Software Solutions: Winning the Technology

• By Rudy Matousek, Phil Page
• Mar 01, 2005

Intense financial pressure from the five year consumer price index (CPI) freeze, competitive bidding, FEHBP-based reimbursement cuts and the overall fallout from the Medicare Modernization Act has forced providers to have to find new ways to operate more cost efficiently. The resulting falling margins and the emergence of larger competitors, means that providers have to cut costs, to compete more effectively in the health care industry today.

Cost "savings" has traditionally come in various forms. Anything from negotiating better prices with vendors for products; reducing interest to banks by improving cash flow and thereby reducing dependency on loans; improving productivity resulting in the need for less staff; have positively impacted the bottom line for most businesses. However, in today's competitive marketplace, this may not be enough.

Companies in various industries have faced similar challenges to their very survival, not unlike the challenges facing many HME and infusion providers today. In many cases, companies have more than survived, they have prospered by taking advantage of their circumstances and reinventing the way in which they conducted their business. Their solution? The proper implementation of new technologies, including both hardware and software solutions, results in improved productivity through more efficient utilization of personnel, better cash flow and control over inventory, development of new product and service offerings, and a more responsive level of customer service. In fact, The New York Times recently reported a study that showed such substantial productivity gains from computerization, that it is sited as being the major reason for the dramatic reduction in the need for middle management. The success of Federal Express, Dell, and Jet Blue, to name but a few, are examples of companies that were willing to make substantial investments in technology and saw a considerable return on investment, including the ability to rise to a level of industry leadership.

While most health care providers have firsthand knowledge of the positive impact of technology, they have generally failed to make a similar investment in their own business. For example, many of the products available to patients in the home healthcare market, by manufacturers of medical equipment, provide self-diagnostic capabilities, enabling patients to be more knowledgeable and involved in their care, and directly reducing labor cost for employees to manage and maintain equipment. A home health care provider may point to their glorified billing software as an example of their innovative use of technology, but have the majority of their staff still pushing paper from one department to the next, lengthening DSO and reimbursement timeframes.

In health care, the average investment in information technology, including both computer hardware and software, is only about $3,000 annually per employee, compared with $7,000 per employee on average, for private industry and nearly $15,000 per employee in the banking industry. There is an important lesson to be learned from these statistics, particularly as we have seen in other industries. Emerging leading players in health care will, and in fact are, already willing to take advantage of all that technology has to offer. Their success in doing so will come at the expense of other providers who fail to compete at this level. My own experience from leading technology-based companies for more than 25 years, is that small and mid-size companies will argue that they are not in direct competition with the bigger players, and perhaps in the past that was true. Today technology makes a considerable difference, regardless of the size of the company based on number of staff and revenue. In the computer industry, manufacturers sold product to wholesalers, who sold to resellers called dealers or retail stores, who in turn sold the product to the end-user. Most resellers were not threatened by the emergence of manufacturer direct product sales to the end user. Industry leaders argued that it was of no concern, and that they would fail as this is a "personal business" requiring direct contact with the customer. Some kid out of Texas with a company called Dell proved them wrong! The point is, today it is difficult if not an outright mistake, to make decisions based on the past. Technology has proven to be both a survival tool in the ever-changing business environment, as well as, a necessity to compete against the largest players within any industry.

So how can HME and infusion providers begin to analyze what they need from a technology perspective and ultimately benefit from the technology they choose to implement? Proceed by looking for inefficiencies in your operational processes and then identifying how you might improve your services. Follow the paper. Chances are your staff is spending a lot of time shuffling paper around, doing redundant work, utilizing multiple systems that are not integrated and searching through file cabinets in their daily operations.

After evaluating your operational needs, problems and inefficiencies, imagine a different kind of operation. Your resources are allocated more efficiently, freeing up staff to take on new tasks, customer service is improved, resulting in a higher level of patient satisfaction. Overtime is reduced, thereby reducing payroll costs. Your DSO and denial rates drop, and virtually all of your Medicare, Medicaid and Commercial claims are sent electronically, improving timely filing for reimbursement and cash flow. "Incomplete" orders and unclean claims are intercepted, before going out, reducing the time consuming and expensive process of resubmitting claims or redelivering equipment, supplies or drugs. CMNs are sent to the doctor electronically, reducing turn around time. Documents are accessible from within the electronic patient record, eliminating the flood of paper and associated inefficiencies. The business is growing and instead of hiring new employees just to keep up with the workload, your existing staff is able to handle more volume resulting in higher profits.

The next step is to meet with the leading software vendors to see what functionality they offer that will provide true benefit and successfully support your new and more efficient business processes. To help in this endeavor, the list below will serve as a starting point, showing the functionality/feature to look for in a new system, and the potential benefit of that functionality. Remember, you may find that multiple systems are needed...one for billing, another for document imaging, a third for bar coding, etc., but ultimately one integrated system will produce the maximum efficiency. In addition, an integrated system will eliminate technology vendors pointing at each other when there is a problem, as well as, most likely the most cost effective solution.

General Automation Features	Benefit
Automated scheduling features for recurring orders	Eliminates the need to continuously hand enter recurring supply and equipment orders
Document Imaging & Storage	Eliminates time wasted researching for documentation in file cabinets and improves overall communication and efficiency of operation
General Ledger Export Feature	Eliminates the time required entering data into the G/L without re-keying
HL7 Compliant Com Object Features	Allows for interface to hospital and other health care systems?eliminating double entry of data into
Bar Code Module	Reduces incidence of theft of products and controls inventory costs and captures delivery information at the patient's home, virtually eliminating the order confirmation process
Integrate with mapping software, i.e. - Microsoft MapPoint	Improves efficiencies of your dispatching operation
True Point of Sale module for retail operations	Allows for the management of data for products pricing and inventory in one place, at one time
Point of Care Module	Captures patient clinical data in the field, eliminating re-entering the information
Specific Operational Automation Features	Benefit
Billing Hold functionality, including user defined reasons for holding claims	Prevents billing unclean claims
Generation of purchase order requests right from order entry	Avoid inventory requirements from falling through the cracks
Equipment Maintenance Tracking	Know where your high-cost assets are at all times
Driver Manifest Generation	Set delivery work time, schedules for drivers
Collection module with automated triggers for follow-up	Allows for timely follow-up and re-filing of claims for more prompt payment
Transaction Transfer capabilities	Ability to globally move billing records from one carrier to another in the event that patient insurance has been changed, eliminating the need for multiple adjustments and re-entry of revenue
Data Measurement Features	Benefit
Integrated System with industry standard database i.e.-Microsoft SQL	Allows for access to your data in an open format for extraction, management and reporting
Integrated patient database	Allows access to all patient information from one place
User-defined required fields	Allows for user customization in collecting data that is important to your organization and business goals
Integration with third party products such as Crystal Report Writer, Cognos, etc.	Reduces time needed to create specific, user-defined, management reports

This article originally appeared in the March 2005 issue of HME Business.