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Finding the Right I.T.
Health Data Management Magazine, March 1, 2008
Selecting the right information technology to support a health care organization’s business objectives sometimes involves carefully measuring whether the technology offers a tangible return on investment. For example, AmeriBen/IEC Group, which has a third-party administrator subsidiary, invested in claims analysis technology after an extensive test determined the software would help it save money by avoiding paying fraudulent claims.
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However, there’s no other “silver bullet” strategy that they are using either, Holland contends.
“Mature organizations still do some kind of business case analysis on every capital investment,” he says. “But most use other various techniques to analyze the costs and benefits for I.T. alternatives. And those can include both a quantitative and qualitative analysis of the technology.”
In selecting I.T., some health care organizations are weighing such potential benefits as improved customer satisfaction for hospitalized patients or improved efficiency in an emergency department or other unit. Others are investing in emerging technologies, such as next-generation wireless networks, that they’ve concluded are essential for providing better access to clinical data at the point of care.
ROI Still Used
Four years ago, AmeriBen/IEC Group didn’t know how much money its TPA subsidiary was losing to claims fraud, abuse and overpayments.
The Meridian, Idaho-based company, which administers benefit plans for more than 70 employers and universities, didn’t have the ability to analyze claims for such issues, says Jon Aubrey, senior vice president.
The company had claims processing and editing software, but these technologies weren’t able to evaluate claims history, which is required to assess possible fraud, abuse and overpayments. And AmeriBen/IEC didn’t have the time or resources to do it manually, Aubrey adds.
“Our systems show us the equivalent of a still image in a camera, rather than the entire video we’d need to do such analysis,” he says.
When the TPA received a call from a vendor that offers claims analysis technology, it immediately gave the system a test run. For three months, AmeriBen/IEC used software from HealthCare Insight LLC, Sandy, Utah, free with 60 of its employers.
Although an analysis report from the pilot showed the software helped the TPA refrain from paying 1% to 2% of its claims because of fraud, abuse and overpayment, the quick savings didn’t immediately translate to a green light to purchase it.
Instead, AmeriBen/IEC first wanted to ensure its staff could handle managing the technology in addition to its claims systems. Additionally, the TPA wanted to see if the employers it serves would be willing to pay for the use of the software so the savings could go further.
“TPA profit margins are slim,” Aubrey says. “So to absorb the costs associated with the software, we had to ask our clients to pay for the service.”
After satisfying all its purchase prerequisites, AmeriBen/IEC decided to fully implement the system in mid-2004. Now about 70% of its employer clients are paying the TPA to use the analysis service with their claims.
Qualitative Impact
In addition to determining its ROI, AmeriBen/IEC also wanted to measure the impact its potential technology purchase would have on staff before signing off on it. So while the vendor’s staff integrated the analysis software with the TPA’s existing claims systems for the pilot, it also educated AmeriBen/IEC staff on how to manage the new application.
After concluding that running the software would be too much for the TPA’s staff, its executives asked if the vendor could host it for them via the application service provider computing model, Aubrey says. “During the trial period, it was taking several claims processing employees to run the software,” he says. “So we set up a process where the vendor did more of the work. Now we have one full-time claims processor and one that just works on the HCI software.”
The processor dedicated to the analysis software reviews a report each morning from the application that displays the possible fraud, abuse and overpayment claims from the previous day’s claims. The report divides the accusations into six categories and highlights the amount of money the TPA can save if each one isn’t paid.
AmeriBen/IEC also developed a plan to help it recoup more of this savings. Now it bills every employer a percentage of the value of their fraud, abuse or overpayment claims the software found each month.
“Some months their fee is higher for the service,” Aubrey says. “And if they aren’t seeing any savings from it they don’t pay. But that’s never happened.”
AmeriBen/IEC also uses the software to track which providers are submitting fraudulent, abusive or overpayment claims and is disclosing the information to its employer clients. Such information has given the TPA more credibility in its market, Aubrey contends.
“The software has helped us gain new customers and improve relationships with existing ones,” he says. “It’s really differentiated us from our competitors in the market.”
In addition to ROI, some health care CIOs say customer satisfaction comes into play when they identify technologies to support various business objectives.
Marlton, N.J.-based Virtua Health, for one, needed to update the in-room televisions across the four hospitals in its delivery system. But executives wanted the technology to also help staff better communicate with patients, says John Bloomer, vice president and CIO.
Like AmeriBen/IEC, Virtua Health came up with funding sources before it solidified its I.T. purchase. For example, the delivery system’s foundation volunteered to finance the purchase. Further, Virtua Health executives thought they could gain some revenue from the technology by requiring patients to pay for various services it offered, such as pay-per-view movies or gift shop purchases.
Virtua Health and its foundation then found four communication system vendors and developed some specific parameters to use to evaluate and compare each of their products. These parameters included:
* Functionality;
* Ability to integrate with the delivery system’s current infrastructure;
* Lifecycle cost; and
* Ability to develop a long-term strategic partnership with the vendor.
While ROI also was part of the decision-making process, it was challenging to pinpoint the financial benefits, Bloomer says.
“It was a break-even deal at best,” he says. “But what pushed it over the edge to make it a reasonable investment were other ‘soft’ factors. Its value is on patient satisfaction and communicating with patients.”
Last September, Virtua Health purchased the new patient television/communication system from GetWellNetwork Inc., Bethesda, Md. The vendor helped the delivery system implement the technology, which includes a video server, software development tools, and televisions and wireless keyboards for each patient room. The video server now runs over a parallel network at Virtua Health, while the rest of the system’s features, such as Internet access and Web page design, are delivered over its existing wireless network.
After the system went live, two full-time and two part-time vendor employees stayed on to help maintain it, train clinical staff to use it and develop additional content that it can deliver to patients. This assistance also played into Virtua Health’s decision to purchase the technology, Bloomer says.
Lacking In Hired Hands
“We don’t have the hired hands to help us with this technology,” he says. “So it’s made a difference to have the vendor’s folks on board. We’re not sure where this system will go long term for us, so we didn’t want to hire our own people to manage it.”
The vendor’s employees have helped Virtua Health also use the system for clinical applications. For example, they teach staff to program in reminders for patients to watch health videos and answer pain assessment questions that appear on their television. Further, the delivery system hopes to use the technology to test eye-hand coordination in stroke patients, Bloomer says.
But while most patients use the system just for regular television watching or Internet surfing, they also have expressed their gratitude for it, he adds.
“We work hard on patient satisfaction and it wouldn’t be this high without the system,” he says.
While some technologies might seem like a good investment because they can offer a quick ROI or improve patient satisfaction, others simply must be financed for the good of the organization, some industry experts say. These vital technologies may include an upgraded clinical system or wireless network, says Holland, the consultant.
“In many cases, hospitals have first-generation wireless networks that were designed for limited use and have limited bandwidth,” he says. “And now they are looking to upgrade them because they’ve realized the benefits that can occur when they deliver information at the point of care.”
A Need For Speed
Executives at Medical X-Ray Center, for example, anticipated they needed to upgrade their network two years ago after they began using the ConQuest open-source picture archiving and communication system. The Sioux Falls, S.D.-based radiology practice had a dedicated 100 Mbps wide area network connection to Avera Mckennan Hospital, which contracts for its radiology services.
The network, which was originally established for limited electronic communication between the two facilities, quickly became taxed as Medical X-Ray’s 31 radiologists started using it to upload and download image files that can be nearly 500 MB in size, says Rod Sevening, IS manager.
“We figured we needed to upgrade to at least 700 MB bandwidth to manage these images,” he says.
While Sevening knew exactly what technology Medical X-Ray needed, he wasn’t sure what kind of ROI it would yield. But he anticipated he needed to make the purchase anyway to improve workflow and patient care.
He first tried a Band-Aid approach and installed a redundant, leased 1.5 Mbps T1 connection to the hospital, which is about 1.5 miles from the practice. But the additional network still didn’t offer enough bandwidth. Then he looked into leasing a high-speed fiber network connection through a local I.T. provider. But at $10,000 a month, the technology was out of the practice’s price range.
Finally, Sevening purchased outdoor Gigabit Ethernet wireless network technology from BridgeWave Communications Inc., Santa Clara, Calif. The vendor helped Medical X-Ray install two of its 60 Ghz and two 80 Ghz antennas on a city water tower to enable a line-of-site network connection between the practice and the hospital. Sioux Falls Two Way Radio, a local wireless technology service provider, also helped install and calibrate the antennas, as well as configure interfaces to the network.
After the new network went live, Medical X-Ray staff immediately noticed the difference in speed, Sevening says.
“It’s helped improve staff productivity and eased patient anxiety,” he says. “It’s also been a night-and-day difference in maintenance. We spend less than 30 minutes a week monitoring it because we don’t get calls about incomplete image transmissions or lack of server access anymore.”
While Medical X-Ray never had a projected ROI for its new gigabit network, the practice made up the full $75,000 purchase price within eight months because it enabled staff to improve productivity 30%, Sevening says.
Surprise Revenue
When executives at Mount Sinai Medical Center began searching for a new emergency department information system in 2003, ROI or additional revenue opportunities were at the bottom of their wish-list of potential benefits. The New York City-based hospital instead wanted a system that could enable electronic documentation and integrate with its existing clinical information systems, explains Kevin Baumlin, M.D., director of informatics and associate professor.
“Our major focus was improving communication and care,” he says. “We wanted to decrease turnaround time and not lose clinical information to illegible charts.”
Baumlin and other executives started their software search by evaluating various technologies at an emergency medicine conference. Then they submitted requests for proposals from the top four vendors.
After executives analyzed the responses, they invited the vendors to display their systems for clinical staff. The executives and clinicians then scored the systems based on ease of use, integration ability, functionality and other metrics, Baumlin says.
Mount Sinai ultimately chose the ED PulseCheck system from Picis Inc. Wakefield, Mass., and fully implemented the system by the end of 2003. Now all emergency department providers use the system during each step of the patient care process from point of entry to triage to clinical documentation and order entry. The hospital also is using some of the system’s other features, including patient tracking, automated discharge instructions, and medication allergy/interaction checking, Baumlin says.
In the years since implementing the system, Mount Sinai has been able to meet its original goals for the system by eliminating “lost” charts, raising its end-of-month chart completion from 65% to 95% and increasing charge capture by 50%.
But the improved charting and charge capture also has led to some more concrete ROI for the system. The hospital has increased physician revenue from $2.5 million to about $8 million in 2007 and hospital revenue from $9.8 million to about $14 million.
“We had been losing revenue from poor documentation,” Baumlin says. “The system has enabled us to improve documentation, which leads to increased revenue. It’s quickly paid for itself.”
Baumlin believes even the most costly clinical system purchases are usually worthwhile. “Most health care I.T. investments require an initial financial outlay, but they will pay for themselves eventually,” he contends.
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