EHR Implementations Linked to Revenue Risk
As the rate of EHR adoption by hospitals increases, so does an unpleasant side effect: lost revenue caused by disruptions related to system conversions.
As the rate of EHR adoption by hospitals increases, so does an unpleasant side effect: lost revenue caused by disruptions related to system conversions.
Avoiding these shortfalls and expediting a smooth transition was the focus of a packed session at last week’s Healthcare Financial Management Association’s Annual National Institute conference in Orlando. Entitled “EHR Implementation and the Revenue Cycle,” panelists described the challenges that an electronic health record system deployment poses to a hospital’s bottom line and detailed the ways these challenges can be addressed.
Also See: EHRs Key to New Medicare Revenue Stream
“Setting expectations is very important,” emphasized Patrick McDermott, senior vice president for revenue cycle at Sutter Health. “You don’t want surprises.”
Before joining Sutter in northern California, McDermott served as vice president of revenue services at Presence Health, where he helped oversee a large-scale system conversion at the first six of the Illinois-based health system’s 12 hospitals.
In the first 30 days after the switch to its new EHR, Presence revenue declined by 25 percent, he told the conference attendees. But because senior management had been prepared for that possibility, it wasn’t the disaster that it might have been. Net annual patient revenue at Presence is $2.8 billion.
The EHR conversion currently taking place at OhioHealth is even more ambitious. The Columbus, Ohio-based 11-hospital health system “is going ‘big bang’ with our implementation,” explained Jane Berkebile, its senior vice president for revenue cycle. “We made the decision to cut over all of our facilities and our entire clinical network at the same time.”
But Berkebile “had heard horror stories” about the impact such a wholesale transition could have on a health system’s revenue and wanted to avoid any missteps. So she spearheaded the formation of “dart teams” to promote revenue capture. Annual revenue at OhioHealth is $2.8 billion.
These Drive Revenue Recognition Teams (DRRT) were used to drive awareness of revenue among the health system’s clinical groups. Before the system consolidation effort, these groups may not have even known what their revenue was, but now that all revenue data would be feeding into the EHR’s centralized database, it was critical that the leadership of these groups take responsibility for capturing and reporting that data. The teams were key elements in Berkebile’s campaign “to continually inform and educate top management on the potential impact of the new system on our revenue cycle.”
“A large-scale HIS conversion will require continued focus on inherent revenue cycle risks associated with the conversion,” observed Timothy Kinney, one of the two founders and managing directors of Chicago-based McKinnis Consulting Services and the moderator of the educational session. McKinnis worked with both Presence and OhioHealth on their EHR implementations.
“Both Presence and OhioHealth invested significant capital in their EHR system, with the understanding that over time a significant return on investment would be realized,” Kinney said.
But along with the potential upside, both hospital systems recognized “that there was significant financial risk associated with the revenue cycle implementation.”
The consultant then identified for the attendees a number of potential trouble spots that hospitals undertaking EHR projects need to closely monitor and manage. These include:
Organizational silos, McDermott noted, are “the natural enemy” of a centralized conversion, and highly centralized organizations are in a much better position to succeed with an EHR deployment. But where such centralization doesn’t exist, he agreed with OhioHealth’s Berkebile that revenue cycle management “needs to form SWAT teams to promote teamwork and a more collaborative approach.”
Motivating these teams, McDermott said, requires different tactics, including instilling a healthy dose of inter-hospital rivalry. During Presence’s conversion, the revenue cycle exec described how he would visit the leadership team at “Hospital B” and tell them all about the revenue capture achievements of “Hospital A.” Then he would say, “’But you know—I really think you can beat them.’ I would look them straight in the eye and say, ‘You know, you’re really my favorite hospital.’ ” He acknowledged: “I did this five consecutive times.”
Not to be outdone, Berkebile described how the success of her DRRT teams brought revenue awareness to clinicians who had never even considered revenue before. How well they were succeeding was brought home one day when she received an unexpected call from OhioHealth’s CIO. On his way to a meeting, he had chanced to overhear some hallway conversations, which baffled him at first and then made him very excited. “The nurses!” he told her. “The nurses are talking about revenue!”
And they weren’t just talking. “Some of those nurses,” Berkebile said, “went into the basement and found legitimate sources of hospital revenue that had never been reported before.”
Avoiding these shortfalls and expediting a smooth transition was the focus of a packed session at last week’s Healthcare Financial Management Association’s Annual National Institute conference in Orlando. Entitled “EHR Implementation and the Revenue Cycle,” panelists described the challenges that an electronic health record system deployment poses to a hospital’s bottom line and detailed the ways these challenges can be addressed.
Also See: EHRs Key to New Medicare Revenue Stream
“Setting expectations is very important,” emphasized Patrick McDermott, senior vice president for revenue cycle at Sutter Health. “You don’t want surprises.”
Before joining Sutter in northern California, McDermott served as vice president of revenue services at Presence Health, where he helped oversee a large-scale system conversion at the first six of the Illinois-based health system’s 12 hospitals.
In the first 30 days after the switch to its new EHR, Presence revenue declined by 25 percent, he told the conference attendees. But because senior management had been prepared for that possibility, it wasn’t the disaster that it might have been. Net annual patient revenue at Presence is $2.8 billion.
The EHR conversion currently taking place at OhioHealth is even more ambitious. The Columbus, Ohio-based 11-hospital health system “is going ‘big bang’ with our implementation,” explained Jane Berkebile, its senior vice president for revenue cycle. “We made the decision to cut over all of our facilities and our entire clinical network at the same time.”
But Berkebile “had heard horror stories” about the impact such a wholesale transition could have on a health system’s revenue and wanted to avoid any missteps. So she spearheaded the formation of “dart teams” to promote revenue capture. Annual revenue at OhioHealth is $2.8 billion.
These Drive Revenue Recognition Teams (DRRT) were used to drive awareness of revenue among the health system’s clinical groups. Before the system consolidation effort, these groups may not have even known what their revenue was, but now that all revenue data would be feeding into the EHR’s centralized database, it was critical that the leadership of these groups take responsibility for capturing and reporting that data. The teams were key elements in Berkebile’s campaign “to continually inform and educate top management on the potential impact of the new system on our revenue cycle.”
“A large-scale HIS conversion will require continued focus on inherent revenue cycle risks associated with the conversion,” observed Timothy Kinney, one of the two founders and managing directors of Chicago-based McKinnis Consulting Services and the moderator of the educational session. McKinnis worked with both Presence and OhioHealth on their EHR implementations.
“Both Presence and OhioHealth invested significant capital in their EHR system, with the understanding that over time a significant return on investment would be realized,” Kinney said.
But along with the potential upside, both hospital systems recognized “that there was significant financial risk associated with the revenue cycle implementation.”
The consultant then identified for the attendees a number of potential trouble spots that hospitals undertaking EHR projects need to closely monitor and manage. These include:
- *During the changeover, there will be two system environments to manage, increasing operational complexity and the potential for errors.
- *Legacy systems may be neglected at this juncture, when their performance needs to be maximized.
- *Reporting metrics may not carry over from one system to the next.
- *Deploying a centralized EHR requires a new collaborative mindset, and there may be cultural barriers to the change.
- *The health system’s organizational structure may be siloed and interfere with the integrated, organization-wide data capture and reporting that an EHR requires.
- *Inefficient workflow won’t get better; in fact, instead of being optimized, suboptimal workflow may simply be recreated during the transition.
Organizational silos, McDermott noted, are “the natural enemy” of a centralized conversion, and highly centralized organizations are in a much better position to succeed with an EHR deployment. But where such centralization doesn’t exist, he agreed with OhioHealth’s Berkebile that revenue cycle management “needs to form SWAT teams to promote teamwork and a more collaborative approach.”
Motivating these teams, McDermott said, requires different tactics, including instilling a healthy dose of inter-hospital rivalry. During Presence’s conversion, the revenue cycle exec described how he would visit the leadership team at “Hospital B” and tell them all about the revenue capture achievements of “Hospital A.” Then he would say, “’But you know—I really think you can beat them.’ I would look them straight in the eye and say, ‘You know, you’re really my favorite hospital.’ ” He acknowledged: “I did this five consecutive times.”
Not to be outdone, Berkebile described how the success of her DRRT teams brought revenue awareness to clinicians who had never even considered revenue before. How well they were succeeding was brought home one day when she received an unexpected call from OhioHealth’s CIO. On his way to a meeting, he had chanced to overhear some hallway conversations, which baffled him at first and then made him very excited. “The nurses!” he told her. “The nurses are talking about revenue!”
And they weren’t just talking. “Some of those nurses,” Berkebile said, “went into the basement and found legitimate sources of hospital revenue that had never been reported before.”
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