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The Status Quo: Profitability’s Biggest Enemy
By Tom Stampiglia
In just a few short years, the financial situation for healthcare providers has changed drastically. While patients only represented 12% of a provider’s revenue sources in 2007, they now account for almost a third of overall revenue, according to a Celent report. Between the rapid growth of high-deductible, consumer-directed care plans and a burgeoning self-pay population, patients are now responsible for a significant portion of both their medical expenses and a healthcare organization’s bottom line.
Despite these changing dynamics, many healthcare providers still employ the same conventional, long-standing approaches to revenue cycle management that were designed strictly with payers in mind. Even if these strategies are precisely what’s needed to capture quick and accurate reimbursement, they are unable to adequately address the unique challenges that come along with patient collections.
Why? Consider the industry standard for capturing patient fees. More often than not, patients are billed for their portion long after services have been rendered because providers are unable to determine exactly what the insurance company will allow for each procedure — the key variable in calculating a patient’s out-of-pocket obligations.
Unfortunately, this approach not only forces providers to postpone patient collections, but it also puts them at serious risk for payment delays and patient bad debt. In fact, more than half of patients’ healthcare obligations are never collected, adding up to more than $65 billion in lost revenues last year alone, according to McKinsey Quarterly reports.
By instituting practices designed to capture these funds at the time of service, healthcare providers can increase the odds that patients will fulfill their financial responsibilities. With recent technology advances, healthcare providers now have the ability to verify a patient’s eligibility and benefits status in real time and then pair it with the relevant CPT codes to determine insurance allowables.
Once allowables are determined, providers can apply patient responsibilities, including co-insurance and deductibles, to calculate precisely what the patient owes. Certainly this process could have been done before. However, using manual processes to examine each of these items for every patient would be cumbersome and unrealistic.
Beyond helping to accelerate cash flow, this upfront approach to patient collections brings greater transparency to payment processes and establishes a platform to conduct more effective patient financial counseling programs. With these initiatives underway, healthcare providers are well positioned to adopt a number of additional retail-based strategies proven to further enhance collections processes, such as introducing more patient-friendly billing statements, offering flexible payment plan options, and accepting credit or debit payments.
Another emerging trend that’s being met with great success is performing soft credit checks prior to the time of service. This approach, which acts like a form of financial triage, generates a rating of a patient’s likelihood to pay medical bills and gives providers the information needed to evaluate any associated financial risks. Once this information is in hand, providers can customize collection policies based on the unique circumstances of each patient.
Looking ahead, healthcare providers that implement these retail-based strategies and embrace their role as patient financial counselors will be well equipped to thrive in this new, patient-centered world. As consumers shoulder greater financial responsibility for care, it’s clear that change is critical to a healthcare organization’s survival, especially when it comes to capturing patient payments both at the point of service and beyond.
Tom Stampiglia is CEO of MPV of Austin, Texas.
Longitudinal Patient Record Systems – A Necessity for Accountable and Collaborative Care
By Alan Gilbert
In response to Dr. Jayne’s inaugural Curbside Consult regarding the lack of longitudinal care systems and the focus on episodic care, our experience has shown that a longitudinal patient record system is critical to realizing a goal of a more effective and efficient healthcare system that results in improved outcomes for patients. We believe that healthcare needs to be delivered at the point of need and not at the point of care.
One example of a longitudinal patient record is the National Clinical Network for Cleft Lip and Palate Services in Scotland. This project was established in 2000 to deliver interdisciplinary care between health professionals providing care for cleft lip and palate patients between birth and 20 years old. The objective was to provide a single record for a patient, creating a virtual multi-disciplinary care team for that patient including dentists, orthodontists, oral surgeons, speech pathologists, ENTs, audiologists, as well as the patients themselves, who were active participants in their own care. The platform accommodated clinical imaging, generated email,and letter alerts to remind clinicians and patient alike of their particular responsibility at specific times, and supported and facilitated audit and outcome assessments.
Benefits realized included:
- Improved communication – sharing of information across care providers
- Improved standards of care — a single source of patient information to monitor and analyze outcomes
- Improved coordinated care — interdisciplinary treatment planning and care has improved due to use of the platform
- Improved efficiencies — more effective use of clinicians’ time as well as the patients, their parents, and caregivers
- Improved data access — minimized risk of data fragmentation over multiple sites, reduced cost, time and effort incurred by offline data entry and replication
- Better patient satisfaction — through improvement in the organization of clinics and coordination among specialties
- Improved reporting — reports and analysis on a national basis
Another example of a longitudinal patient record is the National Sexual Health System in Scotland (NaSH) that was started in 2005. This strategy set out a framework for improving sexual health by enhancing access to information and services while enabling flexibility for local services to respond to local requirements. It also highlighted the need to be able to review existing data and develop a data collection framework to provide a more accurate picture of sexual health and wellbeing, in terms of both sexual conditions (chlamydia, AIDS, etc) and behaviors and attitudes.
Benefits realized included:
- Ability to produce and aggregate national sexual population and public health data
- Improved clinical care and access to patient clinical information by introducing more patient focused processes and the ability to communicate directly with patients through patient portals, secure email and text
- Streamlining of services enabling improved throughput and availability
- Increased ability to share clinical data across services nationally
- Removal of multiple manual record keeping systems
- Ability to address some clinical governance issues more effectively
- Reduced requirement for duplicate entry of patient data and better quality of data
- More efficient and increased integration of systems
These examples, as well as others in diabetes, cancer care, COPD, and infection control, all focus on the need for a technology platform that can create a consolidated clinical view of the patient, no matter their care setting.
Alan Gilbert is VP of business development for AxSys Health of New York, NY.
Playing the Percentages with EHR Uptime Will Not Pay Off
By Nelson Hsu
Playing with the percentages is risky for the many healthcare organizations on the electronic healthcare record (EHR) adoption curve. The percentages in question are EHR systems’ uptime – how often the applications are available and working at sufficient performance to meet healthcare providers’ needs. Industry standards, vendor claims, and assorted misconceptions about uptime conspire to make this critical area of EHR implementation a footnote where it needs to be near the top of the priority list.
EHR’s success depends as much on application availability as it does on functionality. According to a February 2011 report by AC Group Inc., system speed and availability was critical in physicians’ decisions to use an ambulatory EHR application. That’s a good start. Their perceptions of what constitutes acceptable levels of speed and availability, however, leave open the door to punishing financial and productivity costs.
A panel of physicians surveyed at a recent Medical Group Management Association Conference said if the system was not available a minimum of 99% of the time, then they would not consider the application reliable enough to use in the future. While that may sound reasonable, 99% is unacceptable for healthcare applications. System availability at that level roughly translates into an average of more than 87 hours of downtime annually — almost four days. And 99% isn’t even the minimum industry standard. The same AC Group report that included the physicians’ survey polled 37 EHR vendors and found that they don’t guarantee any better than 96% uptime.
That number of hours of downtime costs time and money. AC Group determined that for every minute an EHR application is down, the average physician practice spends 2.15 minutes to perform the required tasks manually plus the time required to update the computer systems once the system is back up and operating. The average cost of downtime, the survey analysis determined, was $8.13 per minute per provider, which equates to a median across all practice sizes and specialties of almost $488 per hour.
Nevertheless, most EHR software vendors will not even include uptime SLAs in their contracts unless specifically required to do so. When they are, almost every vendor AC Group talked to said that the cost of the system would increase from 5-20% for each 1% increase in uptime guaranteed beyond the standard 96%. With the products available today specifically designed for uptime assurance, there is no justification for levying such price premiums.
To gain the full value of their EHR implementations, physicians and healthcare managers must become their own uptime advocates. Eighty-seven percent of medical practices spend no time evaluating their EHR implementation’s uptime and service levels, instead leaving it to software providers who have little interest in it. Neglecting the amount of system downtime that a practice might experience could cost the average five-physician practice nearly $25,000 if the product is down just 10 hours during the course of a year.
Software providers may or may not recommend or provide a high-availability platform solution (either hardware or software) for their applications. Regardless, practices and clinicians must make this a requirement for the critical applications they depend on to run their practices and care for patients. The medical profession always tells patients to take responsibility for their own health. Now it’s time for the profession to take its own advice on this important issue.
Nelson Hsu is senior director at Stratus Technologies of Maynard, MA.