Middleware_ROI_interest

Middleware_ROI_interest - Page 1 of 7 Middleware sparks...

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Middleware sparks renewed ROI interest February 2007 Feature Story Anne Paxton Return on investment is a classic finance ratio—money gained or lost compared with money invested—that evolved long before there was such a thing as information technology. When companies calculate ROI, they are usually talking about capital outlays for nuts-and-bolts products that—as the expression goes— when you drop them on your foot, it hurts. It may not take a giant leap of faith for laboratories to spend money on a laboratory information system or other software. But the means to link savings or revenues to the purchase generally haven’t been there. With the growing popularity of middleware—most frequently defined as software modules that sit between laboratory instruments and the LIS—it’s getting much easier to make that link, says Bruce A. Friedman, MD, a well-known IT consultant who coined the term “pathology informatics” in 1990. “It’s very difficult to assign a dollar value to much of the functionality and benefits flowing from a classic LIS, which is a broad suite of applications including test ordering, test resulting, and quality control,” says Dr. Friedman, active professor emeritus, University of Michigan Medical School. “You can propose a figure and then defend it by stating all the assumptions that entered into the calculations, but people are always going to resist the more subjective of them. Let’s say you can definitively show that automating laboratory processes with an LIS results in a reduction of laboratory errors by eight percent, so then what is the dollar value of avoiding one error?” But now that more laboratories are sticking with their older LISs and just buying middleware—which has more focused and frequently more objective benefits— “there has been a resurgence of interest in return on investment calculations for laboratory software,” Dr. Friedman says. One of the primary functions of middleware, autoverification, is a good example. “With autoverification, much of the checking of test results immediately prior to reporting on an automated line in hematology or chemistry that previously required a med tech disappears. You can just do a ‘before and after’ comparison and calculate the lesser manpower requirements couched in terms of FTEs [full-time equivalents], which translates very quickly into financial benefits.” Personnel savings like that, or reduced cost of materials—by avoiding rejects on assembly lines, for example—are objective savings, he says. The value of a safety measure or an “error that is avoided” is a more subjective judgment. Page 1 of 7 03/03/2007 ..
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Unfortunately, at most hospitals, the laboratory’s feet often get held to the ROI fire while other cost centers may appear to get a free pass, he notes. “When the CIOs and CEOs are writing checks for their personal projects, they don’t feel as cost-
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Middleware_ROI_interest - Page 1 of 7 Middleware sparks...

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