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Computations and ROI Calculations Comparative Cost Analysis
A
comparison of the costs of transcribing text from Direct Dictation or Tape Dictation using Automatic Speech Recognition (ASR) versus the savings from not using an external transcription service bureau is detailed below.
Return on Investment
A ROI financial computation should be made to justify any ASR deployment. ROI is defined as: Present value of all savings from the proposed investment during it's life
Present value of the equipment deployment costs during the investment life The components of the above equation are: Savings
This can be quantified into tangible out-of-pocket costs and intangible savings from improved staff productivity, better turnaround time of records, etc. One easily measured tangible cost savings would be the total sums paid out to an outside transcription service bureau in a year for a specified physician, group or medical practice. The total savings should be for the expected life of the capital equipment.
Deployment Costs These can be categorized as: Equipment and Associated Support Costs and Direct Personnel Costs. These are further defined as follows: Equipment and Associated Support Costs
Ÿ Capital investment in ASR Workstations, tape recorders, wireless mics, etc. (Lease over the life
of the equipment or a one time acquisition)Ÿ Licenses for ASR software and specialized
vocabularies (One time charge or amortized over the life of the above equipment) Ÿ
Installation, training & instruction for personnel (One time initial charge or amortized over the life of the above equipment) Ÿ Software maintenance - Upgrades & Enhancements (Recurring annual charge over the life of the above equipment) Ÿ
Hardware maintenance - Repair and Service (Recurring annual charge over the life of the above equipment) Ÿ User support/help - Ongoing user support & troubleshooting (Recurring annual charge over the life of the above equipment)
Personnel Costs
Of some significance is how to classify an internal Transcription Aide's salary. Should the individual be considered primarily a transcriptionist or can an existing clerk or
receptionist be called upon to perform the now less demanding 'ASR Transcriptionist' duties. This will require some judgment in the ROI calculations and/or new job descriptions to match these 'new' duties. This
would be a recurring wage amount over the life of the above equipment. Some of the practices are using non-transcriptionist personnel (even high school students) to perform the proof reading and making the
corrections for mis-recognitions.
Preliminary ROI - Direct Dictation
A simplified calculation could be based upon an assumption that all physicians dictate directly into the PC and there are no tape recorders or
internal transcribing to be done. Therefore:
Savings
Assume the elimination of an average annual outside transcription cost per physician of $8,000. The total savings for a 3 physician practice would be $24,000.
Equipment Costs
Capital Investment of hardware ($5,250 - 3PCs), software ($4,800 and services ($3,600) for a total of $13,650. First year cost of support for 3 Drs. is $350x3 or $1,050.
ROI calculation = $24,000 divided by ($13,650+$1,050=$14,700) or 163.3% in the first year. The ROI calculation for years 2, 3 and 4 would be $24,000 divided by $1,050 or
2,285% per year or an average of 537.8% over the life of the equipment (4 years).
Preliminary ROI - Tape Dictation with Inside Transcribing by Staff
This calculation is based upon an assumption that all physicians dictate into tape recorders which are 'played' into a single
Transcription Workstation PC. Staff then proof reads and makes corrections. Therefore:
Savings
Assume an average annual outside transcription cost per physician of $8,000. The total savings for 3 physicians would be $24,000..
Equipment Costs
Capital Investment of hardware ($1,800 for one PC, $1,800 for recorders), software ($1,690) and services ($5,000) for a total of $10,290.
First year cost of support for 3 Drs. + one aide is 4x$350 or $1,400.
Personnel Costs
Assume that the internal staff's labor cost is 40% (conservative estimate) of the outside service bureau or $3,200 /physician /year or $9,600. These costs are not out-of-pocket costs and could be considered indirect costs if staff workload isn't full.
ROI calculation
= $24,000 divided by ($10,290+$1,400+$9,600=$21,290) or 112.7% in the first year. The ROI calculation for years 2, 3 and 4 would be $24,000 divided by $11,000 or 218% per year
or an average of 176.8% over the life of the equipment (4 years).Note: The productivity of Outside Transcription Services is: One hour of dictation requires 4 hours of typing. Automatic Speech
Recognition with high recognition accuracy (above 96%) will reduce the transcribing time to 90 minutes or less.
Intangible Benefits
Some benefits of speech recognition may be intangible. These could be:
Improved accuracy (lack of misspellings)
Quick turn-around-time of work
Ability to automate the office workflow (faxing of documents, printing of
correspondence, etc.)
Less repetitive hand stress on internal typists.
Tradeoffs of Tape Dictation vs Direct Dictation
Tape dictation does not permit automatic creation of electronic medical records (EMR). The only way this data can be integrated into computer
databases is by staff data reentry. Direct dictation by the medical professional, while sometimes interpreted as 'slowing down' or inhibiting the productivity of the dictator, in the long run saves more money,
producing a higher ROI and smoothly integrating with the automatic creation of patient notes, referral letters, SOAP notes and consultative reports while eliminating staff labor, letterhead and postage. Return to Top
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