The Real ROI of Clinical AI for a 250-Bed Hospital

Executive Summary: A 250-bed hospital with 500 providers spending $290,000 annually on ambient documentation should expect $13-27 million in Year 1 returns. The math is straightforward. The assumptions are documented below. Adjust them for your system and the ROI still works.

Most hospital ROI calculators are marketing tools dressed up as financial models. They bury assumptions, cherry-pick metrics, and produce numbers that fall apart under CFO scrutiny.

This is different. Every assumption is visible. Every number can be challenged. If you think our time savings estimate is too aggressive, cut it in half. The ROI still clears 4,500%.

We built this model for a specific hospital profile: 250 beds, 500 physicians and APPs, roughly 50,000 annual encounters, running an enterprise EHR like Epic or Cerner. If that’s not you, the structure still works. Swap in your numbers.

Where the Money Comes From

There are four revenue and savings categories. Time savings is the largest. Capacity revenue is second. Medicare optimization and audit defense are smaller but real.

Let’s walk through each.

Time Savings: $15 Million

The average provider loses 1-2 hours daily to documentation. Epic’s own data shows physicians spend more time in the EHR than with patients. Ambient documentation compresses that.

Our conservative assumption is 1 hour saved per provider per day. Some providers report 90 minutes. We use 1 hour because it survives scrutiny.

The math: 500 providers working 250 clinical days per year, saving 1 hour daily, at a loaded cost of $120 per hour. That’s salary plus benefits plus overhead, which is standard for hospital cost accounting.

500 × 250 × 1 × $120 = $15,000,000.

That number sounds large because it is large. Documentation burden is a $15 million annual drain on a hospital this size. Most systems just absorb it as normal.

The question isn’t whether this time exists. It’s what happens when you recover it. Three possibilities: reduced overtime costs, improved retention from better work-life balance, or the ability to see additional patients. Most hospitals see some combination.

Capacity Revenue: $11.25 Million

If providers have more time, they can see more patients. Not dramatically more. Half a patient per day is the conservative estimate.

The math: 500 providers seeing 0.5 additional patients per day, 250 days per year, at $180 average revenue per encounter.

500 × 0.5 × 250 × $180 = $11,250,000.

This assumption requires available demand. If your hospital is already turning patients away, the number holds. If you’re struggling to fill appointments, reduce it. At zero additional patients, the ROI still works on time savings alone.

The $180 per encounter is a blended average across specialties. Primary care runs lower, around $120-150. Specialists run higher, often $250-400. Use your actual payer mix if you want precision.

Medicare Optimization: $550,000-850,000

This is where most hospitals leave money on the table.

Annual Wellness Visits pay $80.24 under the 2024 CMS fee schedule. Most hospitals capture 60% of eligible patients. With better documentation workflows and automated prompts, capture rates climb to 75% or higher.

For a hospital with 60% Medicare patients (30,000 of 50,000 encounters), about 15% are AWV-eligible. That’s 4,500 patients. Moving from 60% to 75% capture adds 675 AWVs at $80.24 each: $54,162.

The larger opportunity is chronic care management programs. CCM pays $160-500 per patient annually. Transitional Care Management pays $150-400. Behavioral Health Integration pays $100-300. Most hospitals underbill all three because the documentation burden makes them impractical.

Ambient documentation removes the friction. Providers can enroll patients in these programs without adding 20 minutes of paperwork per visit. The incremental revenue depends on your patient mix and current capture rates, but $500,000-800,000 annually is realistic for a hospital this size.

Total Medicare optimization: $554,162-854,162.

Audit Defense: $20,000-32,000

Smaller category, but real.

Most hospitals face 5-8 documentation audits annually. Each audit currently takes 25-30 hours of legal and compliance staff time at $200 per hour, loaded. With evidence-linked documentation, audit prep drops to 10 hours. That’s 15-20 hours saved per audit.

5-8 audits × 15-20 hours × $200 = $15,000-32,000.

The harder-to-quantify benefit is reduced audit risk. When every clinical decision links to timestamped evidence, auditors close cases faster. We don’t model that savings because it’s speculative, but it’s real.

Total Year 1 Benefit

Adding the four categories: $15,000,000 in time savings, $11,250,000 in capacity revenue, $554,162-854,162 in Medicare optimization, and $20,000-32,000 in audit defense.

Total: $26.8-27.1 million.

What It Costs

Implementation runs about $50,000. That covers training, change management, IT configuration, and EHR integration. The range is $25,000-75,000 depending on your system’s complexity and how much customization you need.

Annual licensing at enterprise pricing is $480 per provider per year, or $40 per provider per month. For 500 providers, that’s $240,000 annually.

Year 1 total cost: $290,000.

The ROI Calculation

Year 1 benefit minus Year 1 cost: $26.5-26.8 million net.

As a percentage: 9,150-9,250% ROI.

That number looks absurd. It’s not. Documentation burden is so severe, and so normalized, that removing it produces returns that seem impossible until you see them.

The Conservative Scenario

CFOs don’t trust vendor models. They shouldn’t. So here’s the version where everything goes half as well as projected.

Cut time savings in half: $7.5 million. Cut capacity revenue in half: $5.625 million. Cut Medicare optimization in half: $277,000-427,000. Cut audit defense in half: $10,000-16,000.

Total conservative benefit: $13.4-13.6 million.

Subtract the same $290,000 in costs.

Conservative net benefit: $13.1-13.3 million.

Conservative ROI: 4,525-4,579%.

Still exceptional. And this assumes everything underperforms by 50%.

Three-Year View

Year 2 and Year 3 costs drop because implementation is done. You’re paying $240,000 annually for licensing. Three-year total cost: $770,000.

If benefits hold steady (they typically improve as adoption matures), three-year total benefit is $80.4-81.4 million.

Three-year net: $79.7-80.6 million.

Three-year ROI: 10,350-10,470%.

Adjusting for Your Hospital

The model is only useful if you can challenge it.

If you have 300 providers instead of 500, multiply everything by 0.6. If your loaded cost per hour is $150 instead of $120, adjust time savings up 25%. If you’re at maximum capacity and can’t see more patients, zero out the capacity revenue line. The ROI still works.

The variables that matter most:

Provider count determines scale. Time saved per provider determines the per-person benefit. Loaded cost per hour determines the dollar value of that time. Medicare mix determines optimization upside. Current capture rates determine how much room you have to improve.

Get those five numbers right and the model calibrates itself.

What This Doesn’t Include

We deliberately excluded soft benefits that are real but hard to quantify.

Provider satisfaction and retention. Documentation burden is the top driver of burnout. Reducing it should improve retention, but we don’t model the avoided cost of replacing a physician at $500,000-1,000,000 each.

Quality improvement. Better documentation produces better care coordination. We don’t model avoided complications or reduced readmissions.

Patient satisfaction. Less time on the computer means more time with patients. HCAHPS scores should improve. We don’t model the reimbursement impact.

Competitive positioning. Hospitals that eliminate documentation burden will attract better physicians. We don’t model recruitment advantages.

These benefits are real. We excluded them because they’re hard to defend in a finance committee meeting. The quantified ROI is strong enough without them.

The Underlying Question

The math here is not complicated. The question is whether you believe the time savings are real.

They are. We have data from 525+ active users across multiple health systems. The 1 hour per day figure is conservative. Many providers report more.

But you don’t have to take our word for it. Run a pilot with 20 providers for 60 days. Measure their documentation time before and after. Calculate what that savings would look like at scale. Then decide.

The ROI model is downloadable. The assumptions are adjustable. The math is transparent.

If it doesn’t work for your hospital, you’ll know exactly why.

For a customizable Excel version of this model or help running the numbers for your specific system, contact admin@orbdoc.com.