MHA FP 5064 Assessment 3 Health Information System Cost-Benefit Analysis

Sample Answer for MHA FP 5064 Assessment 3 Health Information System Cost-Benefit Analysis Included After Question

This assessment provides an opportunity for you to complete a cost-benefit analysis of a health information system and justify your recommendations for implementation, based on best practices.

Complete a Vila Health interactive simulation in which you will practice analyzing the costs and the benefits associated with having the newly acquired rural hospitals switch to the same health information system currently used at the main hospital. Then, develop a cost-benefit spreadsheet and write a 2-3 page executive summary of your findings and recommendations.


Conduct a cost-benefit analysis to determine the feasibility of the proposed system upgrade. Use the Cost-Benefit Analysis Spreadsheet for your analysis. Write an executive summary of your findings, recommendations, and rationale for your recommendations.

A Sample Answer For the Assignment: MHA FP 5064 Assessment 3 Health Information System Cost-Benefit Analysis

Title: MHA FP 5064 Assessment 3 Health Information System Cost-Benefit Analysis 

The cost-benefit analysis at Vila health would be important in examining the value that new proposal of equipping the rural hospital with the HIM as the main hospital. The Vila Health leadership team required a cost-benefit analysis to weigh the benefits and drawbacks of adopting a health information system at the recently purchased rural hospital (Vila Health, n.d). For this project, a cost-benefit analysis table was prepared to represent Vila Health’s quantitative cost-benefit ratio. This project will design a cost-benefit analysis spreadsheet that would be developing a strong decision on the value of the current proposal of HIM at rural hospital of Vila health.

Health Information System Components

Vila Health sought to discover a solution to connect its hospital information systems to achieve internal interoperability. Vila Health will bear the costs of both hard and software for EHR implementation (Mishan & Quah, 2020). Implementation assistance, equipment, firmware, terms of installation, training, and ongoing network charges and maintenance are the primary components of system integration. The hardware components that would cost the project are database servers, Computers, phones, tablet devices, and printers (Mishan& Quah, 2020). EHR programs, interface components, and system upgrades are all included in software costs. In addition, before and during implementation, the top management should train doctors, nurses, and office employees.

The Gap between Current Health Information Technology and Future Needs

In the last five years, significant governmental and private expenditures have been made to improve the adoption of electronic health records in health facilities and doctor’s offices throughout the region. Vila Health’s data system is currently unconnected. This has the potential to stymie patient treatment and work procedures (Mishan & Quah, 2020). The main purpose of Vila Health is to modernize information systems to increase workflow and connection. Vila Health will increase communication and service quality by bringing all of its facilities into one information system.

Costs and Benefits of Implementing a Modern System

The cost is determined by the type of technology Vila Health wishes to employ. According to several studies, the cost of buying and operating an EHR system ranges from $15,000 to $70,000 per physician (, 2014). The overall cost of the project would come with corresponding benefits after years at the clinic. To use the new system at the rural center, Vila Health will also have to obtain a software license each year, which would cost $27,000 per year to use. Vila Health’s personnel had to be trained on the new system. The total cost of all staff training is $13,000, which includes all equipment needed for instructor training as well as pay (Moran et al., 2020). Employee training benefits not only the employees but also the patients and the company.

Vila Health will be able to promote a lot of costs and develop a more effective program with electronic patient information by modernizing the system. Increased usage of testing, fewer patient management employees, lower expenses for consumables used to keep paper records, lower transcription costs, and lower graphic download costs are just a few of the efficiencies. There is an extra cost of improving the infrastructure to produce a more efficient system. The cost of the hard and software used in the upgrade will cost $83,000 (Moran et al., 2020). Furthermore, the costs of maintaining the deployed system can be substantial (Moran et al., 2020). Changes to the hardware and software of a system are frequently required regularly. Another disadvantage of EHR is that it disrupts medical staff and supplier workflow, resulting in a temporary productivity loss.

Costs and Benefits of not Implementing an Updated System

Vila Health’s structure and healthcare procedures will be considerably improved as information systems are modernized. Some businesses may decide against implementing a new information management system. Vila Health will be forced to deal with obsolete technology if it does not modernize its information system (Moran et al., 2020). Furthermore, the Vila Health EHR he is presently using will expire, and maintaining a health record without the need for an ongoing EHR will be challenging for the business. Vila Health will need to pay staff to keep paper records and existing EHRs up to date until they are no longer functional. Furthermore, failing to adopt the new system will result in more work teams for employees and a reduction in productivity.

Impact of Evolving Business Trends on System Improvement Decisions

Health is always changing and evolving. It was difficult to conduct a study before the emergence of technology. The majority of the study is based on information gathered by states, states, and counties (Mishan & Quah, 2020). Electronically storing patient data boosts data availability, allowing for greater quantitative analysis to aid in the identification of evidence-based best practices.

Recommended Plan of Action

The health information system offers significant advantage to the healthcare delivery process despite the high initial implementation cost. According to Abbasi & Mirzaee (2020), lack of efficiencies in the data management causes errors and compromise the quality of care the patient receives.  In another study, Laurenza et al. (2018) show that the adoption of information technology in the healthcare sector has improved the quality of care delivered to the patients. Similarly, many stakeholders including the clinicians, patients and national health systems have benefited from the improvement. As a result, Villa Health should install a new HIS based on the cost-benefit analysis to improve the operational efficiency and the quality of care given to the patients,

A new HIS is expected to generate increasing benefits each year that would start from $72,000 with the initial cost of $61,290. The profit generated in the first year of operation will be $10,710 and this will increase subsequently.  The total expenses for the five years will be $287,790 while the income to be generated will be $536,800 which is significantly profitable. This implies that the project would add value and revenue at the clinic. In addition to generating income, the HIS will enhance patient care by reducing overtime, reducing errors and readmission with access to applications that assist them in making critical health-care choices.


A cost-benefit analysis is an important part of the decision-making process in a health-care organization because it looks at the potential profits or losses that could arise from certain project decisions. The decision to adopt a new HIS at Vila Health is not an easy one, since there are numerous financial factors to consider. The associated cost-benefit analysis sheds light on the possible revenue gained as a result of this deployment. It is advised that Vila Health proceed through with a fresh HIS deployment at this time.

References (2014). How much is this going to cost me? Retrieved from

Mishan, E. J., & Quah, E. (2020). Cost-benefit analysis.New York, NY: Routledge.

Moran, D., Wu, A. W., Connors, C., Chappidi, M. R., Sreedhara, S. K., Selter, J. H., &Padula, W. V. (2020). Cost-benefit analysis of a support program for nursing staff. Journal of Patient Safety, 16(4), e250-e254.

Vila  Health (n.d.). HIM cost benefit analysis challenge. Retrieved from /transcript.html

Abbasi, F., Khajouei, R., & Mirzaee, M. (2020). The efficiency and effectiveness of surgery information systems in Iran. BMC Medical Informatics and Decision Making20(1).

Laurenza, E., Quintano, M., Schiavone, F., & Vrontis, D. (2018). The effect of digital technologies adoption in healthcare industry: A case based analysis. Business Process Management Journal24(5), 1124-1144.