Student name

Walden University

DNRS 6211: Finance and Economics in Healthcare Delivery

Professor Name

Submission Date

Part 1: Expense/Revenue/ROI Analysis

Part 2: W4A3 Projected Expenses and Revenues (Five Year)

Summary of Analysis and Interpretation of Results

Implementation of a Remote Patient Monitoring (RPM) system in HealthWays Clinic is expected to bring major change in terms of operations and financial gains in the long run (5 years). The sum of the anticipated costs, including the initial and operating expenses will be 1.3 million dollars. These consist of a preliminary investment of 225,000 which will cover hardware, software development, infrastructure and training of staff and legal compliance. There are also the annual operational expenses, which include system maintenance, employee wages, IT support and marketing expenses, and they will total to 1075 million over the same time span.

Conversely, the clinic will realize a revenue and cost saving of 1.375 million. Other significant sources are patient service fees, insurance money and business partnership, which are worth 1.2 million, and reduced hospital readmissions that have saved it 175,000. This gives it a small Return on Investment (ROI) of 6% which translates to the incremental 6 cents of Net financial value of every dollar spent.

The formula for Return on Investment (ROI) is as follows:

ROI=Net Profit (Total Revenue Savings – Total Expenses) / Total Expenses×100

Step 1: Calculate Net Profit

From the table:

• Total Revenue Savings: $13,75,000.00
• Total Expenses: $13,00,000.00

Net Profit = Total Revenue Savings – Total Expenses

Net Profit=13, 75,000−13, 00,000=75,000

Step 2: Calculate ROI

ROI=Net Profit/ Total Expenses×100

ROI=75,000/ 13, 00,000×100

ROI=5.77% round off to 6%

The RPM system has radically beneficial features, in addition to the numerical ROI. It can reduce hospital readmission costs and lower care delivery, which is why it perfectly fits the vision of Health Ways to strengthen the quality of services and guarantee the sustainability of their operations (Thomas et al., 2021). Moreover, this project highlights how the clinic is determined to drive better change in the field of healthcare, which strengthens its image as a leader in implementing the latest medical technologies to improve patient outcomes.