ASCs, with a little diligence, can implement and reap the benefits of electronic medical records, digital dictation, coding and billing software, inventory management, and cost- and quality-data gathering, say experts. What's more, moving ahead with healthcare IT is a big part of the answer to fixing – or at least improving – the nation's healthcare problem, says David Dranove, MBA, the Waltner McNerney Distinguished Professor of Health Industry Management and professor of management and strategy at Kellogg School of Management.
"If we don't adopt healthcare information technology – and I realize this is a cost burden to all of you – we're just going to go around in circles trying to develop unified, linked standards [for quality and costs]," Mr. Dranove said in his speech, "Code Red: Reviving the American Healthcare System," at the Improving Profits and Business and Legal Issues for ASCs conference Oct. 19 in Chicago. "[The ASC industry] needs to do this so we don't have to hear the message again, that it's time to adapt this technology."
In short: HIT can improve business operations and the tracking of quality indicators and can help ASCs manage their businesses much better. Moreover, more expertise and better tools than ever are available to help ASCs do so (see "12 Key IT Products for ASCs"). The driving factors in the hesitation, say experts, are cost and lack of interoperability – but they needn't hold you back.
"The hardest part in an ASC is that the return on investment for $50,000 to $60,000 – which is generally what these systems cost – is difficult to justify in many cases," says Matt Petty, the senior vice president of IT at Meridian Surgical Partners.
"But it's a matter of value for the money." Here are eight key ways that HIT can benefit your facility. This article also takes a quick look at the interoperability issue.
1. Improve A/R management and billing and collections.
Billing and collections software can accelerate your revenues by automating manual processes, so it's essential that you have a sound collections process in place to begin with, says Robert Westergard, CPA, the CFO of Ambulatory Surgery Centers of America (ASCOA). "You can do a very good job with paper, but it requires that you be extremely well organized and well disciplined and that your process is basically water tight," he says. "It's a tremendous benefit to have software check your payments vs. the contract rates, record and show the collection history [on an account], and help you drive your collection activities."
The result is that you can get paid faster; Meridian works to implement appropriate IT solutions in all its facilities because, ultimately, the ROI is there. "Even though an information management system costs money, having the ability to perform tasks electronically gets you your money faster," says Mr. Petty. "There's value in eliminating delays. You can reduce days in A/R significantly."
Essentially, there's a clock ticking from the time the case happens to when a payor reimburses you – and each day that you have to wait knocks some value off each dollar reimbursed. Mistakes can delay claims or cause the payment window to expire entirely. "The older receivables get, the less chance you have of collecting them," says Mr. Westergard. "Once they get to 90 days old, your chances of collecting the money start to drop significantly, especially if it's money that's due from patients. If you haven't billed properly, your chances of getting reimbursed are slim. Electronic billing software can help eliminate billing mistakes and expedite claim payment by 2-3 weeks."
Avoiding long-outstanding claims can significantly improve cash on hand and EBITDA, he says. That's why Mr. Petty recommends software to "scrub" claims – flag them for mistakes and inconsistencies, in order to make corrections and submit clean claims to the payor the first time. "If you can ensure that payors reimburse you, and do it quickly, the bottom line will benefit," says Mr. Petty. In fact, such a system can pay for itself many times over at implementation and over its lifetime. "Improving your AR process often provides a large dollar benefit in a short timeframe," says Mr. Westergard. "Say your average days in A/R is 60 and you're collecting $500,000 per month; the software can help you streamline your process and realistically cut that figure to 35 days. That will bring in $300,000 to $500,000 right away. "The cost of implementation is low and, used properly, the results are dramatic."
2. Benchmarking and case costing.
IT can enable data gathering and benchmarking analysis that is almost impossible to do manually. "For example, it's easier to do case-costing," says Mr. Petty. "We're finishing up a cash-lag analysis which helps us determine when we are getting reimbursed per case by payor or financial class, and we can tell who's paying us slowly, figure out why, and fix it so the reimbursement comes in faster in full.
"Once you input data, it's just a value for analysis, and it can be done on one screen instead of 15 spreadsheets. But if you don't have the data – if you don't go electronic – you simply can't get there."
Another key to ensuring that HIT solutions with case-costing components work is having a good underlying process in place, reminds Mr. Westergard. Further, because of the initial input legwork necessitated by such systems, their up front costs will be much higher. But, done right, you can see a huge return on investment.
"We cost every case, every month," says Mr. Westergard. "We want to break each case down by, supplies and overhead – which includes wages. Then we compare it to what we've collected. For example, one orthopedic surgeon may perform knee arthroscopies for between $1,200 and $1,500, while another does them for $500. If reimbursement is $1,200, you need to show the expensive surgeon how his colleagues do it for less. Again, a paper process can work, but the software helps automate what can be a very manual process. "Good information can help you turn money-losing cases into money-makers. Every money-losing case you can do profitably in the future has twice the profit impact."
3. Outsourcing transcription and coding.
In addition, technology can free you up to explore new options for ancillary business services. Robert Welti, MD, the medical director of Santa Barbara Surgery Center in Santa Barbara, Calif., has used a combination of a Web-based dictation portal and an outsourced coding service to speed the process and save money for his facility.
"Our physicians dictate to the Web-based program, and our coding company is able pull the information from off-site," he says. "The next day, they send us the codes electronically — it's 25 percent of what it would cost [to have an in-house staff]." Surgical Notes is a leader in medical transcription technology.
4. Minimize space and time through electronic records as opposed to paper records.
The physical footprint of any facility is a big issue, says Mr. Petty: "At some point, he says, you will simply run out of space for storage for all the paper files. It's a lot cheaper to buy another hard drive than it is to add a room that cannot be utilized to generate revenue."
Once implemented, IT solutions are faster to use as well and, while it may be difficult to quantify the cost savings derived from time savings, they do exist. "I'm a big fan of scanning every single item – every contract, every communication, every legal document – so I can have a searchable database on my laptop at all times," says Dr. Welti. "I've made all our forms on Excel Spreadsheets and combined them according to specialty into PDFs to create ortho charts and eye charts and general charts, for example. All we have to do tomorrow, then, is look at the schedule, hit a button, and we'll have the necessary charts, preassembled."
The next step in his facility, says Dr. Welti, is implementing EMR, which would present even more efficiency. "Not only do people not know what the cost is of paper charts in terms of supplies, they're also not accounting for the costs of time and effort," says Kent Barber of zChart.
He uses the example of simply admitting copying a patient's insurance card before a procedure: "You need to take the insurance card, and make copies – front and back – on new pieces of paper. Even though the patient has had to have this done how many times with the initial visit and the specialist visit, the information is not available," he says. "The most expensive thing was the time taken to do it; you have to look at the cost of paying personnel to do busy work. And what about what they could be doing if they weren't making photocopies? Staff might find they have more time to spend with patients, or you might find you have too many people employed."
5. Demonstrating quality through accurate reporting.
Quality reporting is key to ASCs' continuing to gain acceptance with the public and on Capitol Hill, notes Kathy Bryant, JD, the executive director of FASA in "Top Priorities for the Industry in 2008" on p. 3, and the demand for public reporting of outcomes is on the rise. HIT and its data-mining abilities can help with both. Further, ASCs are known for leading the way in the surgical marketplace, and staying a step ahead in the IT arena is a necessary component of that in the digital age. "I understand that market pressures can make it difficult for ASCs to step back and take a long view of the strategic technology components that will make them competitive and profitable," says Azadeh Farahmand, founder and CEO of GHN Online. "In the long-run, however, ASCs cannot afford not to do the due diligence required to develop and implement a technology vision that integrates transparency, interoperability and access. I believe these IT capabilities will define ASC market leaders."
6. Inventory management.
A good inventory technology system should allow an ASC to track inventory levels and better understand both inventory turnover and inventory value. This, in turn, can allow centers to hold less excess inventory and tie up less capital in inventory. Dr. Welti worked with a local company develop an inventory management and case costing system for Santa Barbara Surgery Center that costs about $300 a month. The system was implemented over the summer, but he's already seeing the benefits.
"We now know the exact costs of each case and across surgeons, so I can prove to surgeons what they could do to lower their costs," says Dr. Welti. "Being able to get the eye surgeons to come together on the lenses and the packs we use for eye surgery is going to be huge for us; just by getting two eye surgeons to do what another one of our surgeons is doing [in terms of supply costs] will save us $50,000 a year, easily." Acceptance of the system in the facility was driven by the fact it only takes a minute to use during any given procedure and doesn't encumber short cases, he says.
7. Scheduling.
By using Web-based scheduling software, ASCs can dramatically improve the use of their time and reduce both paperwork and staffing needed to track scheduling. Companies such as ScheduleSurgery.com report hugely improved reduction in case cancellations due to scheduling mistakes, improved confirmation notification to surgeons and patients for appointments, and reduced staff time devoted to scheduling.
8. Dashboard reporting.
Great managers want to know each day, not each month, the state of key variable such as collections, receivables, cash balances, cases scheduled, case mix and other key factors. Dashboard reporting through systems such as Source Medical, HST, Amkai and others are now available (and also can be customized) to enable managers to track their businesses and to plan and implement strategies much more efficiently and timely.
Market forces demanding more from manufacturers
Interoperability, or lack thereof, is another major issue. There are two ways around it: Buy individual modules according to your needs from one company, or seek out open-platform software that fits each task you want to be able to perform. There are advantages to both. The former simplifies HIT implementation, say experts, letting you deal with just one company instead of one or more during the initial process and later, when bugs crop up (as they inevitably will). The latter is more work, but also lets facilities better customize solutions.
The market is trending toward a wider variety of choices for ASCs, says Chris Beavor, senior vice president, sales and marketing, for Healthcare Systems and Technologies (HST): "Up till now, there was not a lot of choice. If you take the pulse of the market, it's starting to happen, and choice and competition breed better service, better pricing and better products." Which is why interoperability is coming into vogue.
"ZChart and other companies are recognizing that the data belongs to the surgery center, patient information belongs to the patient and the ASC, and we need to be pretty careful about whether we're seen as monopolizing those things, I think," says Mr. Barber.
"So we're going for interoperability and trying to make things as user-friendly as possible and not throw up a bunch of road blocks," so facilities will be more likely to pursue IT solutions.
More to the bottom line, says Mr. Petty, the ability to pick and choose can save you a lot of money. "For some tools, there's just not a measurable ROI," he says. "Hospitals benefit from robust materials management, but a small ASC doesn't have so much going on that it can't manually manage something approaching perpetual inventory. ASCs by nature need to look for solutions that fit into smaller, more limited-scope settings."
Coding and billing software, EMR, smaller scale materials management, scheduling software that interacts with the physician offices' software and dictation are among those that fit the bill, say the experts we talked to.