Whitepaper on Integration and EHR solutions at a fraction of the cost
The Price Fix by Big Box Healthcare Technology Firms
Are the major healthcare software and technology vendors (Big Box) price gouging? Probably not. They are a victim of their own solution strategies. Through acquired and some organic growth (McKesson, Eclipsys, Cerner, etc), they find their EIM solutions lose their agnostic approach. This is bad…very bad for health systems of all sizes. With very few exceptions, the vast majority of healthcare organizations DO NOT buy all applications and modules from a single stack player. How could they? Healthcare systems grow similarly – some organic, some through acquisition. When a hospital organization finds over the course of time, an application that is reliable, such as a billing system, there is tremendous reluctance to remove a proven solution that everyone knows how to use. Because the major technology providers in the healthcare space act as a “One Stop Shop”, they spend most of their time working on integrating in their own product suite with little to no regard to other applications. Subsequently, they find themselves trapped: they have to position all products/modules to maintain the accessibility and integrity of their data. This is problematic for the hospital that is trying to solve one problem but then must purchase additional solutions to apply to areas that are not broken, just to be able to integrate information. That is like going to the hardware store for a screwdriver and coming back with a 112 piece tool set with a rolling, 4 foot cart built for NASCAR. You will probably never use 90+% of those tools and will no longer be able to park in your own garage because the new tool box takes up too much space!
IT resources – including people – must be utilized. In today’s economy, leveraging internal IT staff to administer a solution post-deployment is a given. If those IT resources do not feel comfortable in supporting the integration plan, then status quo will be justified. This is the “anti” approach to providing solutions in the healthcare industry: the sales leaders from Big Box technology firms want their sales people in front of the business side of the organization and to stop selling to IT. While this is a common sense approach, the economy in 2010 mandates that IT has to at least validate their ability to administer new technology solutions. The prospect of long-term professional consulting engagements to follow post installation has been shrinking at the same rate as healthcare organizations profit margins.
Empowering the healthcare organization to utilize its existing IT staff to administer and develop with the new products is not part of the business plan when Big Box players market to the industry. It is the exact opposite – recurring revenue from lengthy, and sometimes permanent, professional services consulting engagements is part of the overall target. The initial price quote for a Big Box solution is scary enough, but the fact remains that it is still not representative of what the ongoing cost to maintain through consulting arrangements. This is a variable cost, which is difficult to predict, and drives finance managers and executives crazy.
What are the Financial Implications for a Healthcare Organization by maintaining the status quo?
Fraud detection is the focal point for CMS in their EHR requirements of healthcare organizations, Let’s take a deeper, more meaningful look at the impact of EHR. Integration, a prominent component of Enterprise Information Management in the New Approach, brings data from all silos of the organization, allowing a Data Quality component to verify and cleanse it. The next step would be to either send it back to its originating source in an accurate state and/or put it into a repository where it will be accessible to auditing (think CMS Sanctions Auditors), Business Intelligence solutions, and Electronic Health Records applications. With instantly accessible EHRs, hospitals and their outlying practices can verify patients with payors, retrieve medical histories for diagnosis and treatment decisions, and update/add patient related information. What impact to treatment does a review of a new patient’s history have for both patient and practice? Here are some elements to consider:
- Diagnosis and treatments that are based on previous patient dispositions – reducing recovery time, eliminating Medicare/Medicaid/Payor denials (based on their interpretation as to fault of the practitioner in original treatment or error incurring additional treatment).
- Instant fraud detection of patients seeking treatment for the same malady across the practices within the organization. Prescription abuse and Medicare fraud saves money not only for the payors, but the healthcare organization as well.
- The Association of Fraud Examiners states that 9% of a Hospital’s revenue each year is actually lost to fraud.
One overlooked but common impact is in the cost of managing patient records. Thousands of file folders in storage with new instances being added each time a new patient enters into the system. Millions of pieces of paper capturing patient information, payer data, charts, billing statements, and various items such as photo copies of patient IDs, are all stored in those folders. The folders are then stored in vast filing cabinets – constantly being accessed by filing clerks, nurses, practitioners and assorted staff. Contents of the files being misplaced or misfiled. Hundreds, if not thousands, of square feet being consumed for storage. The AHA projects that an enterprise leveraging Electronic Health Records will recover no less than 15,000 square feet of usable space. That space can be used for additional services, opening up new channels of revenue. The justification is easy: how much would it cost the hospital to build out 15,000 square feet for a new service? The average cost to build space utilized for Health Services is $65 per square foot, or $975,000 total. An EIM solution through the New Approach would be less than 20% of that. Not only has the EIM solution reduced dollars lost to fraud, lowered the days for payor encounters to be paid, increased cash on hand, but it will also open up new services for the patient community and revenue back to the healthcare organization.
The Cost of Healthcare Information
Are the major healthcare software and technology vendors price gouging? Probably not. They are a victim of their own solution strategies. Through acquired and some organic growth, they find their EIM solutions to lose all agnostic approach. This is bad…very bad. With very few exceptions, the vast majority of healthcare organizations DO NOT buy all applications and modules from a single stack player. How could they? Healthcare systems grow similarly – some organic, some through acquisition. When a hospital organization finds over the course of time, an application that is reliable, such as a billing system, there is tremendous reluctance to remove a proven solution that everyone knows how to use. Because the major technology providers in the healthcare space act as a “One Stop Shop”, they spend most of their time working on integrating in their own product suite with little to no regard to other applications. Subsequently, they find themselves tapped: they have to position all products/modules to maintain the accessibility and integrity of their data. This is problematic when for the hospital that is trying to solve one problem but then must purchase additional solutions to apply to areas that are not broken. That is like going to the store for a screwdriver and coming back with a 112 piece tool set with a rolling, 4 foot cart built for NASCAR. You will probably never use 90+% of those tools and not be able to park in your own garage because the new tool box takes up too much space!
IT resources – including people – must be utilized. In today’s economy, leveraging internal IT staff to administer a deployment is a given. If those resources do not feel comfortable in supporting the integration plan, then status quo will be justified. This is the “anti” approach to providing solutions in the healthcare industry: the sales leaders from big box technology firms want their sales people in front of the business side of the organization and to stop selling to IT. In the economy today, IT has to at least validate their ability to administer new technology solutions as the prospect of long-term professional consulting engagements to follow post installation is much smaller.
Hello world!
e-cuity Corporation is here to provide solutions and not products to the industries we hold subject matter expertise.
e-cuity's Blog 