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First published October 18, 2004 as JAMIA PrePrint; doi:10.1197/jamia.M1553
Journal of the American Medical Informatics Association 2005;12(1):20-27
© 2005 American Medical Informatics Association

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Submitted on February 8, 2004
Accepted on September 2, 2004

Implementation of Hospital Computerized Physician Order Entry Systems In a Rural State: Feasibility and Financial Impact

Robert L. Ohsfeldt1*, Marcia M. Ward1, John E. Schneider1, Mirou Jaana1, Thomas R. Miller1, Yang Lei1, and Douglas S. Wakefield1

Affiliation of the authors: 1 Department of Health Management and Policy, College of Public Health, University of Iowa, Iowa City, IA

* To whom correspondence should be addressed.

Objective To estimate the costs of implementing computerized physician order entry (CPOE) systems in hospitals in a rural state, and to evaluate the financial implications of statewide CPOE implementation.

Methods A simulation model was constructed using estimates of initial and ongoing CPOE costs mapped onto all general hospitals in Iowa by bed size and current clinical information system (CIS) status. CPOE cost estimates were obtained from a leading CPOE vendor. Current CIS status was determined through mail survey of Iowa hospitals. Patient care revenue and operating cost data published by the Iowa Hospital Association were used to simulate the financial impact of CPOE adoption on hospitals.

Results CPOE implementation would dramatically increase operating costs for rural and critical access hospitals in the absence of substantial costs savings associated with improved efficiency or improved patient safety. For urban and rural referral hospitals the cost impact is less dramatic but still substantial. However, relatively modest benefits in the form of patient care cost savings or revenue enhancement would be sufficient offset CPOE costs for these larger hospitals.

Conclusion Implementation of CPOE in rural or critical access hospitals may on net increase operating costs. Adoption of CPOE may be financially infeasible for these small hospitals in the absence of increases in hospital payments or ongoing subsidies from third parties.




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