Valuation of a digital operating room in the public health care sector - a case study in cooperation with Smith & Nephew

Abstract

Technological progress takes place all the time and in all sorts of sectors in our society. A computerization of nearly all companies worldwide has taken place and barely any company in developed countries can stay away from using IT today. Numerous IT evaluation methods have been developed to find methods to investigate how IT solutions can supply to business performance and economic growth and how these benefits could be valued. Problems with valuing IT and modern technology are present also in the health care sector, which is one of the most expanding areas developing new technology. The goal of the Swedish health and medical care system is to ensure good health and provide care on equal terms for the entire population. A hospital confronts numerous decisions, such as which investment to make and why these investments are well aligned with their strategy, in order to reach these goals with limited resources. There are several aspects that are difficult or even impossible to financially value, such as patient satisfaction, ergonomics and other intangible values, when valuing a digital operating room. The main focus of this thesis is directed to the aspects for the specific investment of a digital OR from an investor’s point of view. The purpose of this report is to identify the most important aspects in view of the valuation of an investment of a digital operating room and to derive a model that can be used in valuing these kinds of investments within the public health care sector. This model is supposed to be used by an investor when choosing between different investment options and also to be used by companies to improve and pinpoint the utility of their digital OR and hence strengthen their position on the market. To be able to reach a reliable valuation of a digital OR investment, problems that can occur when valuing an investment of this type was identified. Thereafter, theoretical based literature and empirical data, collected by mainly interviews, has been studied and analyzed and the pros and cons of the commonly accepted theories were weighted to be able to select the most suitable theories. This ended up, after making use of the most suitable methods from all valuation models existing according to chosen criteria, in a new valuation model, the Dynamic Multi-Variable Decision Model, for the digital OR which can give a more suitable and combined valuation of both tangible and intangible assets.