Physician Family Clinic

Business Case
Daniel Schwartz
November 18, 2018
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Business Case

Introduction
The Business Case Analysis is being conducted for the Physician Family Clinic because the internal medicine
private practice needs to determine the costs and benefits of expanding and upgrading the practice, as well as
purchasing the latest Health Information Technology (HIT). Purchasing HIT will potentially provide the practice
with efficient medical record keeping, an effective patient check-in process, reduced patient waiting time, efficient
and rapid patient billing, accurate and reliable laboratory testing results and record keeping, accurate follow-up
appointment scheduling and reliable prescription refill capability.
The method used in this Business Case Analysis will be a modified Six Sigma approach. By defining the problem,
analyzing the problem, improving the process by removing the root causes of the problem and controlling to
prevent the original problem from recurring again. By enhancing and upgrading the Physician Family Clinic’s
practice, the root causes of the administrative errors and lack of patient/provider/billing communications will be
removed.

Vision
The Physician Family Clinic will enhance its patient care capabilities by providing efficient patient check-in
procedures, modern, up-to-date electronic medical records storage and creation of an in-house medical billing
system. Additionally, the Physician Family Clinic’s vision is to expand its practice by adding physicians and
purchasing space for physical therapy.

Description of the Current Situation

The Physician Family Clinic was opened in 38 years ago. The current situation at the Clinic is that the important
processes that run the clinic are paper-based (medical records, laboratory results, patient billing, prescription drug
refill orders, etc.). The only computer-based process is the patient billing, which is dependent on third-party
billing. Additionally, because of the paper-based processes, there have been a large number of errors and/or
misplaced medical records. Another significant issue is that, because of the administrative workload, patients’
checking in have experienced waiting times of 1-2 hours.

Assumptions and Constraints

The Physician Family Clinic staff, including Dr. Ramos, is not familiar with and has not been trained in the latest
Health Information Technology (HIT). According to the Information Exchange in Integrated Care Models: Final
Report (2015), published by the U.S. Department of Health & Human Services, a Final Report, integrated care
(which is goal of the Physician Family Clinic), refers to the “bringing together of inputs, delivery, management
and organization of serves as a means of improving access, quality, patient outcomes, user satisfaction and
efficiency.” Additionally, the Final Report stated that “by and far the most common methods of information
exchange with providers remains phone, fax and hardcopy.”
In order to improve patient outcomes and gain efficiency in patient care and recording keeping process, the
Physician Family Clinic will need to invest in current information technology and gain access to providers in the
same field of medicine as well as providing up-to-date electronic billing system services.
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The constraints for the Physician Family Clinic are the start-up costs of the HIT, length of time allocated for
training the staff, obtaining the right technology and medical applications and the capability of the staff to learn
and apply the new processes.

Identification and Analysis of Options Considered

Option 1: Do nothing.
This Option is rejected because the Physician Family Clinic is significantly behind in applying up-to-date
information and computer technology for its patients. The Physician Family Clinic is continuing inefficient
process that are prone to error. The average patient waiting time is 1-2 hours which could possibly lead to a
reduction in the number of patients. The paper-based process may, at worst, cause a patient harm by delaying
his/her treatment of prescription drugs and the inefficiency of the filing system may cause either loss or misplaced
records. By “doing nothing”, the Physician Family Clinic is not staying current with medical/electronic
technology trends and/or effective communication with their patients and providers/physicians in the same or
similar medical field.

Option 2 - An option that would achieve the same result as the preferred option
This Option is rejected because a partial solution, to achieve the same or similar result, may not result in improving
the efficiency of the practice. Efficiencies will be gained by completing investments in HIT and training staff on
the latest technologies and application. Unless sufficient funds are received, hiring additional staff occurs and
potentially adding physicians (including one physician for physical therapy), this Option will not provide the
changes that will meet the goals and objectives of the Physician Family Clinic.

Option 3 - The preferred option

Option 3 is the preferred Option because the Physician Family Clinic is not conforming with the needs of its
patients and the medical information exchange community, based on the integrated care model (patient
communication, provider and electronic billing systems). The preferred Option is to seek and secure funding to
purchase computers, laptops, servers and medical application software in order quickly and accurately record
patient’s medical examinations, medical histories, laboratory results, patient billing and history, prescriptions for
patient’s drugs and follow-up examinations and appointments.

The preferred Option fills the information exchange gap and eliminates the root causes in the inefficiencies of the
practice. By applying the latest technology in Electronic Health Records (EHR), the practice can exchange
information with external sources in case its patients need other treatment. The latest technology will provide the
practice with developing a website where the patient can check-in, send secure e-mails, discuss an issue with the
physician and schedule the next appointment or follow-up.

The preferred Option also fulfills the regulatory-related policy gap that the physician may not be aware of. By
having access to websites that provide the latest patient care, regulatory and physician insurance information, the
practice can maintain its currency without having to place calls, send faxes, or send hardcopies of insurance,
patient or regulatory compliance.

Finally, the preferred Option, if successfully executed, can create profit for the practice to re-invest in order to
achieve its goals of adding physicians, buying additional space and providing patients comprehensive treatment
by offering physical therapy.
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Option Description Benefits / Costs Risks Stakeholder Issues

Dis- Impact
benefits
1 Do nothing None-continue Low Potential Negative Not having modern
inefficient loss of technology
processes patients
2 Same result Better patient Medium Not all Positive Funds will be used for
services patient and processes that will not
information gain the desired
processes outcome
improved
3 Preferred Higher quality High Staff Positive Adequate funds may
patient services start-up learning not be obtained and
costs curve and an alternative option
applying may need to be added
new
technology

Analysis of Cost and Benefits

COSTS:
*TANGIBLE COSTS (for the Preferred Option – shared by **3 physicians)

Current Year 2 Year 3 Year 4 Total

Year

A. Electronic $25,000 $25,000

Medical Records
(EMR): One-time
hardware cost

EMR: One-time $21,000 $21,000

hardware cost –
individual
physicians (3)

EMR: Software $85,000 $85,000 $85,000 $85,000 $340,000

and maintenance
costs (Annual)

EMR: Labor costs $10,000 $10,000 $10,000 $10,000 $40,000

– transferring
data

EMR: Labor costs $35,000 $35,000

– implementation
team and training

B. Electronic Health $13,200 $13,200 $13,200 $13,200 $52,800

Record (EHR) –
subscription

C. Medical billing $20,000 $10,000 $10,000 $10,00 $50,000

systems
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D. Staff salaries $100,000 $150,000 $150,000 $150,000 $450,000

(Nurse and
admin)

E. Furniture, $25,000 $15,000 $15,000 $15,000 $70,000

equipment,
copiers,
computers,
telephones,
medical supplies,
insurance and
other operational
costs

*Not including physician salaries

**Adopted from cost estimate, Cost of EMR Adoption Through First 60 Days, retrieved from
https://www.americanactionforum.org/research/are-electronic-medical-records-worth-the-costs-of-implementation

INTANGIBLE COSTS

Current Year 2 Year 3 Year 4 Total

Year

A. Staff learning curve – $20,000 $10,000 $5,000 $5,000 $40,000

new technology

B. Loss of productive $40,000 $20,000 $10,000 $5,000 $75,000

hours – training on
new technology

C. Advertisement for $5,000 $1,000 0 0 $6,000

new patients and
physicians

BENEFITS:
*TANGIBLE BENEFITS

Current Year 2 Year 3 Year 4 Total

Year

A. Replaces paper- $100,000 $150,000 $200,000 $250,000 $700,000

based medical
charts, streamlines
billing, ordering
prescriptions and
laboratory tests,
managing the
practice and
communicating
with patients
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B. Increase in the $50,000 $70,000 $90,000 $110,00 $320,00

number of
patients/physicians
– increase profit

C. Efficiency in $20,000 $25,000 $30,000 $35,000 $105,000

patient care

*Assume increase in the number of physicians and a significant increase in the number of patients

INTANGIBLE BENEFITS

Current Year 2 Year 3 Year 4 Total

Year

A. Developing an $25,000 $30,000 $35,000 $40,000 $130,000

integrated
information exchange
for the practice

B. Shortens workload $10,000 $5,000 $3,000 $1,000 $19,000

overtime/weekends

C. Improves patient $5,000 $7,500 $10,000 $12,500 $35,000

satisfaction and gains
“word of mouth”
potential patients

Impact Assessment
Option 1 impact: Continued inefficiency with current patient care process. With one (1) physician and two (2)
nurses who rotate administrative and patient visits, the Physician Family Clinic is currently ineffective in
delivering satisfactory patient care, medical records keeping, use of in-house billing systems and proper patient
follow-up and prescription filling. The clinic is paper-based and therefore prone to administrative errors. The
impact is a very limited for potential in the number of patients, physicians who might want to join the practice
(because it is paper-based) and limited incentive for a government agency to provide a loan to expand the practice.
Option 2 impact: Option 2 would only provide minimal results and may have a small impact on the practice.
The Option entails moderate investment in the practice and upgrading some of the areas that need to be improved
and eliminates most or all of the current inefficiencies.
Option 3 impact: The Option 3 impact is the highest level of positive impact of the three options. With sufficient
investment (from government, private loans or new physician investment) the practice will gain enough
efficiencies have current integrated information exchange, electronic health record, medical record storage, an in-
house patient billing system, an electronic capability to record and store, accurate and reliable laboratory tests
and communicate with its patients through a website for accessing patient schedule and online, timely physician
consultation. This Option provides the practice to expand and upgrade their patient care by gaining profit and
potentially re-investing in additional space and additional types of patient care. This Option also provides a
vehicle to increase the number of patients, physicians and additional trained staff.
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Risk Assessment
Risk Description Impact Probability Countermeasure Ownership
Assessment (L ,M, H) (Mitigation)
1. Obtaining Small practice – Large High Market research – Ownership of
funding may be not yet contact with the Physician
difficult upgraded governmental agencies Family Clinic
2. Lack of Practice does Large High Purchase All physicians,
availability of not have current hardware/software and nurses and staff
electronic medical information train staff and
records technology physicians
3. Adaptability to Physicians, Medium Medium Develop a planned All physicians,
new technology nurses and staff schedule for on-the-job nurses and staff
have not used training
the new
technology
4. Loss of potential Limited number High High Increase the number of Potential
revenue – of patients physicians and provide physician
motivation to join up-to-date patient care
private practice
5. The Clinic does The Clinic does Medium Medium Create a website for Staff
not have a website not offer a Clinic information and
website for specialties(s)
potential
patients
6. Physicians might Current trend is Medium Medium Outline expansion and Dr. Ramos and
not want to join a for new upgrade as well as nurses
private practice physicians to potential for new
join hospitals patients
7. Not enough staff Increased Medium Medium Develop a plan for Clinic
for increased number of patient care and employees
number of patients patients and establish a training
adjusting to schedule outside peak
new technology patient visiting hours
may slow the
learning process

Recommendations
This Business Case Analysis for the Physician Family Clinic was conducted in order to define and analyze the
problems facing the Clinic’s current patient care process. The Clinic does not have current medical and health
record technology while paying for a third-party billing system. The patient check-in process is inefficient and
patients are subjected to long waiting times prior to seeing the physician.
Based on three (3) Options summarized in this Business Case, Option 3 is the preferred option, based on
potential funding and investments and improved patient record keeping and patient care
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Option 3 Gantt Chart (notional) – Physician Family Clinic (Tableau)

Appendices and Supporting Information

No appendices
Note: The Gantt Chart was developed using Tableau and is notional, based on a 3-month project and dependent
on funding
Supporting Information:

Paul, Cadle and Yeats, (ed.), 2014, Business Analysis, 3rd Edn. BCS Learning & Development Ltd., Swindon, U.K.,
Pages 148-149 (Six Sigma) and Pages 168-176 (Structure of a Business Case)
Terry, K. (ed.), (2003, May 9), Going solo: Start-up basics, Medical Economics, Retrieved from
http://www.medicaleconomics.com/practice-management/going-solo-basics

U.S. Department of Health & Human Services (2015), Information Exchange in Integrated Care Models: Final Report,
retrieved from https:aspe.hhs.gov/basic-report/information exchange-integrated-car-models-final-report
Uzialko, A., (2018, June 19), Choosing the Right EMR System: A Buyer’s Guide, Business News Daily, retrieved from
https://www.businessnewdail.com/8578-choosing-an-ehr-system-for-your-medical-practice