HIT Think

New ways providers can use IT to cut management costs

For the healthcare industry to function effectively, patients, government, pharmaceutical companies, payers, PBMs and providers collaborate to provide low-cost products and services while meeting regulatory guidelines. Constant market forces, regulatory demands and optimization needs necessitate continuous management of rising costs, compliance needs, quality of service and consolidation across the industry, just to name a few.

These important components can be better served by elevating the role of IT from being positioned as a supporting business to becoming a core part of the enterprise. In fact, information technology is a key component of the success of the healthcare industry and must be aligned and coordinated. At the same time, the boundary between traditional business and technology has never been more diffuse. Revenue-generating business processes and the systems implementing them need to be one and the same.

Instead of simply using IT for enterprise resource platforms, finance and accounting systems, IT is taking a more central role in business decisions. Startups like Uber provide a great example of instances in which technology “drives” the business. Because we cannot control the rapid pace of business, we should instead focus on managing the operational consequences and close any gaps.


Hospital administrative costs in the United States are high, when compared with similar expenses in other countries, with some estimates putting that figure as high as 25 percent. This represents a prime opportunity for making more dollars available for patient care. Rising operational costs are fast becoming unsustainable, making it difficult for companies to run their operations profitably.

As evident from the scale and expense of stifling CMS audits, parts of the compliance business processes are still conducted manually, and the results are unreliable; notwithstanding the pain caused to the impacted population directly, the confidence in health outcomes decreases. There’s some comfort in the expertise available in the market to provide high-cost, short-term solution, but there is still a need for innovation to create more products that are highly configurable to the unique needs of the healthcare system.

The changing political climate will create more situations where that system has to adapt quickly to new guidelines. Further, continued reliance on manual processes will only create additional unpredictability and cost pressures. Regulatory compliance demands are essential to the transparent and accountable functioning of the healthcare system.

Even with this market pressure, there is a way to lower costs and bring significantly more efficient processes to all of the aforementioned constituents, thus leading to streamlined effectiveness across the board. Automation is a core first step to closing the gap between business processes and IT systems to rein in operational and administrative costs. Those costs can include: charges incurred to provide a service to the end user for medical management; claims processing; billing; coding; customer service; sales & marketing expenses; and compliance with various Federal and State regulations.

Automating healthcare IT platforms is akin to Henry Ford’s revolutionary automation of the assembly line. In the case of healthcare, IT systems and solutions flow much faster with automation, leading to more accurate and less expensive outcomes. Automation puts an end to the need for an army of consultants searching for a solution, in turn eliminating work effort redundancy, and streamlining the system development lifecycle, ultimately allowing more time for true innovative solutions.

Traditionally, pure IT delivery costs have been managed by leveraging labor arbitrage and pushing vendor margins with mixed results in quality of product delivery. Now, the limits inherent in that approach are being reached, with quality being dangerously compromised. This, in turn, is causing friction and reduced confidence in the effectiveness of IT organizations.

Fortunately, the development of new IT innovations that bring automation is addressing challenges in the areas of client intent capture; benefits management; end-to-end traceability; monitoring and alerting; and development operations. This new automation technology can be applied expeditiously and are proving to lower costs from 20 percent to 50 percent. And, while these innovative solutions provide sustainable, predictable platforms to address cost and quality challenges in the long run, they also provide immediate relief on the cost front and increase the bandwidth of available staff to focus on providing quality healthcare.

These products also close the gap in an industry that is experiencing an increase in mergers and acquisitions activity. Configurable and automated solutions are required to uncover the gaps between merging systems and automate the end-to-end process of migration and certification of the migrated results. There are metrics available that demonstrate the effectiveness of these solutions, in particular the data required to prove to the business side of the organization positive impact to members and patients.

Our healthcare system has faced unprecedented changes in the last few years. In essence we are charged with developing cutting edge data management innovation while facing price containment strategies, complexities, mergers, acquisitions and system overhauls. The clear solution is to automate processes, allowing us to be a step ahead of today (and two ahead of tomorrow) – in overall efficiency, accuracy and sustainability.

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