Cost of an informatics-based diabetes management program

Objectives: The relatively high cost of information technology systems may be a barrier to hospitals thinking of adopting this technology. The experiences of early adopters may facilitate decision making for hospitals less able to risk their limited resources. This study identifies the costs to design, develop, implement, and operate an innovative informatics-based registry and disease management system (POPMAN) to manage type 2 diabetes in a primary care setting. Methods: The various cost components of POPMAN were systematically identified and collected. Results: POPMAN cost $450,000 to develop and operate over 3.5 years (1999-2003). Approximately $250,000 of these costs are one-time expenditures or sunk costs. Annual operating costs are expected to range from $90,000 to $110,000 translating to approximately $90 per patient for a 1,200 patient registry. Conclusions: The cost of POPMAN is comparable to the costs of other quality-improving interventions for patients with diabetes. Modifications to POPMAN for adaptation to other chronic diseases or to interface with new electronic medical record systems will require additional investment but should not be as high as initial development costs. POPMAN provides a means of tracking progress against negotiated quality targets, allowing hospitals to negotiate pay for performance incentives with insurers that may exceed the annual operating cost of POPMAN. As a result, the quality of care of patients with diabetes through use of POPMAN could be improved at a minimal net cost to hospitals.