Hospitals and the Recession

Everyone has been impacted by the recession, in one way or another. Whether it be job loss, budget cuts, decrease in sales, etc. every industry across the board has been impacted and every consumer has been affected.

According to this article, “Health care is the only private-sector economic activity that has added jobs continuously since the recession began.” Does that mean that healthcare has not been negatively impacted by the recession? Of course not. We are all feeling the pain, in one form or fashion.

Written by Jeff Goldsmith, Hospitals and the Recession was featured in HHN Magazine online on July 6, 2009.

“The reality is that, despite the employment growth, the U.S. health system is in recession. Inpatient hospital admissions and elective surgery, as well as physician office visits and prescriptions filled, are all down by low- to mid-single-digit amounts. Colleagues in health insurance report that 2008-2009 health costs are trending in the 6 percent or 7 percent a year range. Only during the mid- 1990s post-Clinton-reform, managed-care panic have we seen this cost trend lower for a longer period of time.”

“Health care demand actually began softening before last fall’s thunderous financial market collapse. The downturn began in 2007 and may have been a leading indicator of a spreading family-cash-flow crisis….Most hospitals report rising bad debt and charity care, as people lose health insurance coverage along with their jobs. It should concern hospital leaders that the customer is less and less able to afford their product.”

Money is of great concern for consumers, providers, insurers, etc. Consumers are less and less able to afford healthcare. Hospitals’ case volume is down. Hospitals are also going to face challenges in Medicare funding reductions and might have to run their hospitals on “regular gas”. {Be not dismayed…}

“Demand for our services, while softened, has not collapsed. Unlike the real estate and financial services sectors, we have not squandered the confidence of our customers. People in crisis appreciate that we are a vital part of their safety net, and know that we are there for them when they need us. If we can accomplish the urgent task of health reform, we can affirm that promise for all of the people of our country. The hospital industry will enter the next decade chastened by this economic crisis, but stronger for it.” {But, be wise….}

So where does this leave us? We need to do the best with what we’ve got. Hospitals need to maximize their resources. Budgets are getting tight; capital spending budgets, especially. But spending can’t just automatically stop. With healthcare, you’ve got to keep moving forward, especially in the world of technology solutions. So providers must ensure they are spending wisely.

Spend some to get some. Spend money on solutions you know are going to provide cost reductions. When possible, spend on solutions that can provide revenue increase. ComplyMD is a great budget-friendly solution for these tight times. Decreasing your cost of transcription, while building better DRG’s with comprehensive documentation, ComplyMD can save you valuable dollars while helping ensure you’re not ‘leaving money on the table’.

Money, Money, Money: The Stimulus

Since President Barack Obama signed the $787 billion American Recovery and Reinvestment Act of 2009, the words “stimulus” and “EHR” go together like bread and butter in the world of Healthcare IT. This article from our friends at Modern Healthcare Magazine’s February 23, 2009 edition titled “IT’s the Money” gave us a great overview on what some experts had to say about the Stimulus money’s impact on EHR adoption among hospitals and office-based physicians.

“Industry officials said the federal money and standards setting provisions in the new law will be the twin charges that burst the financial dam that has kept electronic health-record system adoption at relatively low levels.”

“The Medicare and Medicaid incentive programs will more directly subsidize adoption of EHRs by providers. Hospitals will receive IT payments over a maximum period of four years…..For those hospitals using “meaningful” EHRs during fiscals years 2011 through 2013, the amounts will be a 100% payment the first year, and 75%, 50% and 25% the subsequent years.”

Here’s a graph depicting the bonus structure for early EHR adopters:

Health I.T. Carrots

With these Health IT Carrots, comes Health IT Sticks. “The stimulus law calls for Medicare reimbursement penalties for physicians how delay adoption of health information technology until after 2014.” If you start in 2015, your Medicare penalty is -1%; 2016 penalty is -2%; 2017 penalty is -3%; 2018 penalty depends on overall adoption rate.

So what does all of this have to do with ComplyMD, a non-EHR healthcare solutions company? It has everything to do with ComplyMD. One of the gray areas of this whole carrot is “What is the definition for ‘meaningful use”? (We’ll get more into that next week.) But for now, I want us to focus on the plain fact that Electronic Healthcare is coming. Like it or not, every facility, every physician, every nurse, every hospital employee, every patient, everyone needs to accept the fact that technology is changing patient care. The government is pushing for adoption of EHRs; facilities are putting it off. The government is giving incentives for early adoption; some facilities are still putting it off. As we’ve discussed before, successful adoption hinges on a facility’s readiness for such a massive undertaking as EHR adoption.

Does IT promote Efficiency in Healthcare Facilities?

{The right technology, in the right facility, with the right people….}

This is part one of a two part series from Modern Healthcare Magazine’s May 26 article “Providers Turn to IT for Efficiency, but is it Working?” .  Though they start off discussing IT in laboratories, I believe we can take their words and apply it to any area/department of a healthcare facility.

“Indeed, technology plays a role in productivity across the board, and the healthcare industry is no exception. From faster laboratory results to real-time electronic information in emergency departments to online ‘dashboards’ that monitor performance metrics – providers have begun to embrace automated processes to improve their operations.”

Automated processes, along with point-of-care electronic systems can greatly increase operational efficiency. The keys to success (in my opinion) are: (1) a great implementation, which leads to great adoption and (2) an already well-run facility that’s ready for such an IT implementation.

Despite the boost in efficiency that IT can bring to a facility, there are usually some major hurdles to overcome.

“Still, there are significant challenges to adopting various technologies. Critics of electronic health records have said that the technology can be confusing and hard to implement, and it winds up disrupting work and limiting productivity.”

That is a very valid point. Technology can be confusing and often disrupting. And yes, if it’s not implemented right, it could perhaps limit productivity. That’s why you must have the right technology, implemented at the right facility, with the right people who are ready for such a change. Technology implementations will always bring about change. Naturally, we as humans are often resistant to change, especially when we what we’re doing now “works”. But bottom lines aren’t maximally impacted by what “works”. Patient care isn’t improved by simply what “works.” If you want to be competitive in this day and age, you better get ahead of the curve. Your facility better be ready for change, constant change.

Operating Efficiently

This short article brings to light the lack of lack of intra-operative IT system implementations in the U.S., along with the hope for “an uptick in adoption of health information technology under the twin prods of a falter economy and IT funding courtesy of the economic stimulus package.” With intra-operative being the least penetrated of the four areas of the OR market, it could potentially hold the greatest amount of opportunity. And with the stimulus package funding, the area with the most opportunity could be the greatest beneficiary of the funding. Here’s a little proof on how much the OR impacts a hospital’s bottom line: “The reality is the OR is the cash-flow engine of the hospital” says Kermit Randa, senior vice president of sales and marketing for Surgical Information Systems. “A hospital generates on average 65% of their margins from the operating room. According to the Joint Commission, 55% of the infections happen in the OR and well over one-third of the supply costs happen in the OR. You show me a poorly performing OR and I’ll show you a poorly performing hospital.”

Efficiency, Comprehensiveness and Cost-effectiveness when comparing Dictation and Electronic Templates for Operative Reports

http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1560865

Here’s a great article comparing dictation to electronic templates. The results are pretty amazing. Looking at the time, efficiency, comprehensiveness and cost-effectiveness of the two could turn some heads towards electronic templates.

The study was done in Wishard Memorial Hospital’s (Indianapolis, IN) OB-GYN Department. During the four four-week study blocks, they performed 478 procedures on 440 patients corresponding to 5 selected study procedures. They evaluated the effects of templates on timeliness of completion, comprehensiveness and costs, and effort required vs. standard dictation. 

Most in the healthcare industry would agree that: “Dictated reports are frequently incomplete or delayed.” However, it could take some results like the ones in this article to show that: “Electronic note templates could potentially improve this process.”

“Templates resulted in dramatically faster times to the presence of a verified operative report in the medical record compared to dictation services (mean 28 v. 22,440 minutes). Templates increased overall compliance with national standards for operative note documentation and avoided transcription costs. Documentation with templates took slightly more time than dictation (mean 6.77 v. 5.96 minutes; P=0.036), not including the additional time necessary to subsequently verify dictated reports. We conclude that electronic note templates can improve the timeliness and comprehensiveness and operative documentation while decreasing transcription costs and requiring minimal additional effort on the part of the surgeons.”

Accurate Charge Capture: Help Physicians Acquire Appropriate Documentation

“With profit margins squeezed so tightly in the healthcare industry, it’s hard not to think that any loss of revenue would not affect the bottom line. Accurate charge capture and claims denial management processes mean not only improving cash flow, but also protecting revenue that the provider is entitled to—and that all adds up to a healthier bottom line.”

“Improving Cash Flow with Better Charge Capture & Denial Management” MedAssets & HFMA. October 2005

Yes. We are all aware of tightly squeezed profit margins. But, do we know how to improve those profit margins? Accurate charge capture and claims denial management are two such areas that could help improve a healthcare organization’s bottom line. Let’s look at inaccurate charge capture vs. accurate charge capture. Inaccurate charge capture can be caused for several reasons, such as undercoding (loss of revenue), overcoding (risk of fraud), lack of knowledge in accurate documentation, lack of tools to capture accurate charges, etc. The list goes on and on.