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From the June 2002 Issue |
Gaining With Integration Three healthcare organizations use integrated financial-clinical systems to achieve ROI, process improvement and patient care objectives.
As healthcare organizations work to strike a balance between improving care and reducing costs, many look to integrated financial and clinical systems as a resource on both fronts. An integrated financial and clinical system can improve clinical best practices and condense the revenue cycle, resulting in significant cost-savings. For the past decade, the best-of-breed approach to information technology has been popular. According to Rose Ann Laureto, principal for EncoreExcellence, a healthcare consulting firm on assignment at Kettering Medical Center Network, financial systems matured faster than clinical systems. Up until recently, it was difficult to find a system equally mature and strong in both clinical and financial areas.
In addition, many believed that interface engines would solve integration problems. “When you connect two systems together, you lose a little functionality from each. The more systems you connect, the more potential functionality is lost,” says Laureto. True integration is still a rarity according to Dr. John L. Haughom, senior vice president of healthcare quality at PeaceHealth. “It’s relatively easy to achieve superficial integration by putting applications side-by-side on the same system. However, unless the database is truly integrated, the data won’t present an integrated picture. You need to be able to ask and answer detailed questions that couple financial and clinical information.”
Here is a look at how integrated systems helped three different organizations stay ahead of the curve in their markets. Organizational Profiles Kettering Medical Center Network, Dayton, OH, is listed as one of America’s Top 100 Hospitals, according to U.S. News and World Report magazine. The LastWord Enterprise Clinical and Financial system has been installed since 1989 in two facilities and was recently expanded to support the entire network of four hospitals. The system currently supports financial, clinical and administrative processes, and the organization plans to move forward with advanced clinical functions, such as physician order entry and nursing documentation. The Lehigh Valley Health Network (LVHN), one of the largest teaching facilities in Pennsylvania, has three clinical campuses and has been using LastWord since 1993. LVHN is a major clinical campus for Penn State University’s College of Medicine at the Milton S. Hershey Medical Center. LVHN’s information system supports ordering, care documentation, pharmacy, lab and emergency services, as well as scheduling, registration and patient accounting. They are currently in the process of installing physician order entry. PeaceHealth is an integrated delivery network that spans five regions, with facilities in Washington, Oregon and Alaska. Their vision for a community health record—an integrated electronic medical record for every patient in every region housed in a single database—is being steadily realized since the LastWord system was first installed in 1996. The integrated system supports financial, administrative and clinical processes, including online nursing documentation. ROI Benefits An integrated clinical and financial system delivers long-term return on investment (ROI) as a result of a faster revenue cycle, better data integrity and readily available clinical information. Integration results in a lower total cost of ownership related to IT resources, training and support. At the same time, reliability becomes a major factor, because the cost of downtime skyrockets when the system supports mission-critical clinical and financial processes. For LVHN, the initial payoff from moving to an integrated system came more quickly than expected. Sandra Colon, director of patient accounting, promised the board of directors a $14 million return on investment in three years. That amount was returned in only 18 months.
For all three organizations, the integrated system shortens the revenue cycle, because having access to the clinical record simplifies the process of releasing information to payers. LVHN cut accounts receivable (AR) days from 72 to the current average of 59.8. For PeaceHealth, AR days for all five regions dropped from the mid-70s down to their current average in the low 60s. Integration eliminates the hand-offs between the front-end and back-end processes. Patient information required for billing, such as address and insurance, is gathered or verified when the patient is admitted. Because the database is integrated, once gathered, that information is immediately available to support patient care and financial processes. By using online insurance eligibility checking in conjunction with the integrated system, LVHN gained $120,000 per year in revenue previously written off due to missing or incorrect insurance eligibility information. Integration also reduces the number of individual components and thereby the potential for the failure of one component, such as a key interface, to interrupt critical processes. Haughom explains, “Our downtime consists of less than four hours a month of scheduled maintenance. I don’t think our system (which runs on the Compaq NonStop Himalaya platform) has ever gone down unexpectedly.” Operations and Efficiency An integrated system increases efficiency throughout the organization, which reduces overall costs and enables staff to be more productive. LVHN was able to reduce the number of FTEs in patient accounting from 72 to 44, and avoided increasing staff even after merging with another facility and integrating operations. For Colon, the additional benefit of integration is the ability to see a patient’s information across all facilities as one continuum of care. The ability to produce one statement for each guarantor across all facilities, rather than for each individual patient visit, saves time, paper and postage—and increases patient satisfaction. LVHN used to send out 1,400 to 1,500 individual statements each week. With guarantor or family billing, that number dropped to about 700 per week. “Patients appreciate the convenience, and complaints about waste and excessive mail dropped off immediately,” says Colon. Faster Reimbursement Missing or incorrect information, lack of clinical documentation or perceived insufficient medical necessity all lead insurance companies to reject a bill. “Organizations need to do all they can, in terms of both processes and automation, to ensure that they reduce their exposure to lost revenue due to denials,” says Laureto. “Tight integration between registration, clinical, and patient accounting processes is essential to implementing a best-practice model.” Integration supports automated charging. By generating charges automatically as a byproduct of ordering or documenting clinical events at the point of care, organizations can virtually eliminate the need for charge entry. For all three organizations, moving toward full online nursing documentation is key to gaining this benefit. PeaceHealth has made significant progress in this area, with one facility doing essentially all charting online, using a chart-by-exception approach at the bedside. “As nurses do more of their charting online, we reduce the risk of having charge tickets accidentally going home stuck to badges or in pockets,” says Haughom. Having the clinical record available, governed by proper security, enables staff to address questions from patients and payers immediately, without pulling paper charts. They can see when the patient received care, what services were provided along with detailed charges. For LVHN, having clinical events drive charges has reduced the error rate to less than 0.05 percent. This has reduced the number of external audits by third-party payers dramatically. “In fact,” says Colon, “some payers don’t bother to audit us anymore at all. They know we can back up every charge with our system.” Standardization and Quality Integrated clinical and financial information lays the foundation for standardization and ongoing process improvement. “Now that Kettering has standardized on the integrated system,” says Nyle Morgan, Kettering CIO, “we are better able to leverage our IT investment. As we move forward with physician order entry and nursing documentation, we will be able to streamline the installation timeline across facilities and offer more functionality to users faster. Clinical users will adopt new functionality more readily when the approach and user interface are consistent throughout the workflow. It’s an IT best practice that cuts costs overall while increasing service to users.” Facilitating standardization has been the driving force behind PeaceHealth’s IT structure, at the heart of which is the integrated system. Having integrated information has increased collaboration across disciplines; nurses, pharmacists, physicians, therapists and administrative personnel work together more. This new level of integration supports quality programs. On the clinical side, PeaceHealth uses their integrated system to support the use of care standards across all of their regions. They successfully implemented a protocol for diabetic patients that has been in use for three years. Use of the protocol has dramatically increased compliance by providers, and they believe it is improving patients’ health. In another couple of years, they will have enough long-term data to quantify the effect on their diabetic patients’ health over time. Long-term, integrated data will give them the ability to continually assess and evolve care protocols. One of several administrative projects underway at PeaceHealth is a focus on reducing the number of duplicate registrations, which can have a clinical impact if a test result or allergy is documented on one record while an order is placed on the other. By identifying breakdowns in the registration process, PeaceHealth expects to reduce duplicates to zero through process improvement, targeted training and automated alerts. Integration not only offers significant, concrete benefits to organizations today, but also a solid foundation for the future. According to Haughom, “As automation throughout the care process, across all care settings, grows more integrated—for example when diagnosis and procedure coding becomes an automatic byproduct of clinical documentation—the workflow will be truly seamless from beginning to end. An integrated system supports that vision and provides the building blocks to make that happen.” © 2002 Nelson Publishing, Inc |
By
Bethany Williams, marketing manager for LastWord administrative and financial applications, IDX Systems Corp., Seattle, WA. Contact her at
Rose Ann Laureto
John L. Haughom, M.D.
Sandra Colon