Optimising e-health value: Using an investment model to build a foundation for program success

Published: May 7, 2010

Executive summary

Electronic health (e-health) initiatives that apply information technology to the delivery of healthcare services for patients and management of clinical information are an essential weapon in the battle against the rising costs and other systemic problems in healthcare. For all their promise, however, the introduction of such initiatives has been a slow and arduous process in many healthcare systems.

Large e-health programs are often severely hampered by ill-defined user requirements, low levels of stakeholder engagement, slow solution adoption rates among providers, and an unwillingness to invest the often large amounts of capital required. When e-health programs have successfully moved into their development and implementation phases, they often encounter massive cost overruns and schedule delays.

These problems often cause e-health initiatives to bog down and fail, but they can be overcome. The solution begins with a customisable investment model that can help guide policymakers as they seek to define, implement, and gain acceptance of viable e-health programs. Such a model must yield a multidimensional business case that accurately calculates and compares the different types of benefits that can be achieved, the value of various e-health applications, the stakeholder groups that will incur related costs, and the stakeholder groups to which the benefits will accrue. This then allows transparent engagement with stakeholders, appropriate design of incentive structures, and a program focus on those components with the potential to rapidly deliver benefits.


  • Developing a business case for any major reform of a complex networked system such as healthcare requires a holistic approach to determining the costs and benefits derived by multiple stakeholders.
  • Investment in comprehensive e-health programs can lead to substantial savings in annual national healthcare expenditures (in the case of Australia, this will equate to a conservatively estimated AU$7.6 billion in 2020 alone, representing 3 percent of the nation’s total healthcare expenditures, given current trends). These numbers only reflect direct savings in healthcare expenditures and do not include economic flow-on effects, which can also be substantial.
  • The largest type of benefit from e-health is the reduction of adverse drug events caused by the lack of access to pertinent patient information at the point of care.
  • Of the core e-health applications and capabilities, the one with the greatest benefits is medication management. Other capabilities, such as quality and performance management and electronic medical records (EMRs), offer significant but secondary benefits.
  • The implementation of e-health capabilities in primary care drives the majority of systemic benefits. However, these benefits are not realised in the primary care setting itself but flow on to acute settings through the avoidance of hospital visits.
  • E-health is an essential factor in modern healthcare reform. It has the potential to reduce the overall pressure on patients, providers, and payors; enable quality and performance measurement; and enhance capabilities.


Optimising e-health value: Using an investment model to build a foundation for program success

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