Electronic medical record

benefits
A literature review

Department of Health
Electronic medical record benefits

A literature review
If you would like to receive this publication in an accessible format, please email:
ocio.services@health.vic.gov.au

This document is available as a PDF on the internet at: www.health.vic.gov.au/divisions/fcs/cio.htm

Copyright, State of Victoria, Department of Health, 2012
This publication is copyright, no part may be reproduced by any process except in accordance with the
provisions of the Copyright Act 1968.
Authorised and published by Victorian Government, 50 Lonsdale Street, Melbourne.
Except where otherwise indicated, the images in this publication show models and illustrative settings
only, and do not necessarily depict actual services, facilities or recipients of services.
March 2012 (1203019)
Contents

Executive summary 1

Introduction 3
Document purpose and scope 3
Background 3
Intended audience 3

The healthcare opportunity 4

Benefits that ICT brings to quality care and demand management 4
The electronic medical record defined 4

Benefits analysis 5
How an EMR will realise the benefits 5
The benefits along a patient journey 6
Quantitative benefits 7
Qualitative benefits 9
Continuous optimisation 10
Tip of the iceberg 10

Conclusion 12

Appendices 13
Appendix 1: Benefit extrapolation methodology 13
Appendix 2: Cited references 15
Appendix 3: Other references 18
Executive summary

An extensive literature review was undertaken to document and identify the benefits that may be
attributed to using electronic medical record (EMR) information and communication technology (ICT)
systems, and to quantify the economic benefits that could be realised through the introduction of these
systems into Victorian public health services (VPHS).
The literature highlights benefits from both administrative and clinical perspectives that can be attributed
to using an EMR system (Table 1, overleaf). Most of the literature identifies qualitative benefits, such as
reducing duplication of administration data or providing the right information at the right time for the
patient condition. It draws attention to the importance of establishing clinical pathways to reduce
preventable in-hospital complications.
Four papers identified quantitative benefits that can be attributed to the implementation of ICT systems
using an EMR as a tool to improve clinical pathways, providing evidence supporting the implementation
of an EMR to reduce preventable in-hospital complications. Three of those studies demonstrated
quantitative benefits that could be attributed to the implementation of clinical pathways and medication
management using an EMR system to improve clinical outcomes and help drive efficiencies that result in
decreased (18 to 30 per cent) patient length of stay (LOS) in hospitals. One study quantified the
reduction of errors (76 per cent) in discharge summaries that could be attributable to an EMR.
The literature reinforces the argument that EMR systems will be pivotal in enabling the efficient collection
of meaningful, accurate and complete data that supports active clinical decision support and the
development, implementation and optimisation of clinical pathways.
The implementation of an EMR system will enable business process improvement activities such as the
Redesigning Hospital Care Program to be set up as permanent continuous optimisation programs across
the VPHS. This ensures that all clinical and business processes included in the EMR solution may be
continuously monitored, optimised and deployed on a local and statewide basis, as required.
During the analysis an opportunity to estimate the economic benefits that may be realised through
implementing an EMR system was identified. The estimation is based on extrapolation of two studies,
one by Ehsani et al. (2006) using data from the Victorian Admitted Episodes Data Set (VAED), the other
by Rotter et al. (2010) on the impact that introducing clinical pathways has on preventable in-hospital
complications. Although no statistical analysis was undertaken to confirm a relationship between the
clinical information in the medical record and the VAED data, our estimates suggest that if one accepts
the assumption that an EMR system will make clinical pathways more easily developed and implemented
across VPHS, there would be the opportunity for a reduction of up to 35,000 preventable in-hospital
complications per year.
The quantified benefits identified in Table 1 (overleaf) pertain to reductions in preventable in-hospital
complications and improvements to referral processes. We believe these represent only the tip of the
iceberg and the full benefits to be gained from widespread use of continuously optimised clinical
pathways will only be understood once an EMR solution is operating across the VPHS.

Page 1
Electronic medical record benefits

Table 1: Identified EMR benefits across the patient journey

1
No. Benefits Quantified benefit

Across the whole patient journey

1 Entering data once and using it many times (Garde 2006) -

2 Computerisation of data entry to achieve legible documentation (Schuler 2010); -

increasing the systems ability to ensure completeness, consistency and legibility of
medical records (Paneth-Pollak et al. 2010); providing the opportunity to evaluate
medical record data in real time to inform clinical, program and policy decisions
(Paneth-Pollak et al. 2010)

3 Coordination of processes across the patient journey at the clinical, administrative and
management levels (Reid et al. 2005; Grossman 2008)

4 Reducing duplication of administration data by providing access to all the team -

(Australian Nursing Federation 2007)

Admission assessment

5 Average cost benefit of processing an electronic patient referral in a hospital (Cannaby 32 per cent
et al. 2004) processing referral
cost

Treatment / intervention
2
6 Improved clinical outcomes through sepsis clinical pathway (Hopper & Jacobs 2009) 18 per cent LOS

7 Improved clinical outcomes through pneumonia clinical pathway (Rotter et al. 2010) 20 per cent LOS

8 Reduced surgical adverse events through medication management (Murphy et al. 30 per cent LOS
2009)

9 Standardisation of data elements and information models to ensure semantic -

interoperability enabling the implementation of decision support (Beale et al. 2007)

10 Development of precise clinical processes using evidence-based medicine -

(Christensen et al. 2009; Fickenscher 2009)

11 Adoption of clinical protocols based on key risk-prone processes (Rotter et al. 2010) -
that prevent adverse events by encouraging efforts to drive efficiencies in processes
which are highly prone to errors (Department of Health 2010a; Australian Commission
on Safety and Quality in Health Care 2010; Committee on Quality of Health Care in
America, Institute of Medicine 2001; Agency for Healthcare Research and Quality
2010).

12 Identify the right information at the right time for the patient condition (de Graaf et al. -
2007)

13 Provide accessibility to consolidated data, information and medical expertise at the -

point of care, anywhere, at any time through better use of inexpensive technologies
such as mobile devices (Blaya et al. 2007; Fickenscher 2010)

Referral / discharge

14 Reduction of errors in discharge summaries (Lisby 2005) 76 per cent errors

15 Provide cost-effective use of referral documentation for legal, logistics and -

management of care during the patient journey (Lisby et al. 2005)

16 Reduce errors in communication between services by ensuring the intended -

destination receives key administration data (for example, email with certification)
(Kohn et al. 2000)

1
Quantified benefits have been highlighted in orange and are illustrated on the patient journey in Figure 3.
2
Note that Hopper and Jacobs (2009) Halting the sepsis cascade paper was published in a vendor-specific publication, The
Cerner Quarterly, vol. 5, no. 1, pp. 1523.

Page 2
Introduction

Document purpose and scope

This report documents and identifies the benefits that may be attributed to the implementation of an EMR
system and provides an estimate of the economic benefits that could be realised if introduced into the
VPHS.
The document supports the aim of the Victorian Health Priorities Framework 20122022 to deliver the
best possible healthcare to Victorians by using e-health and communications technology and enabling
continuous improvements and innovations (Department of Health 2011).
Section 141(3)(e) of the Health Services Act 1988 makes provision for an electronic records system
established for the purpose of enabling the sharing of information in or between public hospitals and
denominational hospitals for the treatment of patients at any time (AustLII 2010). The legislation
therefore sets the scope for a VPHS EMR implementation such that efficient electronic sharing of
information between health services can occur without requiring explicit consent.

Background
Victoria is implementing a number of programs to modernise and replace ICT systems throughout the
Victorian public healthcare sector and build the foundations of an EMR system.
The Board of Health Information Systems (BHIS) within the Department of Health is committed to using
e-health tools to improve healthcare delivery and has endorsed the following high-level principles
regarding the completion of an EMR for Victorian public hospitals:
elimination of paper medical records in Victorias public hospitals
one patient, one Victorian public hospital medical record
clinical transformation through active decision support.
The aim is to enable timely access to critical patient information and the clinical evidence base, such as
best practice clinical guidelines and clinical pathways to support a reduction in medical errors, support
better clinical decision making, improve patient health outcomes, reduce risks and optimise healthcare
delivery processes (Department of Health 2011).
To realise the full benefits of electronic information sharing, the solution needs to adopt national and
international standards to ensure scalability, interoperability and ability to accommodate future integration
with other clinical systems that exist across the care continuum.

Intended audience
This document is intended for broad distribution across the Victorian public health sector, including:
Department of Health management and staff
public health services management and clinical staff
public health services related professional bodies and educational institutions.

Page 3
Electronic medical record benefits

The healthcare opportunity

Benefits that ICT brings to quality care and demand management

To address the increasing demand for quality healthcare, Victoria seeks to increase the effectiveness
(efficiency and quality) of service provision through reducing the incidence of preventable and avoidable
illness by reviewing practice variations and promoting a consistent and rapid adoption of best practice.
This approach aligns well with clinical transformation which is defined as a comprehensive, ongoing
approach to care delivery excellence that measurably improves quality, enhances service, and reduces
costs through the effective alignment of people, process, and technology (Fickenscher 2010).
Health ICT systems can be considered the key technology component (Figure 1) that will enable clinical
transformation.

Figure 1: The Clinical Transformation Triad (Fickenscher 2010)

LE

CH
AB

AN
EN

GE

The electronic medical record defined

An EMR electronically documents all information that is administratively and clinically relevant to a
patients hospital stay. An EMR system typically includes business modules that are used for registering
a patient/client and a suite of clinical modules that support the services provided by the hospital. To
realise the full benefits of an EMR, the ICT systems functionalities cannot be implemented in isolation as
patient treatment generally has touch points across a variety of functions and requires integrated and
interoperable implementations.
An EMR system is recognised as a toolkit that enables clinical transformation becomes the source of
truth for a patient's journey within hospitals and provides a framework for patient-centred healthcare
delivery (Committee on Quality of Health Care in America, Institute of Medicine 2001; Bates & Gawande
2003; Hillestad 2005; Fickenscher 2010). Using an EMR enables continuous improvement in healthcare
delivery by capturing structured information, supporting interoperability across systems and by enabling
3
active decision support through the ability to access and interrogate atomic data elements. Despite this,
the EMR adoption rate is low (Ashish et al. 2008) and there is currently no Australian hospital reaching
4
Stage 7 on HiMSS EMR Adoption Model.

3
Atomic data elements refer to data types that can no longer be broken down into smaller units and which have precise meaning or
semantics. A data element is the smallest named unit of information in the model that can be assigned a value, for example
DateTime of Observation and Observation Note (National E-Health Transition Authority 2010b).
4
See: http://www.himssanalytics.org/docs/emram.pdf

Page 4
Benefits analysis

The literature identifies examples where an EMR system will be pivotal in enabling the efficient collection
of meaningful, accurate and complete data that aid active clinical decision support and the development,
implementation and optimisation of clinical pathways.
Rotter et al. (2010) describe clinical pathways as structured multidisciplinary care plans used by health
services to detail essential steps in the care of patients with a specific clinical problem. They aim to link
evidence to practice and optimise clinical outcomes whilst maximising clinical efficiency.

How an EMR will realise the benefits

The key attributes of an EMR system that are important to deliver the benefits include:
interoperability and messaging standards adoption of interoperable technologies that adhere to
technical standards to facilitate messaging (Standards Australia Limited 2010; Health Level 7 2010)
and data exchange between hospitals (Department of Health 2010b)
atomic data that can be interrogated an EMR facilitates the computerisation of data entry to
achieve legible documentation (Schuler 2010), the ability to query fine-grained data elements (Chen
2009) and provides the opportunity to evaluate medical record data in real time to inform clinical
program and policy decisions (Paneth-Pollak et al. 2010)
active decision support standardisation of data elements and information models to ensure
semantic interoperability enabling the implementation of active decision support (Beale et al. 2007).
The literature identifies a range of benefits that have been attributed to the implementation of standards,
decision support and evidence-based processes and workflows. These benefits include:
evidence-based clinical processes development of precise clinical processes using evidence-
based medicine (Christensen et al. 2009; Fickenscher 2009) driven by the need to provide expertise
at the point of care (Christensen et al. 2009)
clinically focussed business drivers adoption of business models based on clinical processes
and measured by clinical quality indicators (Australian Commission on Safety and Quality in Health
Care 2010; Committee on Quality of Health Care in America, Institute of Medicine 2001) by
supporting business workflows to automate and streamline processes
clinically relevant information at the point of care access to consolidated data, information and
medical expertise that allow clinical decisions to be made independent of location, time and context
(Department of Health 2010c), where the EMR replaces the traditional paper medical record
improved patient safety preserves healthcare professionals implicit knowledge of patient safety
and offers tools that provide decision support such as alerts for infectious diseases or allergies
(Department of Health 2010a; Australian Commission on Safety and Quality in Health Care 2010;
Committee on Quality of Health Care in America, Institute of Medicine 2001; Agency for Healthcare
Research and Quality 2010). An EMR enables:
o reduction of human errors in prescribing treatment
o reduction of errors by providing active decision support to clinicians
o reduction of errors in primary source data, as it is entered immediately at the point of
care by the health professional, or automatically by clinical monitoring tools
o reduction of poor quality data from hospital services due to reporting through provision of
primary source data, eliminating need for potentially adapted aggregated data
processes focusing on error prevention adoption of clinical protocols based on key risk-prone
processes (Rotter et al. 2010) that prevent adverse events by encouraging efforts to drive efficiencies
in processes that are highly prone to errors (Department of Health 2010a; Australian Commission on
Safety and Quality in Health Care 2010; Committee on Quality of Health Care in America, Institute of
Medicine 2001; Agency for Healthcare Research and Quality 2010)

Page 5
Electronic medical record benefits

coordinated processes coordination of processes across the patient journey at the clinical,
administrative and management levels (Reid et al. 2005; Grossman 2008)
cost-effective access to data at the point of care accessibility to consolidated data, information
and medical expertise at the point of care through better use of inexpensive technologies such as
mobile devices (Department of Health 2010d; Fickenscher 2010). This reduces healthcare cost by
preventing duplication of data, and encourages local accountability through down-up performance
measurement
efficiency tool provides a tool for managers, executives, and auditors to measure hospital
performance based on primary source data by giving access to atomic structured information in real
time (as opposed to, for example, scanned documents). This dramatically reduces the time between
the collection of data and the analysis of key performance indicators and offers unparalleled richness
and visibility of operational activities from the point of care
e-health tool the EMR places the patient at the centre of care delivery and underpins a Personally
Controlled Electronic Health Record (PCEHR). The resulting outcomes from an EMR as a key e-
health tool include:
o providing a central repository for clinically relevant information
o supporting data collection used for secondary uses (for example, research)
o supporting effective implementation of public health strategies
o improved ability to respond to major incident/disaster needs in the community.
The section below describes where in the patient journey the identified benefits occur.

The benefits along a patient journey

A patient journey can be described as all sequential steps involving the movement of the patient and all
relevant information (for example, from emergency department to ward or X-ray department), and is
performed within an accreditation or standards framework (Australian Council on Healthcare Standards
2009).
The patient journey is typically divided into three distinct stages: admission, treatment and discharge
(Figure 2). The introduction of an EMR system will enable administrative as well as clinical benefits to be
gained across all three stages of the patient journey.

Figure 2: Patient journey

Each patient journey stage follows a similar process in which patients are admitted, treated and moved to
the next stage of the patient journey. The treatment stage consists of one or more episodes of care,
where an episode of care reflects the changing diagnosis or treatment of the patient.

Page 6
The benefits identified in the literature review (Table 1 on page 2) are depicted where they occur on the
patient journey in Figure 3 below. The quantitative benefits and the qualitative benefits sections below
provide more detailed information on each of the benefits identified.

Figure 3: Patient journey with identified EMR benefits

Quantitative benefits
Of the 153 papers reviewed, 40 papers provided identifiable benefits, of which four papers presented
quantitative benefits that can be attributed to the implementation of health ICT systems. Three studies
quantified benefits attributable to the implementation of clinical pathways and medication management
using an EMR system. The studies in Table 2 demonstrate that an EMR system may improve clinical
outcomes and help drive efficiencies by decreasing (1830 per cent) the patients LOS in hospitals. One
study quantified the reduction of errors (76 per cent) in discharge summaries.

Table 2: Quantitative benefits identified

No. Benefits Quantified benefit

Admission assessment

5 Average cost benefit of processing an electronic 32 per cent processing referral cost (Cannaby et al.
patient referral in a hospital 2004)

Treatment / intervention

6 Improved clinical outcomes through clinical sepsis: 18 per cent LOS (Hopper & Jacobs 2009)
7 pathway pneumonia: 20 per cent LOS (Rotter et al. 2010)

8 Reduced surgical adverse events through 30 per cent LOS (Murphy et al. 2009)
medication management

Referral / discharge

14 Reduction of errors in discharge summaries 76 per cent errors (Lisby et al. 2005)

Hopper and Jacobs (2009) demonstrated that the implementation and use of an EMR as a tool to
improve the outcomes for sepsis treatment had significant results. Their study at the Methodist North
Hospital showed that LOS for patients treated by sepsis complications fell to 13.6 days from 16.5 days
(p. 22), an 18 per cent reduction in LOS. This reduction equated to a positive financial impact of nearly
[USD] $2 million based on efficiencies in care delivery and documentation of severe sepsis (p. 22).
The importance of addressing underlying causes of adverse events to reduce the LOS is illustrated in a
study by Hauck and Zhao (2011). Their study was performed on VAED data for 200506 and shows that
a hospital stay carries a 5.5 per cent risk of an adverse drug reaction, 17.6 per cent risk of infection and
3.1 per cent risk of ulcer for an average episode. Further to this, they found that each additional night in
hospital increases the risk by 0.5 per cent for adverse drug reactions, 1.6 per cent for infections, and 0.5
per cent for ulcers.

Page 7
Electronic medical record benefits

The adoption of clinical pathways for an episode of care has been seen to reduce the LOS by promoting
evidence-based treatment options to target preventable and avoidable incidents of illness (Rotter et al.
2010). Introducing health ICT solutions that exhibit the key attributes of an EMR system will make clinical
pathways more easily developed, implemented and optimised. This is illustrated in Figure 4 (below)
which provides an example of a patient experiencing an increased LOS due to preventable complications
during an abdominal procedure. The patient suffers complications including pneumonia and then sepsis.
The adoption of an EMR-based system can reduce this LOS by enabling earlier detection and diagnosis
of the complications, and so reduce (and at times eliminate) the need for extended treatments.

Figure 4: Episodes of care and separation

Qualitative evidence outlined in the next section suggests that implementing an EMR system creates an
inter-connected environment that enables real-time collection and access to primary source data. This
environment supports effective resource management and information sharing that is required to deliver
best practice care across the patient journey. Additionally, it promotes consistent, rapid identification and
adoption of evidence-based clinical pathway improvements that dramatically decrease complications
such as pneumonia in hospitals, infections post interventions, and potential bleeding (Rotter et al. 2010).

Page 8
Qualitative benefits
The literature documents qualitative benefits that can be derived by introducing health ICT systems, such
as reducing the reliance on tools such as pen, paper and the human memory (National E-Health
Transition Authority 2010a), reducing duplication of administration data or providing the right information
at the right time for the patient condition. Table 3 summarises 11 qualitative benefits that were identified.

Table 3: Qualitative benefits identified

No. Benefits

Across the whole patient journey

1 Entering data once and using it many times (Garde 2006)

2 Computerisation of data entry enabling the achievement of legible documentation (Schuler 2010); increasing
the systems ability to ensure completeness, consistency and legibility of medical records (Paneth-Pollak et
al. 2010); and providing the opportunity to evaluate medical record data in real time to inform clinical program
and policy decisions (Paneth-Pollak et al. 2010)

3 Coordination of processes across the patient journey at the clinical, administrative and management levels
(Reid et al. 2005; Grossman 2008)

4 Reducing duplication of administration data by providing access to all the team (Australian Nursing
Federation 2007)

Admission assessment
Administration and clinical assessment to determine the type of intervention required for the treatment stage

1-4 As above

Treatment / intervention

9 Standardisation of data elements and information models to ensure semantic interoperability enabling the
implementation of decision support (Beale et al. 2007)

10 Development of precise clinical processes using evidence-based medicine (Christensen et al. 2009;
Fickenscher 2009)

11 Adoption of clinical protocols based on key risk-prone processes (Rotter et al. 2010) that prevent adverse
events by encouraging efforts to drive efficiencies in processes that are highly prone to errors (Department of
Health 2010a; Australian Commission on Safety and Quality in Health Care 2010; Committee on Quality of
Health Care in America, Institute of Medicine 2001; Agency for Healthcare Research and Quality 2010)

12 Identify the right information at the right time for the patient condition (de Graaf et al. 2007)

13 Provide accessibility to consolidated data, information and medical expertise at the point of care, anywhere,
at any time through better use of inexpensive technologies such as mobile devices (Blaya et al. 2007;
Fickenscher 2010)

Referral / discharge

15 Provide cost-effective use of referral documentation for legal, logistics and management of care during the
patient journey (Lisby et al. 2005)

16 Reduce errors in communication between services by ensuring reception of key administration data to the
intended destination (for example, email with certification) (Kohn et al. 2000)

Page 9
Electronic medical record benefits

Continuous optimisation
Currently within the VPHS, it is extremely costly and time intensive to collect accurate and complete data
to identify, develop and implement business (including clinical) process improvements. As a
consequence, this important activity is not undertaken frequently and/or is limited to only specific
processes and interventions.
Implementing an EMR system, where all data is captured and stored in a structured and semantically
well-defined atomic form will enable Victorian public hospitals to readily identify and implement process
improvements. This aligns well with the concept of using continuous business process optimisation
(BPO) to drive process improvements, resulting in better health outcomes and a more efficient
healthcare system.
Vergidis et al. (2008) describe BPO as the automated improvement of business processes using pre-
specified quantitative measures of performance (objectives). The deliverables in this process are
continuously refined and optimised in a basic lifecycle (Figure 5), where the define step includes
defining the organisation's strategic goals and purposes, as well as identifying the organisation's
customers. The measure, analyse, and improve steps of the lifecycle align the business processes to
realise the organisations goals.

Figure 5: Business process optimisation lifecycle

ve

D
o

ef
pr

in
Im

e
An

re
su
al
ys

ea
e

Applying this approach to the VPHS will help to ensure that all clinical and business processes that are
supported by the EMR system may be continuously monitored, optimised and deployed on a local and/or
5
statewide basis as required. Current activities such as the Redesigning Hospital Care Program will be
able to be set up as permanent continuous optimisation programs across the VPHS.

Tip of the iceberg

The quantified benefits identified in Table 2 pertain to reductions of preventable in-hospital complications
and improvements to referral processes. It is anticipated that these benefits represent just the tip of the
iceberg and the full benefits to be gained from widespread use of continuously optimised clinical
pathways will only be understood once an EMR system is operating across the VPHS.

5
See: http://www.health.vic.gov.au/redesigningcare/index.htm

Page 10
During the analysis, we identified an opportunity to estimate the economic benefits that may be realised
through implementing an EMR system. The estimation is based on the extrapolation of two studies:
Rotter et al. (2010) demonstrated that the introduction of clinical pathways reduced preventable in-
hospital complications by up to 42 per cent and found a clear correlation with a decrease in hospital
costs/charges due to improvements in treating infections [sepsis], pneumonia and bleeding (p. 2).
Ehsani et al. (2006) quantified the financial impact that preventable in-hospital complications impose
on Victorian hospitals. Ehsanis key finding was that the average expenditure for preventable in-
hospital complications is $6,826 per admitted episode, resulting in a total cost of $460 million for the
67,435 incidents in 45 major hospitals in 200304 (see Appendix 1 Benefits extrapolation
methodology).
Ehsani et al. (2006) used data from the VAED, and although no statistical analysis was undertaken to
confirm a relationship between the clinical information in the medical record and the VAED data, our
analysis suggests that if one accepts the assumption that an EMR system will make clinical pathways
more easily developed and implemented across VPHS, there could be significant reductions of
preventable in-hospital complications. This assumption is based on well-substantiated evidence (see
pages 5 and 6) that EMR systems will be pivotal in enabling the efficient collection of meaningful,
accurate and complete data that supports active clinical decision support and facilitates the development
and implementation of clinical pathways.
By extrapolating the potential reductions of preventable in-hospital complications and their related costs
based on the above studies, there is an opportunity to reduce complications by 30 per cent (see
Appendix 1: Benefits extrapolation methodology) and achieve a released value of up to $296 million
(Table 4). The released value should not be considered a financial saving, but rather a released capacity
to treat more patients with the same fixed resources.

Table 4: Health economic benefits through reduction of preventable complications

Year Total hospital Preventable Potential reduction in Potential released
6 7
separations complications preventable complications value ($m)
8
200304 979,834 67,435 20,230 $138.09
9
200304 1,141,545 79,637 23,891 $198.39
10
200910 1,375,320 118,970 35,691 $296.38

6
Assuming a 30 per cent reduction of preventable in-hospital complications.
7
Assuming average expenditure for preventable in-hospital complications is $6,826 in 200304 and $8,304 in 200910.
8
20032004 numbers based on the study of 45 major Victorian hospitals by Ehsani et al. (2006).
9
20032004 numbers based on Department of Health VAED data for all reporting Victorian Public Hospitals, excluding ICD-10-AM
diagnosis codes in the O-range (obstetrics).
10
20092010 numbers based on Department of Health VAED data for all reporting Victorian Public Hospitals, excluding ICD-10-
AM diagnosis codes in the O-range (obstetrics).

Page 11
Electronic medical record benefits

Conclusion

Although further evidence is required to confirm a direct link between implementing an EMR system and
the reduction of preventable in-hospital complications, there is growing recognition of the critical role an
EMR system will play in clinical transformation.
The literature provides evidence that an EMR system will be pivotal in enabling the efficient collection of
meaningful, accurate and complete data that supports active clinical decision support and the
development and implementation of clinical pathways.
The literature highlights 16 benefits (Table 1) from both administrative and clinical perspectives that can
be attributed to implementing a health ICT system.
It is anticipated that, once implemented, an EMR solution will improve the ability of VPHS to achieve
sustainable service delivery by providing the facility to measure the effectiveness of processes and to
target improvements to deliver the services more efficiently. The EMR system will enable staff to drive
continuous evidence-based improvements and error reduction programs in the healthcare sector through
clinical transformation to establish a standardised approach for the provision of care with active decision
support.
The result will be an opportunity to continuously optimise our healthcare, significantly reduce preventable
in-hospital complications and thereby achieve reduction in LOS, improve patient outcomes and release
value to treat more patients with the same fixed resources.

Page 12
Appendices

Appendix 1: Benefit extrapolation methodology

Two studies were used to extrapolate the potential benefits that could be achieved by implementing
standardised clinical pathways into the Victorian public hospitals using an EMR system. The studies
(detailed below) are by Ehsani et al. (2006) using VAED data to estimate the cost of preventable in-
hospital complications, and Rotter et al. (2010) on the impact that introducing clinical pathways has on
such complications.
Ehsani study:
Ehsani et al. (2006) demonstrated that the total healthcare cost of unexpected adverse events, or
preventable in-hospital complications, in Victoria reached $460 million in the 200304 financial year.
Ehsani et al. (2006) found that:
6.88 per cent of admitted episodes had at least one adverse event
979,834 admitted episodes in 200304 resulted in 67,435 episodes with at least one adverse event
admitted episodes without an adverse event had an average LOS of 2.49 days, at an average cost of
$2,181
admitted episodes with an adverse event had an average LOS of 12.61 days (or 10 days more than
without adverse events), at an average cost of $14,027.
Once the average cost was adjusted for age and comorbidity, Ehsani et al. (2006) found that the
additional cost for each admitted episode with an adverse event was $6,826.
Rotter study:
Rotter et al. (2010) demonstrated through a comparison of 27 studies from eight countries, spanning the
years 1987 until 2006, that in-hospital complications were reduced by 42 per cent once clinical pathways
were introduced.

Benefit extrapolation
To estimate the potential benefits that could be derived by using an EMR system to introduce
standardised clinical pathways into Victorian public hospitals, the following steps were undertaken:
1. The cost burden of unexpected adverse events was estimated using The incidence and cost of
adverse events in Victorian hospitals 20032004 by Ehsani et al. (2006). The cost identified in
11
the study was adjusted for inflation using the Reserve Bank of Australias inflation calculator to
reach an equivalent additional cost of $8,304 for each admitted episode with an adverse event in
200910.
2. Potential reduction of unexpected adverse events was estimated using Clinical pathways:
effects on professional practice, patient outcomes, length of stay and hospital costs by Rotter et
al. (2010). While acknowledging that clinical pathways are already present across the VPHS, it
has been assumed that a 30 per cent reduction of in-hospital complications may be achieved
through improved ability to standardise, optimise and deploy new evidence-based processes
across the VPHS. This will be particularly true for environments where the clinical pathways are
currently paper-based or non-existent. A 30 per cent reduction of in-hospital complications is
relatively conservative when compared to findings by Rotter et al. (2010).
3. Adjustments were made to accommodate changes to the Victorian prefixing of ICD-10-AM
obstetric diagnosis codes since 200304. All obstetric cases have been excluded to ensure
comparability of the data used for benefits extrapolation.

11
http://www.rba.gov.au/calculator/annualDecimal.html (accessed 31 January 2011)

Page 13
Electronic medical record benefits

It should be noted that, even after removing the obstetrics codes from the data, unexpected
adverse events increased by 33 per cent while the number of separations increased by around
16 per cent. The reason for this increase has not been investigated at the time of writing this
paper.

Benefits extrapolation results

The following tables (Table 5 and Table 6) illustrate the results of the benefits extrapolation using
Department of Health VAED data.

Table 5: Total cost of adverse events in Victoria

Year Total hospital Preventable Average extra cost of Total cost of
separations complications preventable preventable
complications complications ($m)
12
20032004 979,834 67,435 (6.88%) $6,826 $460.311
13
20032004 1,141,545 79,637 (6.98%) $6,826 $543.602
14
20092010 1,375,320 118,970 (8.65%) $8,304 $987.927

Table 6: Health economic benefits through reduction of preventable complications

Year Total hospital Preventable Potential reduction in Potential released
16
separations complications preventable value ($m)
15
complications
17
20032004 1,141,545 79,637 23,891 $198.391
18
20092010 1,375,320 118,970 35,691 $296.378

12
20032004 numbers based on the study of 45 major Victorian hospitals by Ehsani et al. (2006).
13
20032004 numbers based on Department of Health VAED data for all reporting Victorian Public Hospitals,
excluding ICD-10-AM diagnosis codes in the O-range (obstetrics).
14
20092010 numbers based on Department of Health VAED data for all reporting Victorian Public Hospitals,
excluding ICD-10-AM diagnosis codes in the O-range (obstetrics).
15
Assuming a 30 per cent reduction of preventable in-hospital complications.
16
Assuming average expenditure for preventable in-hospital complications is $6,826 in 200304 and $8,304 in
200910.
17
20032004 numbers based Department of Health VAED data for all reporting Victorian Public Hospitals.
18
20092010 numbers based Department of Health VAED data for all reporting Victorian Public Hospitals.

Page 14
Appendix 2: Cited references
Agency for Healthcare Research and Quality 2010, AHRQ study shows using bar-code technology with
eMAR reduces medication administration and transcription errors, viewed 18 January 2011,
<http://www.ahrq.gov/news/press/pr2010/emarpr.htm>.
Ashish K, Doolan D, Grandt D, Scott T, Bates D 2008, The use of health information technology in seven
nations, Journal of Medical Informatics, vol. 77, no. 12, pp. 84854.
Australasian Legal Information Institute (AustLII) 2010, Confidentiality as per Health Services Act 1988
s. 141(3)(e), viewed 27 October 2010,
<http://www.austlii.edu.au/au/legis/vic/consol_act/hsa1988161/s141.html>.
Australian Commission on Safety and Quality in Health Care 2010, viewed 21 May 2010,
<http://www.safetyandquality.gov.au>.
Australian Council on Healthcare Standards 2009, Piloting innovative accreditation methodologies:
patient journey methodologies: final report, Commonwealth Government of Australia, Department of
Health and Ageing on behalf of the Australian Commission on Safety and Quality in Health Care,
Canberra.
Australian Nursing Federation 2007, Nurses and information technology, Commonwealth Government of
Australia, Canberra.
Bates D and Gawande A 2003, Improving safety with information technology, The New England Journal
of Medicine, vol. 348, no. 25, pp. 252634.
Beale T, Chen R, Leslie H, Frankel H, Garde S, Sundvall E, Schuler T, van der Linden H 2007,
Implementing open EHR, Ocean Informatics, presentation at MedInfo, 19 August 2007.
Blaya J, Shin S, Yagui M, Yale G, Suarez C, Asencios L, Cegielski J, Fraser H 2007, A web-based
laboratory information system to improve quality of care of tuberculosis patients in Peru: functional
requirements, implementation and usage statistics, BMC Medical Informatics and Decision Making, vol.
7, no. 33, doi:10.1186/1472-6947-7-33.
Cannaby S, Wanscher C, Pedersen C, Voss H 2004, The cost benefit of electronic patient referrals in
Denmark, published by ACCA and MedCom in collaboration with the European Commission Information
Society Directorate.
Chaudhry B, Wang J, Wu S, Maglione M, Mojica W, Roth E, Morton SC, Shekelle PG 2006, Systematic
review: impact of health information technology on quality, efficiency, and costs of medical care,
American College of Physicians, Annals of Internal Medicine, vol. 144, pp. 74252.
Chen R 2009, Towards interoperable and knowledge-based electronic health records using archetype
methodology, Department of Biomedical Engineering, Linkping University, Linkping.
Christensen C, Grossman J, Wang J 2009, The innovators prescription: a disruptive solution for health
care, McGraw Hill Professional, New York.
Committee on Quality of Health Care in America, Institute of Medicine 2001, Crossing the quality chasm:
a new health system for the 21st century, The National Academies Press, Washington DC.
Council of Australian Governments 2009, National partnership agreement on e-health, Council of
th
Australian Governments 28 meeting, 7 December 2009.
de Graaf J, Vlug A, van Boven G 2007, Dutch virtual integration of healthcare information, Methods of
Information in Medicine, vol. 46, no.4, pp. 45862.
Deloitte 2008, National e-health strategy, National E-Health and Information Principal Committee,
Canberra.
Department of Health 2010a, Patient safety indicators: AusPSI, State Government of Victoria,
Melbourne.

Page 15
Electronic medical record benefits

Department of Health 2010b, HealthSMART HL7 2.4 implementation guide, State Government of
Victoria, Melbourne.
Department of Health 2010c, HealthSMART clinical systems overview, State Government of Victoria,
Melbourne.
Department of Health 2010d, HealthSMART common technology infrastructure overview, State
Government of Victoria, Melbourne.
Department of Health 2011, Victorian Health Priorities Framework 20122022, State Government of
Victoria, Melbourne.
Department of Human Services 2008, Redesigning Hospital Care Program: framework for health
services, State Government of Victoria, Melbourne.
Ehsani J, Jackson T, Duckett S 2006, The incidence and cost of adverse events in Victorian hospitals
20032004, Medical Journal of Australia, vol. 184, no. 11, pp. 55155.
Fickenscher K 2009, Clinical transformation: turning rhetoric into reality, presentation, Indian Institute of
Health Management Research viewed 21 May 2010,
<http://www.iihmrdelhi.org/health%20conclave/DR.%20KEVIN.pdf>.
Fickenscher K 2010, The value of clinical transformation, Strategic Initiatives, Dell Services, viewed 18
January 2011, <http://i.dell.com/sites/content/public/solutions/healthcare/en/Documents/clinical-
transformation.pdf>.
Garde S 2006, Archetypes: the building blocks for electronic health records, Central Queensland
University, presentation, Austin Centre for Applied Clinical Informatics, viewed 18 January 2011,
<www.acaci.org.au/resources/informatics/austin_openEHR_Garde_compressed.pdf>.
Grossman J 2008, Disruptive innovation in health care: challenges for engineering, The Bridge, vol. 38,
no. 1, pp. 1016.
Hauck K and Zhao X 2011, How dangerous is a day in hospital? A model of adverse events and length
of stay for medical inpatients, Imperial College London, London, UK and Monash University, Melbourne,
Australia.
Health Level 7 2010, viewed 18 January 2011, <http://www.hl7.org/>.
Hillestad R, Bigelow J, Bower A, Girosi F, Meili R, Scoville R, Taylor R 2005, Can electronic medical
record systems transform health care?: potential health benefits, savings, and costs, Health Affairs, vol.
24, no. 5, pp. 110317.
HIMSS Analytics 2008, The EMR adoption model (EMRAM), HIMSS Analytics, LLC, viewed 17 June
2011, <http://www.himssanalytics.org/docs/emram.pdf>.
Hopper K and Jacobs P 2009, Halting the sepsis cascade, The Cerner Quarterly, vol. 5, no. 1, pp. 15
23.
Kaplan C 2002, The millions that a major computer manufacturer almost saved, Proceedings of the
Fourth Annual Simulation Solutions Conference, Institute of Industrial Engineers, Norcross, GA.
Kohn L, Corrigan J, Donaldson M 2000, To err is human: building a safer health system, The National
Academies Press, Washington DC.
Lisby M, Nielsen LP, Mainz J 2005, Errors in the medication process: frequency, type, and potential,
International Journal for Quality in Health Care, vol. 17, no. 1, pp. 1522.
Morrison B and Bird B 2003, A methodology for modelling front office and patient care processes in
ambulatory health care, Simulation Conference 2003, vol. 2, pp. 188286.
Murphy E, Oxencis C, Klauck J, Meyer D, Zimmerman J 2009, Medication reconciliation at an academic
medical center: implementation of a comprehensive program from admission to discharge, American
Journal of Health-System Pharmacy, vol. 66, no. 23, pp. 212631.

Page 16
National E-Health Transition Authority 2010a, eHealth: why eHealth?, viewed 16 February 2011,
<http://www.ehealthinfo.gov.au/what-is-e-health/why-e-health/>.
National E-Health Transition Authority 2010b, Data specifications and structured document templates:
guide for use, viewed 24 August 2011, <http://www.nehta.gov.au/>.
Paneth-Pollak R, Schillinger JA, Borrelli JM, Handel S, Pathela P, Blank S 2010, Using STD electronic
medical record data to drive public health program decisions in New York City, American Journal of
Public Health, vol. 100, no. 4, pp. 58690, doi:10.2105/AJPH.2009. 175349.
Reid PW, Compton D, Grossman J, Fanjiang G 2005, Building a better delivery system: a new
engineering/healthcare partnership, Committee on Engineering and the Health Care System, Institute of
Medicine and National Academy of Engineering, The National Academies Press, Washington DC.
Rotter T, Kinsman L, James E, Machotta A, Gothe H, Willis J, Snow P, Kugler J 2010, Clinical pathways:
effects on professional practice, patient outcomes, length of stay and hospital costs, Cochrane Database
of Systematic Reviews, vol. 3, art. no. CD006632, doi: 10.1002/14651858. CD006632.pub2.
Schuler R 2010, The smart grid: a bridge between emerging technologies, society, and the
environment, The Bridge, vol. 40, no. 1, pp. 4249.
Standards Australia Limited 2010, Standards Australia eHealth, viewed 18 January 2011,
<http://www.e-health.standards.org.au/Home/Publications.aspx>.
Vergidis K, Tiwari A, Majeed B 2008, Business process analysis and optimization: beyond
reengineering, IEEE Transactions on Systems, Man, and CyberneticsPart C: Applications and
Reviews, vol. 38, no. 1, pp. 6982.

Page 17
Electronic medical record benefits

Appendix 3: Other references

Australian Bureau of Statistics 2008, Population projections, Australia, 2006 to 2101, cat. 3222.0
Australian Government, Canberra.
Australian Institute of Health and Welfare 2009, Australian hospital statistics 200708, Health services
series, no. 33, cat. HSE 71, Canberra.
Bartlett C, Boehncke K, Wallace V, Johnstone-Burt A 2010, Optimising e-health value: using an
investment model to build a foundation for program success, Booz & Company Inc., viewed 21 May
2010, <http://www.booz.com/media/file/Optimising_e-Health_Value.pdf>.
Calver J, Brameld KJ, Preen DB, Alexia SJ, Boldy DP, McCaul KA 2006, High-cost users of hospital
beds in Western Australia: a population-based record linkage study, Medical Journal of Australia, vol.
184, no. 8, pp. 39397.
Canada Health Infoway 2009, Making health information work better for Canadians, Corporate Business
Plan 20092010, viewed 26 May 2010, <http://www.infoway-inforoute.ca/flash/ar-bp/en/bp/index.html>.
Commonwealth Government of Australia 2010, Budget 201011, part 2: expense measures, viewed 24
May 2010, <http://www.budget.gov.au/2010-11/content/bp2/html/bp2_expense-13.htm>.
Department of Health 2009, Definitive data report 200809, Funding Policy and Data Hospital and Health
Service Performance Division (internal use only), State Government of Victoria, Melbourne.
Department of Health 2010e, Better skills, best care: workforce design strategy, State Government of
Victoria, Melbourne.
Department of Human Services 1998, PRS/2 manual part A: definitions and system parameters, State
Government of Victoria, Melbourne.
Eber R, Laxminarayan R, Perencevich E, Malani A 2010, Clinical and economic outcomes attributable to
healthcare-associated sepsis and pneumonia, Archive of Internal Medicine, vol. 170, no. 4, pp. 34753.
Gogler J, Hullin C, Vaughan V, Searle C 2010, The chaos in primary nursing data: good information
reduces risk, Electronic Journal of Health Informatics, vol. 5, no. 1, e. 6.
Health Information Technology 2010, Electronic health records and meaningful use, The Office of the
National Coordinator for Health Information Technology, US Department of Health and Human Service,
Washington DC.
HISA 2010, Health Informatics Society of Australia, viewed 9 June 2010, <http://www.hisa.org.au/>.
Hugh L 2010, Electronic medication management, Health informatics an overview, IOS Press,
Amsterdam, pp. 15768.
Kaiser Permanente 2010, Kaiser Permanente completes electronic health record implementation, press
release, 3 March 2010, viewed 26 May 2010,
<http://xnet.kp.org/newscenter/pressreleases/nat/2010/030310ehrcomplete.html>.
Kolodner R 2005, Statement of Robert M. Kolodner, US Department of Veterans Affairs, viewed 26 May
2010, <http://www4.va.gov/OCA/testimony/hgrc/050929RK.asp>.
KPMG 2009, Health workforce in Australia and factors for current shortages, Australian Health
Workforce Taskforce, viewed 20 May 2010, <http://www.nhwt.gov.au/publications.asp>.
Krizner K 2004, Clinical transformation initiative starts with a total vision, Managed Healthcare
Executive, viewed 24 May 2010,
<http://managedhealthcareexecutive.modernmedicine.com/mhe/Technology/Clinical-transformation-
initiative-starts-with-a-t/ArticleStandard/Article/detail/127457>.

Page 18
McGrath K, Bennett D, Ben-Tovim D, Boyages S, Lyons N, OConnell T 2008, Implementing and
sustaining transformational change in healthcare: lessons learnt about clinical process redesign, Medical
Journal of Australia, vol. 188, no. 6, pp. S3235.
Mental Health Council of Australia 2007, Access to health services by people with mental illness,
Australian Human Rights Commission, viewed 20 May 2010
<http://www.hreoc.gov.au/disability_rights/health/mhca.doc>.
National e-Health Transition Authority 2010c, NEHTA sets direction for electronic messaging in health,
viewed 24 May 2010, <http://www.nehta.gov.au/media-centre/nehta-news/423-nehta-sets-direction-for-
electronic-messaging-in-health>.
National e-Health Transition Authority 2010d, Coordinated care: what is a PCEHR?, viewed 6 October
2010, <http://www.nehta.gov.au/coordinated-care/what-is-a-pcehr>.
Nictiz 2008, eHealth in the Netherlands, National IT institute for Healthcare, Netherlands.
PM Hut 2010, Project management approach for business process improvement, viewed 24 May 2010,
<http://www.pmhut.com/project-management-approach-for-business-process-improvement>.
Wikipedia 2010, VistA, viewed 26 May 2010, <http://en.wikipedia.org/wiki/VistA>.
Wikipedia 2010, Business process improvement, viewed 24 May 2010,
<http://en.wikipedia.org/wiki/Business_process_improvement>.
WorldVistA 2010, VistA History, viewed 26 May 2010, <http://worldvista.org/AboutVistA/VistA_History>.
Young P, Olsen L, McGinnis J 2010, Value in healthcare: accounting for cost, quality, safety, outcomes,
and innovation, Roundtable on evidence-based medicine, Institute of Medicine, The National Academies
Press, Washington DC.

Page 19