Making a Business Case for Digital Pathology

Last week Simon Häger, Product Manager from Sectra, wrote an interesting article on their website entitled “How to Build a Business Case to Justify the Investment in Digital Pathology“. Simon breaks down the gains into some basic categories in terms of return on investment, namely,  increased pathologist efficiency, savings in external consultations, reduced cost of internal glass slide handling and real estate savings against the costs of scanners, storage, software and IT infrastructure.  The real estate savings are perhaps one area that folks in the past have not considered considering space required for individual pathologist offices rather than shared reading rooms analogous to radiology.  

He concludes that “Based on the potential gains and the estimated costs, one can determine the return on investment for presentation to the hospital board of directors. Even if pessimistic estimations are used in calculations you will normally gain a three-digit return on investment (in %) over a five-year horizon, and one thing that is certain is that there will always be someone in the room challenging your assumptions. 

Your ROI is based on assumptions and will not be exact. However, even if only 30% of the potential savings are realized, the investment will still be worthwhile, not to mention all the economic health benefits that will be realized on top of that.”

I encourage you to check out the models and value propositions presented.

Many pathology departments stand on the threshold of adopting digital pathology. The creation of an appealing business case for digital pathology is necessary to justify the acquisition of the new hardware and software and can be difficult to compile. This document guides you through the process of creating the business case.

Keep it simple

Before getting into to costs and cost savings, I want to make something clear. I claim the biggest benefits of digitizing probably lies beyond the cost savings within the pathology department itself. Instead the bulk of gains will be health economically related and found in quality improvements throughout the entire cancer care chain, providing value for several care specialties and in the end increased the value for patients. Although benefits such as reduced lead time, shorter waiting times, increased diagnosis precision and faster treatments are obvious, they are very hard to monetize in a business case.

Having that said, presenting a more narrow economic model focusing on the increased efficiency and reduced costs for the pathology department is easier to quantify and usually provide enough decision basis to justify the investment. By showing black numbers in such model one can argue that the investment is worthwhile since all the health economic benefits that will be realized throughout the cancer care pathway will add on top of that. Now, let’s look at an example of how a business case for a pathology department could be created.

Read full article here.