This advisory is being sent jointly to the members of the American Hospital Association (AHA), the Association of American Medical Colleges and the Federation of American Hospitals (FAH) to bring you up to date on our efforts to develop a common framework for the public disclosure of quality measures of hospital care.  Please share it with key members of your management, medical staff and governance.  It provides additional information about the important voluntary initiative to provide publicly disclosed quality data that we first described to you in a November 21, 2002 Quality Advisory. 

Initiative Launched - Key Steps

Hospitals' efforts to create a more unified approach to collecting hospital performance data and sharing that information with the public were officially launched on December 15, 2002.  Secretary Tommy Thompson has pledged the continued support of the U.S. Department of Health and Human Services, particularly the Centers for Medicare & Medicaid Services (CMS) and the Agency for Healthcare Research and Quality (AHRQ).  The Joint Commission on Accreditation of Healthcare Organizations, the National Quality Forum, AARP, and the AFL-CIO also have pledged to work with us. 

Here is the latest on the five critical components of this initiative that we are actively working on:

  • Getting Started.  We are moving to make the initial 10 measures of heart attack, heart failure, and pneumonia care available and helpful to the public.  We are also encouraging AHRQ and CMS, as part of their ongoing efforts, to develop a patient experience of care measure.
  • Honing in on Priorities.  We must identify the key aspects of hospital care that are associated with the priority areas identified by the Institute of Medicine (IOM), which were recently announced.
  • Choosing Measures.  We will seek to develop consensus on the clinically meaningful, scientifically sound, and generally understandable measures of the key aspects of hospital quality we are measuring, and ask hospitals to voluntarily report on those measures.
  • Creating Information.  We will work with clinical and communication experts to determine the best way to turn the raw data into meaningful information for the public, hospitals and clinicians.
  • Promoting Improvement.  We will make available on a Web site information from research studies and from successful hospital improvement to help you provide better care. 


There have been several developments in the past few weeks, and we welcome your help in responding.  AHRQ delivered to CMS the initial patient experience of care survey instrument.  This is the survey tool that will be used in the three-state pilot project that CMS is running.  Members can view this survey at, under "What's New."  There will be a formal opportunity in the next few weeks for all of us to comment on this draft survey through the usual formal Federal Register notice.  We will be sure to let you know when that opportunity arises.  Meanwhile, there may be opportunities for hospitals or hospital systems to help test aspects of the survey or its administration; if you're interested in participating in these small pilot tests, contact one of the association staffers below. 

Also, the 20 IOM priorities are listed below; a full copy of the IOM report is at under "Recent Reports."   Among the conditions are some for which hospital care quality is clearly important, some which are more predominantly ambulatory care issues, and some that span several delivery settings.  Over the next few weeks we will bring together a small group of clinical experts and others to develop a preliminary list of the key hospital quality issues for these priority areas, and then will share their list broadly to get feedback from you and others. 

More to Come

Finally, we are working out how to describe to you exactly how the data will flow from your hospital, through a process for checking and validation, and to CMS to be readied for the Web site.  That information should be on its way to you soon.  Additional advisories will be sent as the parties involved - hospitals, government and accreditors - work out the details. 

While progress is being made on this Quality Initiative, we know that many of you are moving ahead with your own quality and safety improvement efforts.  Many hospitals have indicated that they are considering implementation of computerized physician order entry systems to reduce medication errors.  To support your efforts, the AHA and the FAH commissioned a study by First Consulting Group that delineates the potential benefits of such systems, and provides new insights on the necessary investment of capital and human resources.  The Executive Summary is attached.  More detailed information can be found in the full report at, under "What's New." 

If you have questions, feel free to contact these association staffers:

  • At the AHA:  Nancy Foster, Senior Associate Director for Policy, 202-626-2337.
  • At the AAMC:  Robert Dickler, Senior Vice President, 202-828-0490.
  • At the FAH:  Susan Van Gelder, Senior Vice President, Strategic Policy, 202-624-1528.

IOM Priority Conditions

1. Asthma
2. Care coordination (a cross-cutting area)
3. Children with special health care needs
4. Diabetes
5. End of life with advance organ system failure
6. Evidence-based cancer screening
7. Frailty associated with old age
8. Hypertension
9. Immunization
10. Ischemic heart disease
11. Major depression
12. Medication management
13. Nosocomial infections
14. Obesity (an emerging area)
15. Pain control in advanced cancer
16. Pregnancy and childbirth
17. Self-management/health literacy 
18. Severe and persistent mental illness
19. Stroke
20. Tobacco-dependence treatment in adults



Executive Summary

Research indicates that computerized physician order entry (CPOE) has the potential to reduce medication errors and adverse drug events and thus improve the quality of care.  However, successfully implementing CPOE is difficult and expensive.  An estimated five percent of hospitals now have CPOE, but many more are considering this investment.  This report is designed to expand the information base available to hospital leaders regarding CPOE implementation:  the costs, challenges, benefits, and lessons learned. 

Study Approach and Goals

Many of the early CPOE success stories involved custom-developed systems in large academic medical centers where residents, rather than community physicians, write most of the orders for patient care.  The advent of vendor-based CPOE products has made CPOE more accessible to other types of hospitals, but less information has been available on these experiences.  In particular, very limited data exists on the financial implications of CPOE – both costs and savings.  As hospital leaders make decisions on where best to focus investments in patient safety, it is important to fill these gaps.  To this end, this study examines the experiences of six health care delivery organizations that undertook CPOE implementation using vendor-based products – five that considered their implementations to be successful and one that halted the process midstream.


Based upon analysis of the data from the case study sites and a set of assumptions, the study presents a representative cost model for implementing CPOE at a single, 500-bed hospital.  This model estimates total one-time capital plus operating costs of $7.9 million and annual ongoing costs of $1.35 million. The model assumes that the hospital organization already has the high-capacity network capabilities required for CPOE, and some level of clinical information system capability that would require moderate upgrades.  Hospitals without such capabilities would incur higher costs.  Variables important in determining the costs of CPOE include: the size of the organization, the number of sites, and whether the organization is implementing a single integrated clinical system or must integrate the new CPOE system with existing systems for laboratory, pharmacy and radiology.


While the costs of implementation and ongoing maintenance represent one set of challenges, the managerial challenges can be even greater.  The CPOE implementation team must alter physician practices and redesign inpatient care processes involving nurses, pharmacists, physicians and ancillary staff.  Since CPOE often involves an increase in physician time spent on order entry, physician acceptance can be a critical barrier to overcome – especially in community hospitals where community physicians, rather than house staff, order the majority of tests and medications.  The study sites invested heavily in executive and physician leadership.  The time required to implement CPOE ranged from 12 to 24 months.


The five hospitals studied made the decision to proceed with CPOE based on the benefits already documented by early adopters of the technology.  These include:  reduced adverse drug events, standardization of care, and improved efficiency of care delivery.  With one exception, the study sites did not conduct, nor do they plan to conduct, comprehensive studies of the benefits and cost savings specific to their institution.  The organization that did a formal study of the impact of CPOE found significant process improvements, elimination of medication transcription errors, and a small reduction in severity-adjusted length of stay at one hospital. However, they found no significant impact on overall costs. To date, the study organizations have documented some areas of modest cost savings, but are still early in the implementation process and the full financial implications (costs net of savings) are still unknown.  It is important to note, however, that the organizations did not make the decision to implement CPOE based on an assumption that the system would pay for itself. 

Lessons Learned

The study sites confirmed many of the success factors presented in earlier studies including:  executive leadership commitment; the engagement of physician champions; continued dedication of financial resources beyond implementation; intensive user support; rapid computer response times; and user-friendly interfaces.  The study sites also advocated practices that are less well-known, including: methods for quickly and efficiently gaining user input to design new care processes, to configure computer screens and to implement incremental improvements; the addition of wireless networks and devices for order entry; and heavy training of and reliance upon nursing staff to manage and assist with physician adoption of CPOE in the community setting.

Costs, Benefits and Challenges of CPOE

© FCG 2003

Click here to download the survey instrument in WORD format
Click here to download the Computerized Physician Order Entry: Costs, Benefits and Challenges full report in PDF format


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