This article was written by Jeff Blankinship, CEO and president of Surgical Notes.
Selecting ASC vendors is more complicated than you think. The old adage, "You get what you pay for" is literally true.
It's important to know your industry and not be short-sighted by only choosing the vendor with the lowest price. Many facilities and management companies make the mistake of trying to be a hero by reviewing vendor contracts and making changes based on the lowest rate available, without taking into consideration the true value and benefits the vendor is performing. Reducing a line item expense on the income statement is a tempting exercise but may have unintended consequences that do not fully manifest until a few billing cycles later.
Looking past the price and selecting a quality vendor
The process of continually reviewing vendor agreements is a necessary task and is a good fiduciary exercise in maintaining and controlling cost at an ASC. However, it's extremely important to fully understand the complete service benefits the vendors are providing and how those outsourced functions fully affect the operational efficiency within your facility. Selecting the cheapest vendor could end up costing you much more than you think.
One line item cost that is scrutinized frequently is transcription fees. Often, the people tasked with reviewing vendor agreements or reducing costs at facilities are making the decision without (1) the proper input from the facility staff or (2) a full understanding of the total service offering.
A classic example — which is often the case and is currently happening within the industry, often with large management companies — is that someone at the corporate level, in an effort to reduce costs, decides to make a global change to a service (i.e. transcription) for all their facilities. This is problematic because each facility is unique in many ways ranging from their medical records process to their method of physician dictation to their requirements for dictation.
The disruption associated with changing is a burden on the facility, and many times, the savings are not justifiable for the functionality loss. In addition, line item pricing does not reflect the quality of service, which could greatly affect facility reimbursement. The selection of a vendor based only on price could be costing you much more money than you think — and could affect the facility's operating efficiencies and time to recover accounts receivables.
The new era of medical transcription: How to choose a company
Medical transcription should not be based upon price alone. The service has been treated as a commodity in the past, but those days are long behind us. Today's modern transcription companies offer so much more than typing of the operative report.
Today, there are many facets to that service, which affects the entire operation process of an ASC from the start to the finish. Quality, dependability, turn-around time, uptime for websites, and customer service are just some of the factors to consider when choosing a transcription vendor.
In addition, today's better services offer electronic signatures for op reports, carbon copies to referring physicians, physician notifications, reconciliation tools, etc. Did you know that the ripple effect from mere transcription extends to the pre-operative nurse, the surgeon, medical records, coding, billing and collections, not to mention the referring physicians? Transcription companies vary in many ways — service level and value-added benefits, technology, IT infrastructure, the application which they operate on, security (HIPAA compliant), interface capabilities, customer support and automation, etc. Choosing any one of them based solely on a line item expenses basis is selling both the facility and the vendor short.
Calculating ROI for a transcription company's offerings
Below is an example of the return on investment of one such company's offerings, which is often overlooked when someone is selecting a vendor based upon price or a line item cost at the end of the year.
Let's consider this scenario based upon a line rate. Parenthetically, a "line rate" is often confusing and is almost impossible to budget, unless you have determined what the average cost-per-case should be. The cost-per-case should be based on the total transcription cost that month divided by the number of cases. If you are paying an average of $7.00 per report and averaging 300 cases a month, your monthly bill would be $2,100. Now consider the following services and value based upon: 1) the transcription company's technology; 2) automation and value-added services, which affects the daily processes of the employees; 3) electronic interface with practice management schedule, ensuring 100 percent data integrity.
This scenario is based upon an employee's average hourly pay with benefits, at $20.00 an hour based on a one month period.
1. Eliminate sending schedules and updates or corrections to the schedule. This must be done by an employee daily, by medical records.
Time needed per day if done manually: 15 minutes a day
Per month: 5 hours
2. Eliminates proofing the demographics on each transcribed report. This is to ensure the accuracy of the demographics.
Time needed per day if done manually: 30 minutes a day
Per month: 10 hours
3. Auto distribution to surgeons and referring physicians, by web-portal , secure e-mail, fax and mail.
Time needed per day if done manually: 30 minutes a day
Per month: 10 hours
4. Reconciliation report of cases, dictations equaling transcriptions.
Time needed per day if done manually: 10 minutes a day.
Per month: 3.3 hours
5. Electronic signatures (surgeons' signatures on reports).
Time needed if done manually: 60 minutes a day
Per month: 20 hours
6. Online editing (if not available real-time).
Time needed if done manually: 20 minutes a day
Per month: 6.6 hours
7. Access of medical records electronically to coders.
Time needed if done manually: 10 minutes a day
Per month: 3.3 hours
8. Changes to an operative report and to notify the coders.
Time needed if done manually: 10 minutes a day
Per month: 3.3 hours
Other time-consuming tasks which are handled by transcription company:
• Resend reports to doctors office, multiple times
• Inform doctors of missing dictation
• Notification of doctors to sign reports
Total employee hours saved by automation: 61.5 hours per month
x $20 an hour employee: - $1,230.00
Total cost of transcription per month based on $7.00 per report with 300 cases: $2,100.00
Total cost of transcription with value-added services with reduction of employee hours: $870.00
If your transcription vendor does not have these services or value-added benefits, then you can add these costs on top of the price that you received as a quote. One factor we did not take into account was the impact on the total revenue and the accounts receivable, which would be impacted significantly due to data errors and the extra time to complete the transcribe reports. At month end, if your billing department is trying to close out the month and realizes that there is missing dictations and/or errors on reports, it will add a burden for the billing department and medical records staff.
Although it is an important exercise to review vendor agreements annually, it is also important to do so with a full understanding of all the mitigating factors involved — from pricing to the full service of the vendor, and how it may affect the facility's daily process. Asking staff for input and evaluating the vendors will benefit the decision-making process and will have a significant impact on the outcome.
Learn more about Surgical Notes.
Related Articles on Transcription:
6 Tips on Managing Business Office Staff in an Ambulatory Surgery Center
Surgical Notes President Jeff Blankinship Prepares to Launch Surgery Center Network to Promote Use of ASCs
ABCs of an Effective ASC
Selecting ASC vendors is more complicated than you think. The old adage, "You get what you pay for" is literally true.
It's important to know your industry and not be short-sighted by only choosing the vendor with the lowest price. Many facilities and management companies make the mistake of trying to be a hero by reviewing vendor contracts and making changes based on the lowest rate available, without taking into consideration the true value and benefits the vendor is performing. Reducing a line item expense on the income statement is a tempting exercise but may have unintended consequences that do not fully manifest until a few billing cycles later.
Looking past the price and selecting a quality vendor
The process of continually reviewing vendor agreements is a necessary task and is a good fiduciary exercise in maintaining and controlling cost at an ASC. However, it's extremely important to fully understand the complete service benefits the vendors are providing and how those outsourced functions fully affect the operational efficiency within your facility. Selecting the cheapest vendor could end up costing you much more than you think.
One line item cost that is scrutinized frequently is transcription fees. Often, the people tasked with reviewing vendor agreements or reducing costs at facilities are making the decision without (1) the proper input from the facility staff or (2) a full understanding of the total service offering.
A classic example — which is often the case and is currently happening within the industry, often with large management companies — is that someone at the corporate level, in an effort to reduce costs, decides to make a global change to a service (i.e. transcription) for all their facilities. This is problematic because each facility is unique in many ways ranging from their medical records process to their method of physician dictation to their requirements for dictation.
The disruption associated with changing is a burden on the facility, and many times, the savings are not justifiable for the functionality loss. In addition, line item pricing does not reflect the quality of service, which could greatly affect facility reimbursement. The selection of a vendor based only on price could be costing you much more money than you think — and could affect the facility's operating efficiencies and time to recover accounts receivables.
The new era of medical transcription: How to choose a company
Medical transcription should not be based upon price alone. The service has been treated as a commodity in the past, but those days are long behind us. Today's modern transcription companies offer so much more than typing of the operative report.
Today, there are many facets to that service, which affects the entire operation process of an ASC from the start to the finish. Quality, dependability, turn-around time, uptime for websites, and customer service are just some of the factors to consider when choosing a transcription vendor.
In addition, today's better services offer electronic signatures for op reports, carbon copies to referring physicians, physician notifications, reconciliation tools, etc. Did you know that the ripple effect from mere transcription extends to the pre-operative nurse, the surgeon, medical records, coding, billing and collections, not to mention the referring physicians? Transcription companies vary in many ways — service level and value-added benefits, technology, IT infrastructure, the application which they operate on, security (HIPAA compliant), interface capabilities, customer support and automation, etc. Choosing any one of them based solely on a line item expenses basis is selling both the facility and the vendor short.
Calculating ROI for a transcription company's offerings
Below is an example of the return on investment of one such company's offerings, which is often overlooked when someone is selecting a vendor based upon price or a line item cost at the end of the year.
Let's consider this scenario based upon a line rate. Parenthetically, a "line rate" is often confusing and is almost impossible to budget, unless you have determined what the average cost-per-case should be. The cost-per-case should be based on the total transcription cost that month divided by the number of cases. If you are paying an average of $7.00 per report and averaging 300 cases a month, your monthly bill would be $2,100. Now consider the following services and value based upon: 1) the transcription company's technology; 2) automation and value-added services, which affects the daily processes of the employees; 3) electronic interface with practice management schedule, ensuring 100 percent data integrity.
This scenario is based upon an employee's average hourly pay with benefits, at $20.00 an hour based on a one month period.
1. Eliminate sending schedules and updates or corrections to the schedule. This must be done by an employee daily, by medical records.
Time needed per day if done manually: 15 minutes a day
Per month: 5 hours
2. Eliminates proofing the demographics on each transcribed report. This is to ensure the accuracy of the demographics.
Time needed per day if done manually: 30 minutes a day
Per month: 10 hours
3. Auto distribution to surgeons and referring physicians, by web-portal , secure e-mail, fax and mail.
Time needed per day if done manually: 30 minutes a day
Per month: 10 hours
4. Reconciliation report of cases, dictations equaling transcriptions.
Time needed per day if done manually: 10 minutes a day.
Per month: 3.3 hours
5. Electronic signatures (surgeons' signatures on reports).
Time needed if done manually: 60 minutes a day
Per month: 20 hours
6. Online editing (if not available real-time).
Time needed if done manually: 20 minutes a day
Per month: 6.6 hours
7. Access of medical records electronically to coders.
Time needed if done manually: 10 minutes a day
Per month: 3.3 hours
8. Changes to an operative report and to notify the coders.
Time needed if done manually: 10 minutes a day
Per month: 3.3 hours
Other time-consuming tasks which are handled by transcription company:
• Resend reports to doctors office, multiple times
• Inform doctors of missing dictation
• Notification of doctors to sign reports
Total employee hours saved by automation: 61.5 hours per month
x $20 an hour employee: - $1,230.00
Total cost of transcription per month based on $7.00 per report with 300 cases: $2,100.00
Total cost of transcription with value-added services with reduction of employee hours: $870.00
If your transcription vendor does not have these services or value-added benefits, then you can add these costs on top of the price that you received as a quote. One factor we did not take into account was the impact on the total revenue and the accounts receivable, which would be impacted significantly due to data errors and the extra time to complete the transcribe reports. At month end, if your billing department is trying to close out the month and realizes that there is missing dictations and/or errors on reports, it will add a burden for the billing department and medical records staff.
Although it is an important exercise to review vendor agreements annually, it is also important to do so with a full understanding of all the mitigating factors involved — from pricing to the full service of the vendor, and how it may affect the facility's daily process. Asking staff for input and evaluating the vendors will benefit the decision-making process and will have a significant impact on the outcome.
Learn more about Surgical Notes.
Related Articles on Transcription:
6 Tips on Managing Business Office Staff in an Ambulatory Surgery Center
Surgical Notes President Jeff Blankinship Prepares to Launch Surgery Center Network to Promote Use of ASCs
ABCs of an Effective ASC