Preparedness and Response Blog

The ROI on Being Prepared - Identifying Data Inputs

Written by Intermedix Staff | May 28, 2015 5:29:00 PM

The Assistant Secretary for Preparedness and Response, or ASPR, office recently shared a study published by the Society for Disaster Medicine and Public Health, Inc. that highlights the return on investment on establishing emergency preparedness programs at health care facilities. As a part of the study, a cost-benefit analysis was performed on the data of 17 real-world events the society responded to between 2008 and 2013.  

 The study ultimately concluded that:

  1. The use of big data analytics can help decision makers better understand the value of emergency preparedness;
  2. A regional, centralized emergency response model minimizes the risk associated with transport patients and maintenance of facility operations and;
  3. The cost-benefit analysis showed a positive return after six years of investing in the regional emergency response team.

This studies opens doors for hospital emergency managers to have concrete evidence to point to when making the case to executive decision makers on the importance of investing financial, technological and human resources in order to engage in programs that meet The Joint Commission requirements and ensures patient and hospital staff safety. However, additional data may need to be analyzed surrounding your specific region, health system and/or facility in order to convince the C-suite.

Taking Steps to Performing Your ROI Analysis

Taking aside the fact that this study focused on the data of regionally centralized emergency response model, analyzing the total cost of investment and its return is an extremely valuable undertaking. Benefits range from budget validation and augmentation to the identification of key areas that may need improvement. However, getting data to perform a cost-benefit analysis as an afterthought may be your biggest hurdle, if not entirely impossible. The goal should be to measure the cost and related/expected benefit early on, and it begins with understanding two key data inputs, the costs associated with on-going preparedness programs and the cost associated with incident response.

Key inputs for on-going emergency preparedness costs include: 

  • Average salary cost for the ICS team members when they respond to a drill or exercise
  • Average salary costs for members of your emergency management committee at the hospital multiplied by the number of times you meet
  • Cost of emergency supplies purchased with the hospital’s finances – whether it is capital expense or operating expense.  (Remember to amortize the capital costs over the useful life of the equipment.  See your hospital’s accounting manager to determine an amortization schedule for your emergency management equipment, such as spare ventilators, radio equipment, etc.)
  • Facility cost for any supply storage locations within the hospital (See your accounting manager for calculation of square footage costs for your hospital)
  • Expenses paid to vendors for specialized software germane to emergency planning and response, such as mass alerting software systems and associated telephony costs

Key inputs for incident responses (varies based on the type, scope and severity of incidents)

  • Number of personnel responding to the incident, including the incident management team and staff called into the emergency situation (Remember the labor pool. Create sign-in logs to capture those responding)
  • Number of patient’s impacted, including how many ambulance patients were diverted from your facility because of a surge in patients or compromised infrastructure. (Consult with your ED Manager regarding the economic value of these lost patients to your facility)
  • Rental charges for equipment and services incurred by the facility, such as additional generators, sandbags to mitigate flooding, services of your local DMAT team, etc.
  • Length of event (Capture the duration of the event so you know the roll up costs for personnel responding)

The bottom-line comes down to asking yourself, "What would be the cost to your hospital be without emergency preparedness?"  Consider the negative impact of a prolonged recovery period during which your hospital may not be able to accept patients because it did not have a mitigation and response plan for loss of utilities and safety was compromised.  What would be the affect of negative press if the hospital suffered an internal problem and was unable to operate for several days to weeks because there was no efficient way to handle an internal disaster? The goal of emergency management is business continuity, to mitigate the risk through extensive planning for quick response and recovery in a way that minimizes loss, maintains quality and restores operational balance for a hospital.