Carlos Albizu University Miam

Greetings

I am working on series of papers for a project under the title of Return on Investment (ROI). so far I have written these papers but the professor asked me to fix some things in Phase 2&3, also he asked me to fix Phase 4 as I got 1 out of 20.

You will find what I wrote (Phase 1 to 4) in the attachments and the outside reading for phase 3.

The requirements:

1- Rewriting and editing Phase 4 according to the Assignment requirements and the professor comment.

2- Fixing and adding things in Phase 2 and 3 as the comments show ( adding to the papers what the professor asks for).

Phase 4 Assignment:

This week’s assignment is the fourth short paper component of our ROI project. The focus of this week’s writing will be to consider the value and steps necessary in preparing a “look back analysis” or a post implementation audit on the particular project that a ROI for both “hard and soft” information that has been prepared (usually prepared 8 to 12 months after the project is up and running). The purpose of the review is to determine if the information initially submitted was correct and the predicted outcomes occurred and what specific lessons can be learned to improve the analysis. To complete this review you will need to create a scenario of an outcome and apply the information outlined in the assignment. Please see the attached two reference sources for examples of this process.

Eight steps for a successful post-implementation audit. (2003, October 01). CIO, http://www.cio.com/article/29818/Eight_Steps_for_a_Successful_Post_Implementation_Audit (Links to an external site.)

Levinson, M. (2003, October 01). How to conduct post-implementation audits. CIO, http://www.cio.com/article/29817/How_to_Conduct_Post_Implementation_Audits

This is the Professor’s comment for phase 4:

Good fact base on how to conduct a review, what I was looking for were the results of the review of our phase 3 project as presented to the board. Since eight months has passed and the project is up and running how accurate were our projections? Is there an adjustment needed? Or should the project be abandon? Review the eight steps for a successful post implementation audit referenced in the assignment, discuss the results of the steps and consider including in your resubmission for a grade adjustment for this assignment.


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This is the Phase 2 Assignment:

The assignment this week will be the second short paper on Return on investment with a focus on the steps recommended for building the documentation for the justification of a “soft return(Soft costs include risk avoidance, client goodwill, patient safety, process improvement, and regulatory compliance and support costs) and the gathering of metrics with the intention of estimating the financial benefits expected from the project.

There are three steps in documenting soft returns, which are identifying a process improvement opportunity, create a formula to calculate the benefits, and determine the costs of the process and the net benefits. Soft costs include risk avoidance, client goodwill, and support costs.

Many projects in healthcare today require large outlays of capital for electronic health records, clinical information systems whose return on investment is not easily documented with new revenues and operating expenses but from a quality standpoint are wanted and needed.

In your research, consider what would be needed to support a capital acquisition that would improve efficiency, quality, customer satisfaction, and overall effectiveness within the organization. Also, would a project management office establishment be of any assistance in monitoring the project?

This is the Professor’s comment for phase 2 :

Thoughtful presentation, and well written, I was unable to locate your actual calculation and estimated soft cost savings in your presentation. Check out our class presentation from our recent Zoom class presentation for examples. For your final Phase 6 presentation please consider an example of a formula and expected benefits with your submission

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This is the Phase 3 Assignment:

This week’s assignment is the third component of our ROI project. The focus of this week’s short paper writing will be to consider the justification of the capital expenditure. Three key aspects should be considered: (1) Amount and type of expenditure (2) Attainment of key decision criteria (3) Detailed financial analysis.

Using pro-forma data taken from our outside reading “A Cost Benefit Analysis- Bardon, C. G., Wang, S. J., Middleton, B., Prosser, L. A., Spurr, C. D., Carchidi, P. J., et al. (2003). The American Journal of Medicine ,114.)” prepare a net present value analysis by calculating a hurdle rate, profitability index, for you capital project. Do not consider capital cost reimbursement from third-party payers in your calculation.

Finally, consider in your writing how you would factor risk such as technology change, Physician acceptance, competition from other HCO’s, accuracy of market data and volume projections associated with the capital project (see attached hurdle rate determination worksheet below) in your discount rate.

Net Present Value Discount Rate (Hurdle Rate) Determination Worksheet

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The following analysis can be used to determine the NPV Discount Rate (Hurdle Rate) Determination.

  1. Risk Free Rate 6%

(free cash flows-cash flows that are available to stakeholders (e.g., equity and debt holders) after consideration for taxes, capital expenditures, and working capital needs).

Adjustment for Risk

  1. Intrinsic risk of a specific business (little or no risk) 0–4%
  • Changing technology
  • Physician implications
  • Changing reimbursement
  • Hospital management expertise
  • Competition considerations
  1. Position on continuum of life cycle (low to moderate risk) 0–3%
  • Recent development, new to area
  • Established and accepted service; success predicated on

Garnering other’s market share

  1. Unique risks to the program/service (moderate to higher risk) 0-4%
  • Accuracy of market data and volume projections
  • Risk of failure to meet targeted volume
  • Sensitivity of pro forms to deviation from forecast assumptions
  • Projection and/or pay back method
  1. Projects with unacceptable risks (higher risk) 0-20%
  • Range of Discount Rates for use in determining the Net Present

Value of Future Cash Flows _______

6-21%


This is the Professor’s comment for phase 3

Research and documentation for Phase 3 well done! I suspect behind the scenes this type of analysis was successfully used to bring the project on line. With cash as a scarce resource the NPV analysis becomes a useful tool to use to select the project that meets both the quantitative and qualitative needs of the organization. P.S. unable to locate your profitability analysis. Be sure to include in your Phase 6 submission.

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