Electronic Health Record Systems Investment Valuation: A System Dynamics Approach

Implementing Electronic Health Record (EHR) systems is on the agenda for most of the healthcare organizations in the next few years. Decision makers need to do a cost-benefit analysis to value EHR investments. The major question for decision makers is what the benefits of such systems are. We propose the use of System Dynamics (SD) to measure the benefits of EHR systems. A System dynamics approach as a predictive tool maps complex relationships among the healthcare processes into a model by which one can dynamically measure the effect of any changes in the parameters over time. The System dynamics model's objective is to analyze the impact of EHRs in a healthcare setting during and after its implementation. Simulation of EHR implementations using system dynamics model produces useful data on the benefits of EHRs that are hard to obtain through empirical data collection methods. The results of an SD model then can be transformed into economic values to estimate financial indices.