During the election year of 2004, health care consumers and providers were showered with a series of promises about the coming high-tech future. Both campaigns issued policy papers calling for vast, new national health care technology initiatives that would improve care while reducing costs. Many private foundations and policy think tanks also published studies and "blueprints" featuring plans for spending billions on health care information technology projects.
As we begin 2005, the campaign rhetoric has evaporated, and we are getting back to the realities of daily business. It turns out we are going to see little, if any, new federal spending on health care IT. The huge federal spending bill recently approved by Congress eliminated a modest $50 million request for the office of National Health IT Coordinator Dr. David Brailer.
In addition, it is looking less likely that other federal government agencies, such as CMS, will provide significant funding for new IT initiatives. With huge budget deficits looming, many Capitol Hill analysts are predicting that CMS will cut back, not expand, funding for physician and hospital technology projects. Several experts have predicted that the added costs of the new prescription drug benefit will require major cuts in basic Medicare funding for providers.
Moving Forward with IT
Now that the mirage of large-scale public subsidies to acquire health care IT systems has faded, medical groups must focus on business realities. The money for acquiring new IT systems will likely have to come from the private sector - which for most physicians means it will come from their own practice's cash flow.
The good news is there is a set of proven technologies that provide an immediate return on investment for physicians. Advanced practice-management systems can quickly improve productivity and improve cash flow. For example, automated claims capture and electronic transaction system combined with an online, integrated imaging system can significantly cut paperwork and reduce accounts receivable. These systems allow medical groups to scan and store in digital format documents such as explanation of benefits, payer checks and patient registration forms. Once converted to digital format, the documents can be analyzed with a relational database and used to reduce the cost of customer service, claims appeals and self-pay collections.
By using a business service provider to obtain the technology on a lease or subscription basis, practices can avoid large capital outlays. Medical groups also get the advantage of seeing constantly upgraded technologies through their BSP, as they do not have to worry about buying a system that will be obsolete within six months.
Setting Standards
Although the federal government may not currently be launching any new health care spending projects, it will continue to be the dominant player in setting IT standards, such as the multiyear adoption of HIPAA requirements. Much of the confusion and added expense in HIPAA has come from the fact that health insurers and transaction clearinghouses have imposed their own versions of claim requirements on top of the government's basic data standards. As a result, medical groups must now cope with more than 1,000 separate companion guides or manuals.
Advanced financial management systems, however, can take the formatted data and instantly identify denials by physician, CPT code, payer and reason. This gives practices a chance to quickly correct their operations. By identifying the source and cause of denied claims, practices can determine where the problems are and how to correct them. The insurance industry has long had the advanced software to make these kinds of analytical reports, and now broadband connections can provide medical groups with the same kind of complex explanations.
Advanced management systems also can provide a framework for later adoption of an electronic health record system. Many early versions of EHR systems did not connect to billing systems, and as a result, practices had to keep a separate record of paper claims and workflow inefficiencies were solved. As EHR systems evolve, more of them are able to connect the world of clinical and claims information. The most advanced systems are designed to take advantage of recently adopted data standards for clinical information. Practices that obtain their IT software via a BSP or consultant, rather than purchasing it, may find it easier to take advantage of the new systems without having to handle upgrades and installations themselves.
The campaign rhetoric and policy statements did achieve one goal - it called attention to the potential of new, advanced technologies. Financial management software is not as eye-catching as smart cards or implantable chips, but it offers solid rewards to the thousands of physician practices that are at the heart of our health care system.
About the author:
John Thomas is chief executive officer of MedSynergies, a provider of business and financial services based in Dallas. He can be reached at jthomas@medsynergies.com.
The views expressed in this column are those of the author and do not represent the views of the California HealthCare Foundation or the Advisory Board Company.