DDHA 8601 Week 5 Cost of Ownership Analysis Example

Five Years of One Device Monitoring Platform, Line by Line With Its Source: A Total Cost of Ownership Analysis Where the License Is the Least Interesting Number

Student Name

Walden University

DDHA 8601: Technology and Innovation in Healthcare

Instructor Name

Month Day, Year

Five Years of One Device Monitoring Platform, Line by Line With Its Source: A Total Cost of Ownership Analysis Where the License Is the Least Interesting Number

Scope

This analysis estimates the five-year cost of owning the vendor-neutral device monitoring platform evaluated earlier in the course for the cardiac device clinic at Linden Ford, the composite community hospital whose device nurses follow about 1,850 patients. It counts every cost the hospital would bear, whether or not anyone writes a check for it. All figures are composite figures prepared for this analysis; none comes from a real contract or a real employer's payroll. Each line states its origin: a written quotation, a rate from the finance office, an estimate from the information technology department, or an assumption made by the writer.

The Five-Year Cost

Table 1

Five-Year Total Cost of Ownership

Nurse time is valued at $58 an hour and electrophysiologist time at $210, both fully loaded rates from the finance office; figures are rounded to the nearest $10.

The License Is Not the Story

The subscription is the largest line, but it is the least uncertain and needs the least discussion. It comes from a written quotation and grows only with the clinic's panel. The lines that deserve attention are the ones nobody would invoice.

Why the Productivity Dip Is a Real Cost

In the first months after go-live, the device nurses will be slower. They will be learning a new layout, checking the summaries against the manufacturers' sites to see whether they can trust them and working through interface errors. No one writes a check for that, but it is real: during those weeks, the same nurses review the same transmissions with more hours, and either other work waits or overtime is paid. The analysis assumes review takes 15% longer for twelve weeks, applied to the roughly 26 hours a week each of the three nurses spends on remote monitoring. That figure is an assumption. Fleming et al. (2014), studying primary care practices after record system implementation, found measurable effects on workflow and financial measures, a reminder that output often falls while people learn a new system. The dip here is likely smaller because the platform changes only one part of the nurses' work, but it should not be treated as zero.

The parallel review line is related. The technology evaluation recommended running the platform's filtering feature alongside full nurse review for three months before trusting it. That safeguard is a cost the vendor's quotation does not include, and it belongs in the total because the hospital has decided it will not use the filter without it.

Interface Costs

Interface costs are spread across three lines, and together they come to $56,700, more than a third of the subscription. The vendor charges an annual interface fee; the hospital's own analysts must build the interface and then maintain it whenever either the platform or the record system is upgraded. The maintenance estimate of 40 hours a year is an assumption based on the information technology department's experience with similar interfaces, and the true figure may land above or below it.

Without the interface, the platform would save the nurses their morning logins but not their documentation time, which is where most of the expected time savings lie. The interface is therefore not optional. Slotwiner et al. (2015) emphasize that remote monitoring data should be integrated into the clinic's record and workflow, which supports treating the interface as part of the system rather than an add-on.

Downtime and Training

When the platform is unavailable, the nurses will return to the four manufacturers' websites, which still work. The downtime line assumes eight extra hours a year across the nurses for this, a small number because the fallback is the current routine. Training costs are modest because the users are few: twelve hours for each nurse, three for each electrophysiologist and a two-hour refresher for the nurses each year.

Sensitivity

Two assumptions move the total most. The first is panel growth. At no growth, the subscription falls to $129,500; at 10% a year, it rises to about $158,000. The total therefore ranges from about $226,600 to about $255,100 on this assumption alone. The second is the productivity dip. If review takes 30% longer for 24 weeks instead of 15% for twelve, the dip rises from about $8,100 to about $32,600, adding roughly $24,500 to the total. By contrast, doubling the interface maintenance estimate adds $19,000, and doubling downtime hours adds only $2,320.

The two dominant assumptions behave differently. Panel growth is outside the clinic's control but can be forecast from referral trends. The productivity dip is partly within the hospital's control, through the quality of training and the vendor's support at go-live, which is an argument for writing go-live support into the contract.

What This Total Does Not Include

The analysis counts costs only. It does not net out the time the platform is expected to save, which the business case will weigh separately. Nor does it credit the clinical value of remote monitoring itself, such as faster decisions after device events (Crossley et al., 2011), because the clinic already monitors remotely and keeps that value with or without the platform. It does not include the cost of the electrophysiologists' time reviewing escalated transmissions, because that work happens with or without the platform. And it does not include the costs the device manufacturers already bear for their own remote monitoring systems, which are free to the hospital.

Conclusion

Over five years, owning the platform would cost about $240,000, of which the subscription is about 60%. The remaining 40%, interfaces, a productivity dip, parallel review, training and downtime, would never appear on the vendor's invoice. Any decision about the platform should compare its expected time savings against this total, not against the subscription alone.

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

Fleming, N. S., Becker, E. R., Culler, S. D., Cheng, D., McCorkle, R., da Graca, B., & Ballard, D. J. (2014). The impact of electronic health records on workflow and financial measures in primary care practices. Health Services Research, 49(1, Pt. 2), 405-420. https://doi.org/10.1111/1475-6773.12133

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