laishy Williams-Carlson Chief Information Officer Bon Secours Health System
Eric Yablonka Vice President and Chief Information Officer University of Chicago Medical Center
3
© 2011 DIVURGENT. All rights reserved.

4. Advisory Team
• Our Advisory Services team is comprised of seasoned HIT
consultants with a proud history of being trusted advisors to
CIOs
• Includes former CIOs, career consultants, subject-matter
experts, researchers, and clinicians
• Experts in IT strategy, Meaningful Use, Benefits Realization,
Infrastructure Optimization, and other challenges/
opportunities facing the CIO
• Practice credentials include Lean Sigma, Baldrige, Studer, ITIL,
and advanced degrees (MHA, MBA, MEd, etc.)
4
© 2012 DIVURGENT. All rights reserved.

5. Service Offerings
Divurgent’s Advisory Services practice provides a broad range of strategic
services to health system executives across the U.S. and Canada. Each
service domain is backed by a proven methodology and best practices
research.
• IT Strategy • Interim Leadership
• Benefits Realization • Vendor Selection
• IT Assessments • Benchmarking/ Best Practices
• Meaningful Use Studies
– Gap Analysis/ Planning • Total Cost of Ownership
– Program Management • Shared Services
• Clinical Integration • mHealth
– Virtual Integration • Retail Strategy
– HIE Planning/ Design • Consumerism
• Analytics/ Business
Intelligence
5
© 2011 DIVURGENT. All rights reserved.

6. Benefits Realization
6
© 2011 DIVURGENT. All rights reserved.

7. Executive Summary
• Hard dollar ROI on EHRs is very real, however, takes planning and diligence
to evidence the savings
• Health systems engage in benefits realization exercise for many reasons –
it is very imperative to understand the true intent of your health system
• The number of EHR benefits are almost limitless – focus on a manageable
number that are of high value and easy to evidence
• There are several types of benefits that should be documented: Hard ROI,
Soft ROI, Intangible Benefits, and Strategic Benefits
• Benefits realization exercises can become overly political, complex, and
time-consuming – using a systematic approach is required
• Operational accountability is absolutely necessary to realizing and sharing
benefits
• Expected benefits can be hardwired to organizational operations and
should be leveraged into overall organizational strategic plan
© 2012 Divurgent. All rights reserved. 7

8. EHR Benefits are Real
• 91 minute wait time reduction in the ED
• 50% improvement in ED to inpatient bed arrival
• $4.9 million savings due to adverse drug event reduction
• $7 million/ year reduction in unreimbursed cost for MRIs and other imaging
• Saved 296 hours per month by replacing manual pre-approval phone calls
• Transcription costs have decreased $170,000 or 34% since go-live
• Avg. nursing premium pay has decreased by 38%
• Measured $42.6 million in benefit in first two years after going live
• Estimated “break even” in 4-5 years
• Improved staff efficiency and reduced variation in practice
• Reduction of 65 FTEs
• Nearly $1 million in savings related to reduced length of stay in 6 months
• Now preventing 200+ infections/ year, saving $5.1 million annually
• Reduction of 47 FTEs ($2.5M)
• Administrative expense Reductions ($.6M)
• Pharmacy medication waste reductions ($2.0M)
Examples of EHR benefits – when totaled for a given health system, can add
up to real money
© 2011 DIVURGENT. All rights reserved.
8
© 2012 Divurgent. All rights reserved.

9. The Sentara Story
• Senior management
commitment from day one
• Long-time tradition of
being focused on financial
outcomes
• Process owners engaged as
soon as software
purchased
• Initial metric signup based
on industry best practices
• Bonuses built into realizing
benefits
• Redesigned 18 major
processes covering entire
continuum of care using
lean six sigma
Sentara seems to have “cracked the code” of EHR ROI
• Bi-weekly meetings to – carefully orchestrating a well-known ROI realization
ensure benefits were story
achieved
© 2012 Divurgent. All rights reserved. 9

10. Ask, and You Shall Receive
• Asking operational owners for capturing benefits is important for several reasons
– An culture of ownership begins with owning enterprise investments – and extracting the value
of those investments
– Some benefits may be difficult to attain, but if not called expected by senior management,
benefits are guaranteed not to materialize
– Will be difficult to ask operational owners for support (e.g. nursing time) if they have not truly
bought into value proposition
• A benefits realization exercise forces operational leaders to ask
– Why are we making this investment?
– What benefits do we expect to achieve? How will we measure them?
– How can we be good stewards of our health system’s investment?
• If the answer to the question “what is going to change with a new EHR?” is
“don’t know” – or “ask IT, they’re driving it”
– There’s a bigger problem at hand
– Points to a need to shift to a culture of “IT ownership”
An EHR is only a tool, albeit an expensive one – however, implemented
correctly the payoff of the tool reserved. be substantial
© 2011 DIVURGENT. All rights should
10
© 2012 Divurgent. All rights reserved.

11. Drivers of Benefits Realization
• Prior to EHR implementation a rigorous plan is required – including
process redesign – to get full benefits realization
• Evidence hard ROI offsets to the costs of the EHR
• Establish ownership and accountability necessary to realize value from the
EHR
• Demonstrate to stakeholders they achieved benefit from investing in the
EHR
• Demonstrate the broader value of the EHR (e.g. the EHR positioning the
organization for healthcare reform)
• Make the business case to a wavering stakeholder group evidencing that a
new EHR is the right thing to do
It’s important to be clear on the intent of a Benefits Realization
endeavor – the drivers (or combination of drivers) are many
© 2012 Divurgent. All rights reserved. 11

12. Typical Areas of Benefit
Source: HFM
Improved clinical outcomes Decreased cost of record storage Improved patient flow
Reduced process variation Reduced costs of data collection Reduced drug use and costs
Reduced order turnaround time Reduced redundant testing Reduced use of other resources
Increased use of preventative care Reduced payment denials Reduced lengths of stay
Improved documentation quality Improved quality of coding Nursing staff time savings
Increased direct patient care time Improved charge capture HIM workload, staff reductions
Improved Information availability Increased net revenues Pharmacist time savings
Increased patient safety Increased reimbursement Decreased cost of paper forms
Reduced ADE incidence Increased performance payments Decreased transcription costs
Reduced med error incidence Improved regulatory compliance Increased patient satisfaction
Reduced complications of care Increased patient volumes Improved physician satisfaction
Increase patient chart legibility Increased efficiency Improved staff satisfaction
Areas of potential EHR benefit are almost limitless – the “art” is
selecting the 2011 DIVURGENT. All rights reserved.measure
© right metrics to
12
© 2012 Divurgent. All rights reserved.

13. A Systematic Approach
One possible approach is to focus on the
Benefits that can be most readily evidenced
in Peer Reviewed Literature
[1]
Thompson DI, Classen DC, Haug PJ EMRs in the Fourth Stage: The Future of Electronic Medical Records Based
on the Experience at Intermountain Health Care, JHIM, Summer 2007.
© 2012 Divurgent. All rights reserved. 13

14. Follow the Money
Divurgent often recommends focusing on the high returns (and most
readily evidenced) first:
• Reducing Average Length of Stay
• Reducing Transcription Costs
• Better Documentation – Better Reimbursement
• FTE Reduction
• Reducing Readmissions
© 2012 Divurgent. All rights reserved. 14

15. Types of Benefits
Type Example Implication
Hard ROI Decrease in transcription Direct cost off-set to EHR costs; can be tied
cost directly to budgets; usually endorsed by CFO
Soft ROI Most time available for Measurable, but does directly affect bottom line
nursing at the bedside
Intangible Chart available to Very important, but can be elusive to measure –
Benefits everyone, anywhere, observe closely and benefits can be articulated;
anytime also includes benefits not even yet understood
during EHR 1.0 rollout
Strategic Ability to manage Possibly the most important – enabling the next
Benefits patients across generation business model (ACOs, “Systemness”,
continuum of care vertical integration, etc.) and other health system
strategic goals
A good Benefits Realization story after an EHR implementation includes
hard and soft ROI, and intangible and strategic benefits
© 2012 Divurgent. All rights reserved. 15

16. Linkage to HC Reform
EHR’s have a direct, measurable effect on a health system’s ability to react to
HC reform and the relentless drive for higher quality/ lower costs
• Ability to manage patients/populations longitudinally (enabling ACO’s,
risk-based arrangement, bundled payments, etc.)
• Ability to reduce readmissions
• Enabler for increasing VBP and HEDIS quality scores
• Enabler decrease hospital acquired conditions
• Driver to decrease utilization costs thru ordersets and supply chain
management
The linkage to the Healthcare Reform/ reimbursement challenges and
EHR Benefits Realization cannot be underestimated
© 2012 Divurgent. All rights reserved. 16

17. Benefits Realization Continuum
True cost offset realized -
Benefits built into validated by CFO
operational bonuses
Benefits defined w. process
transformation required
Reward
High-level benefits defined Presentation: Our hard and
- w. ownership soft ROI calculations
Presentation: We are
positioned for the future
(intangibles)
Rigorous baselining
Presentation: We were
successful
EHR’s are simply the Challenge
cost of doing business
Health systems are approaching benefits realization of EHR investments
in a variety of ways
© 2012 Divurgent. All rights reserved. 17

18. EHR BR Methodology
Realism -Setting Benefit Goals Benefits Realized
Senior Mgt
Commitment Clinical
Education / Lessons Learned
Point in EHR Journey
End-game Intent Financial
Commitment Day
Operational Model
Starter-set
Metrics Realization Rules/
Financial
Bonuses
Analytics
Alignment to Existing
Capabilities Accountability
Scorecards
Process
Redesign Needs HC Reform Enablers
Hard Soft
© 2012 Divurgent. All rights reserved. 18

19. EHR BR Methodology
• Senior management sets the cultural tone - how are EHRs viewed?
• A necessary evil?
Realism -Setting • Just Benefit Goals
a tool with no inherent value?
Benefits Realized
• An investment which should have benefits and ROI?
• Does senior management have a vision for the organization with an
EHR?
Senior Mgt
• Has senior management articulated what is expected from the EHR and
Clinical
Commitment
Education / Lessons Learned
how the organization will change with it’s EHR?
• Have bonuses been tied to EHR benefits realization?
Point in EHR Journey
End-game Intent Financial
• Has accountability for ROI been established?
Commitment Day
Operational Model
Starter-set
Metrics Realization Rules/
Financial
Bonuses
Analytics
Alignment to Existing
Capabilities Accountability
Scorecards
Process
• Redesignis your health system in this HC Reform Enablers
Where Needs EHR journey?
• Contract just signed
• Design build underway Hard Soft
• Rollout begun
• EHR is live
• EHR 1.0 is live; EHR 2.0 being planned
• Point in EHR journey has major affect on your EHR strategy
© 2012 Divurgent. All rights reserved. 19

20. EHR BR Methodology
• What is the “end-game” of your benefits realization endeavor? Is it to…
• Evidence hard ROI offsets to the costs of the EHR?
Realism -Setting Benefit Goals Benefits Realized
• Establish ownership and accountability necessary to realize value
from the EHR?
• Demonstrate to stakeholders they achieved benefit from EHR
Senior Mgt (post-live)?
Commitment Clinical
• Demonstrate the broader value of the EHR (e.g. the EHR role in
Education / Lessons Learned
healthcare reform)?
Point in EHR Journey
End-game Intent • Make the business case to a stakeholders group evidencing that a
Financial
Commitment Day
Operational thing to do?
new EHR is the right Model
Starter-set
Metrics Realization Rules/
Financial
Bonuses
Analytics
• Is there a starter set ofExistingthat can be used? e.g.
Alignment to metrics
Capabilities Accountability
• Benefits documented from similar implementations
Scorecards
• Benefits documented from the vendors or user group
Process • Metrics already used in monthly performance scorecards
Redesign Needs HC Reform Enablers
• Metrics documented in original business case
• Success metrics used by vendor (e.g. Epic KPI workbook)
Hard Soft
• Metrics from other facility go-lives
• Literature references
© 2012 Divurgent. All rights reserved. 20

21. EHR BR Methodology
Realism -Setting Benefit Goals Benefits Realized
Senior Mgt
Commitment Clinical
Education / Lessons Learned
Point in EHR Journey
End-game Intent Financial
Commitment Day
Operational Model
Starter-set
Metrics • Inventory current analytics capabilities: Realization Rules/
Financial
• Legacy EHR reporting Bonuses
Analytics • Future EHR reporting
Alignment to Existing
• Cost accounting
Capabilities Accountability
Scorecards
• Custom data warehouses
Process • Population data warehouses
Redesign Needs • What is Reform Enablers analytics group?
HC the strength of your
• Where does current monthly operations objectives reporting come
from? Hard Soft
• Manually
• Electronically
• 3rd Parties
© 2012 Divurgent. All rights reserved. 21

22. EHR BR Methodology
• Can a process redesign régime (e.g. Lean Six Sigma) be employed to
build benefits directly into software design?
• Where will review/ redesign of key processes have the most impact?
• Where has significant re-engineering already taken place? How are the
Realism -Setting Benefit Goals
benefits of the redesign been measured? Benefits Realized
• Where do targeted processes align with vendor/ business case
strengths?
Senior Mgt • How do targeted processes align with business owners?
Commitment Clinical
• Arrival Management
Education / Lessons Learned
• MD Processes
Point in EHR Journey
End-game Intent • Bed Management Financial
Commitment Day
Operational Model
• Medical Records
Starter-set • Case Management
Metrics • Meds Management Realization Rules/
Financial
• Charge Capture Bonuses
Analytics • Monitoring/Recording
Capabilities • Alignment to Existing
Claims Processing
Scorecards Accountability
• Order Sets
Process • Clinical Communications
• HC Reform Enablers
Patient Care Transformation
Redesign Needs
• Disease Management
• Patient/Member Satisfaction
Hard Soft
• Emergency Department
• Physician Practice
• Home Health
© 2012 Divurgent. All rights reserved. 22

23. EHR BR Methodology
• Gets everyone on the same page on BR endeavor
• Overview of methodology
Realism -Setting Benefit Goals building – possibly invite a speaker from
• Part momentum Benefits Realized
an EHR ROI success story (e.g. Bert Reese, Sentara)
• Case studies from other health systems – how they did it
Senior Mgt • Intent of this health system
Commitment Clinical
• Definitions : hard, soft , intangible , future enabler
Education / Lessons Learned
• Lessons learned
Point in EHR Journey
End-game Intent • Focus on a small number of “big ticket” items
Financial
Commitment Day
Operational
• Focus on what can be measured Model
Starter-set • Part “Art”, part “Science”
• Many benefits do not translate directly into money
Realization Rules/
Metrics Financial
• Expect push back – “If we acknowledge benefits , you’ll
Bonuses
Analytics want to reduce our staff”
• Splitting hairs between benefits of process changes and
Alignment to Existing
Capabilities Accountability
Scorecards EHR
benefits of
Process
Redesign Needs HC Reform Enablers
Hard Soft
© 2012 Divurgent. All rights reserved. 23

24. EHR BR Methodology
• What is the expected change
from a clinical standpoint? • What is the expected change
• How will these changes be from an operational
Realism -Setting
measured/ baselined? Benefit Goals standpoint? Realized
Benefits
• How are they measured • How will these changes be
currently? E.g., measured/ baselined?
• Who Senior Mgt
owns these metrics? • How are they measured
• LessCommitment
variation in care Clinical
currently? E.g.,
Education / Lessons Learned
• Fewer adverse drug events • Who owns these metrics?
Point in EHR Journey
• Improvement Intent
End-game in quality Financial
• Decrease length of stay
Commitment Day
Operational Model
scores • Decrease in transcription
• Fewer infections
Starter-set costs
• Increase in preventative
Metrics Realization Rules/
• Decrease in readmission
Financial
care Bonuses
rate
• What
Analytics is the expected change from a financial • Decrease in cycle times
standpoint?
Alignment to Existing • Decrease in nursing hours
Capabilities Accountability
Scorecards
• How will these changes be measured/ baselined?
• How
Process are they measured currently?
• Who owns these metrics? E.g.,Reform Enablers
Redesign Needs HC
• Reduced costs of data collection
• Reduced redundant testingHard Soft
• Reduced payment denials
• Improved quality of coding
• Improved charge capture
• Increased net revenues
• Increased reimbursement
24
© 2012 Divurgent. All rights reserved.

25. EHR BR Methodology
Realism -Setting Benefit Goals Benefits Realized
• Where can EHR success
metrics Senior Mgt
be aligned with
existing scorecards: Clinical
Commitment • How will the EHR enable
Education / Lessons Learned
• Strategic Goals
healthcare reform and other
• Baldrige Award Criteria
Point in EHR Journey
End-game Intent Financial
long-term strategic goals of the
• Departmental Objectives
Commitment Day
Operational organization?
Model
• Epic KPIs (or other
Starter-set • Longitudinal
vendor equivalent)
Realization Rules/
management of patient
• Monthly Operating
Metrics Financial care
Bonuses
Reviews
Analytics • Patient engagement
• Meaningful Use/ VBP Alignment to Existing • HIE connectivity
Capabilities
quality measures Accountability
Scorecards • Population health
• HEDIS Scores
• Ability to participate in
• Etc. Process
risk-sharing with payers
Redesign Needs HC Reform Enablers
Hard Soft
© 2012 Divurgent. All rights reserved. 25

26. EHR BR Methodology •
•
•
Opportunity short description
Owner
Classification: Cost reduction, revenue
enhancer, etc.
• Opportunity long description
• Unit of measure
Realism -Setting • Metric Benefit Goals
calculation Benefits Realized
• Current baseline
• Post-live goal (% increase/ decrease)
Senior Mgt • Dollar value in year one
Commitment • Clinical
Dollar value in year over life of EHR
Education / Lessons Learned
• Frequency of measurement
•
Point in EHR Journey
End-game Intent Total expected return (hard and soft) Financial
Operational Model
Starter-set
Commitment Day
Metrics Realization Rules/
Financial
Bonuses
• Workshop setting to ensure everyone buys into
Analytics
Benefits Realization plan Alignment to Existing
Capabilities everyone believe in the fundamental
• Does Accountability
Scorecards
business case of the EHR?
Process
• Surface possible concerns about an operational
HC Reform Enablers
Redesign Needs ability/ control over BR metrics
owner’s
• Address concerns that some expenses/ metrics
Hard
will actually degrade in the short-term
Soft
• Are business leaders committed to being good
stewards of EHR investment dollars and drive out
as much benefit as possible?
© 2012 Divurgent. All rights reserved. 26

27. EHR BR Methodology
Realism -Setting Benefit Goals Benefits Realized
Senior Mgt
Commitment Clinical
Education / Lessons Learned
Point in EHR Journey
End-game Intent Financial
Commitment Day
Operational Model
• How
Starter-set are operational improvements separated from EHR-
Metrics related improvements? Realization Rules/
Financial
• From some, if the benefits were incurred on the “the Bonuses
Analytics watch” of the EHR go-live, it counts toward EHR ROI
• How
Alignment to Existing
Capabilities are benefits being tied to bonuses? Accountability
• How/ when are bonuses paid Scorecards
out?
Process
Redesign Needs HC Reform Enablers
• Bi-weekly meetings: goals, continued model
refinements; measurement reporting
Hard Soft
• Coaching as necessary
• Project sponsor drives meetings
• BR Scorecards are published
© 2012 Divurgent. All rights reserved. 27

28. Avoiding the Pitfalls
• Being unclear on true intent of the Benefits Realization exercise
• Waiting until after the EHR is deployed
– Operational owners may claim their process initiatives were at core of savings
– No baselining in place from before EHR deployed – harder to attribute saving to the
EHR
• Making metrics overly ambitious, e.g.
– Metrics that require data difficult to evidence (e.g. true cost of a capitated patient)
– Metrics that require multiple data points to calculate savings (e.g. an improvement
in HEDIS scores)
• Lack of clear senior management commitment, ownership, or incentives
for realizing benefits
• An “IT is just the cost of doing business” mentality
• Operational owners worried that endorsing EHR benefits is an invitation to
getting their FTEs reduced
Practicing the “art of the possible” is the way to overcome common
pitfalls of BR projects
28
© 2012 DIVURGENT. All rights reserved.

29. Other Lessons Learned
• It is imperative to establish baseline and target metrics prior to EHR
implementation recognizing that paper-based data may not be reliable.
• It can be difficult to determine the precise benefits realization amounts.
Today’s ROI efforts lack a common basis for comparison.
• Avoid using fixed costs in financial savings analysis. Only variable costs would
be saved, under most operational situations.
• Claim staff time savings only if it results in fewer full-time equivalents per unit
of service. In many situations, time savings do not result in a financial benefit.
• Although the prevention of adverse events and unnecessary procedures may
result in savings, the actual cost of a prevented event is difficult to estimate.
• In some instances, the revenue reduction from reduced clinical utilization may
be greater than the expected cost savings, depending on the hospital’s payer
mix and contract terms.
© 2012 Divurgent. All rights reserved. 29

30. Contact Information
David Shiple
david.shiple@divurgent.com
617.947.1925
Divurgent
4445 Corporation Lane, Suite 228
Virginia Beach, VA 23462
877.254.9794
30
© 2012 Divurgent. All rights reserved.