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Office Computer Systems for Health Professionals: A Cost-Benefit Approach to Assessing Alternative Technologies

Bernhard A. Kats, MD, MS
JAMA. 1991;265(8):1032-1033. doi:10.1001/jama.1991.03460080102043.
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The medical office system is an automated office management system. Most vendors organize their software in modules. Typical applications are accounts receivable, appointment scheduling, word processing, and electronic claims processing.

James W. Allen, MD, uses the step-by-step approach to outline cost-benefit analysis for assessment of office computer systems. Academic economic skills are not required, no hypotheses need to be formulated, and statistical treatments are kept simple. Medical office system purchases by physicians are often made intuitively, influenced in part by vendor pressure and word of mouth. This sometimes (frequently in the past) results in frustration, staff attrition, and loss of income.

To approach the issues from a rational viewpoint, the author uses the "present value (PV) concept." This is based on the principle that time affects the value of money. The time factor is measured by the interest rate, called the discount rate. By comparing the cost of each medical


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