DDHA 8601 Week 11 Business Case Example

Renew the Device Monitoring Platform for Three Years at No More Than $37,500 a Year: A Business Case With Doing Nothing Priced and Two Risks That Would Change the Answer

Student Name

Walden University

DDHA 8601: Technology and Innovation in Healthcare

Instructor Name

Month Day, Year

Renew the Device Monitoring Platform for Three Years at No More Than $37,500 a Year: A Business Case With Doing Nothing Priced and Two Risks That Would Change the Answer

The Case on One Page

Problem. Linden Ford Community Hospital's cardiac device clinic follows about 1,850 patients, and its three device nurses spend most of their time reviewing remote transmissions. The platform that gathers those transmissions into one worklist comes up for renewal in four months, and the clinic's panel is growing about 5% a year.

Recommendation. Renew the platform for three years at no more than $37,500 a year, and do not add the vendor's outsourced review service at this time.

Money. Three-year cost of renewal: up to $112,500. Measured value of nurse time saved: about $38,000 a year, or about $114,000 over three years. Net financial effect: roughly break-even, with documentation in the record and fewer routine clinic checks as benefits not counted in that figure. Cost of doing nothing: about $38,000 a year in nurse time and the loss of record documentation, against savings of about $36,000 a year in platform costs.

Risks that would change the answer. A renewal price above $37,500 a year would make the platform a net cost. A device manufacturer withdrawing its data feed from third-party platforms would remove a share of transmissions from the worklist and weaken the case.

Decision requested. The chief financial officer is asked to approve the renewal within the stated ceiling within five weeks, giving procurement time to negotiate before the current term expires.

Background

The clinic's workflow and the platform's claims were examined earlier: before the platform, nurses logged into four manufacturers' websites each morning and typed summaries of each review into the record. The platform replaced the logins with one worklist and sends structured summaries into the record. Remote monitoring itself is well supported; Varma et al. (2010) found that it reduced in-hospital device evaluations substantially, and the expert consensus statement recommends it as standard follow-up (Slotwiner et al., 2015). The question in this case is narrower: whether the platform that organizes remote monitoring is worth renewing.

Evidence of Value

The value figure rests on time measured, not promised. No baseline was recorded before go-live, a failure noted in last quarter's benefits review. To fill that gap, the clinic ran a two-week test in which nurses reviewed half the transmissions using the manufacturers' websites and half using the platform, logging time for each. Reviews on the platform took a median of about 3.1 minutes, against about 4.6 on the websites. At about 14,000 transmissions a year, the difference is roughly 350 nurse hours. The morning logins the platform removes add about 310 hours across the three nurses. At the finance office's loaded rate of $58 an hour, the two together are worth about $38,000 a year. The test was short and the nurses knew they were being timed, so the figure is an estimate.

The benefits review also found that routine in-clinic checks per 100 patients fell by roughly one seventh after adjusting for panel changes. That reduction frees clinic appointments but does not reduce costs, so it is not counted in the money block.

Alternatives

Do nothing. Let the subscription lapse and return to the manufacturers' websites. This saves about $36,000 a year in subscription, interface fee and interface maintenance. It costs about $38,000 a year in nurse time, removes structured documentation from the record and would require retraining nurses on four websites they have not used routinely for two years. As the panel grows, the time cost grows with it, while the savings stay flat. Doing nothing is roughly even in year one and worse thereafter.

Renew as is. The recommended option. The vendor's proposal held by the hospital quotes $35,800 for the first renewal year, within the ceiling.

Renew and add outsourced review. The vendor offers a service in which its own staff screen routine transmissions and pass only those needing action to the clinic, quoted at $22 per patient a year, about $40,700 in year one. This would free perhaps 0.4 of a nurse's time. The clinic does not currently need that time, because the panel's growth is being absorbed, and handing initial review to an outside service raises the accountability concerns noted in the consensus statement. This option should be reconsidered if the panel grows faster than expected.

Financial Summary

Table 1

Three-Year Comparison

Costs include subscription, interface fee and interface maintenance; values use the two-week time test and the finance office's loaded nurse rate.

Risks

Price. The vendor may propose more than the current quotation during negotiation. Above $37,500 a year, renewal becomes a net financial cost, and the decision should return to the chief financial officer with the do-nothing option reconsidered.

Data feeds. The platform depends on each manufacturer allowing third-party access to its transmissions. If a manufacturer withdrew access, that manufacturer's patients would return to its website, reducing the platform's value in proportion to their share of the panel. The renewal contract should allow the hospital to reduce the subscription if this happens.

Implementation

Procurement will negotiate within the ceiling, with clauses on price protection and on data feed withdrawal. The device clinic nurse manager will continue as owner. Nurse time per transmission will be logged one week each quarter so that the next renewal decision rests on a real series.

Appendix: Assumptions

Transmission volume of 14,000 a year comes from the platform's own reports for the past twelve months. The time difference comes from a two-week test with known limitations. The loaded nurse rate comes from the finance office. Panel growth of 5% a year is the clinic's three-year average. Interface maintenance at 40 hours a year is an information technology estimate. Crossley et al. (2011) showed that remote notification shortens the time to clinical decisions; the value of that speed is real but is not counted here, because it belongs to remote monitoring itself, which the hospital would keep under any option.

References

Crossley, G. H., Boyle, A., Vitense, H., Chang, Y., & Mead, R. H. (2011). The CONNECT (Clinical Evaluation of Remote Notification to Reduce Time to Clinical Decision) trial: The value of wireless remote monitoring with automatic clinician alerts. Journal of the American College of Cardiology, 57(10), 1181-1189. https://doi.org/10.1016/j.jacc.2010.12.012

Slotwiner, D., Varma, N., Akar, J. G., Annas, G., Beardsall, M., Fogel, R. I., Galizio, N. O., Glotzer, T. V., Leahy, R. A., Love, C. J., McLean, R. C., Mittal, S., Morichelli, L., Patton, K. K., Raitt, M. H., Ricci, R. P., Rickard, J., Schoenfeld, M. H., Serwer, G. A., . . . Yu, C.-M. (2015). HRS expert consensus statement on remote interrogation and monitoring for cardiovascular implantable electronic devices. Heart Rhythm, 12(7), e69-e100. https://doi.org/10.1016/j.hrthm.2015.05.008

Varma, N., Epstein, A. E., Irimpen, A., Schweikert, R., & Love, C. (2010). Efficacy and safety of automatic remote monitoring for implantable cardioverter-defibrillator follow-up: The Lumos-T Safely Reduces Routine Office Device Follow-up (TRUST) trial. Circulation, 122(4), 325-332. https://doi.org/10.1161/CIRCULATIONAHA.110.937409