Technology strategies to uncover new revenue
September 5, 2014 in Medical Technology
Healthcare industry stakeholders have long imagined the improvements enabled by a digital world. Providers have envisioned the potential of electronic health records (EHRs) to reduce costs and improve patient care and outcomes. Federal lawmakers were so convinced of the possibilities of new technologies that they passed regulation and incentive programs to encourage the meaningful use of EHRs. Yet despite the widespread optimism, EHRs have so far failed to transform the healthcare industry.
A growing number of health systems and physician practices have grown disappointed with the results of their EHR implementations and believe the ongoing support burdens are draining much-needed working capital. In fact, recent research suggests that 65 percent of providers surveyed have experienced financial losses due to EHR implementation, and 73 percent would not purchase their current system again if given the chance. Many organizations are currently in the midst of “rip and replace” implementations in hopes of finally realizing previously unmet health IT promises.
This disillusionment partially arises from the fact that many EHRs were built to enable an electronic flow of data within the four walls of the hospital or clinic, and with little regard for the growing need to connect with community partners. Put differently, EHRs weren’t built to improve care coordination outside of the hospital, nor were they designed to direct revenue back into the health system.
In order for health systems to grow outpatient volume, stop revenue leakage, and maximize profitability, they must find supplemental technology solutions that will directly uncover new revenue streams by connecting health systems with their community of providers.
In recent years, a common strategy among health care CIOs has been a “one-size-fits-all” approach: invest in a single EHR vendor and avoid “bolt-on” products. In theory, this approach was expected to save hospitals money by giving them supreme functionality within a single solution, and by avoiding interoperability challenges and unnecessary IT overhead.
In the same way that best-of-breed departmental systems were eventually supplanted by systems capable of handling needs across a health system enterprise, so too will there soon be a migration of capital to support community-wide network models linking unrelated health systems and other providers to deliver an integrated care model to payers, self-insured employers and consumers. In this model, adoption and utilization of the network itself as a universal tool will be at the core of value creation, not the functionality within each of the discrete hospital or practice nodes.
Consider the taxi and rideshare service Uber. As opposed to a traditional taxi dispatch system, Uber is a network designed to connect driver capacity with passenger demand. An EHR is to the hospital or clinic what the taxi dispatch system is to ABC Taxi, Inc.; it fails to connect a fragmented world of providers and patients and often fails to capture critical revenue.
With revenue from inpatient admission volumes declining, health system executives need a technology strategy to support outpatient growth. The fragmented community of EHRs are insufficient for this need and the industry is fatigued in waiting for true system-to-system interoperability. Health system CFOs thus find themselves facing a new business mandate: find technology solutions – ones that transcend the status quo and live outside of EHRs – that can enable and unlock incremental revenue streams.
Four key strategies support this new mandate:
- Take action now. Every day that passes without augmenting an existing EHR strategy represents lost revenue opportunities. Consider Northeast Georgia Health System, a 557-bed inpatient health system, which recently grew its point-of-service collections from $258,000 to $7.2 million by electronically becoming the best and easiest destination care setting for patients of 700 independent physicians along with 100 employed physicians. Their approach implemented consumer engagement strategies that included the adoption of a cloud-based provider network manager solution. The easy-to-implement and cost-effective technology helped NGHS to engage with independent doctors and drove revenue back to the health system.
- Bring on “bolt-on.” No longer a negative thing, forward-thinking CIOs are proposing smart bolt-on technologies for growing revenue. Contemporary cloud-based tools can add referral management, outpatient order capture, self-service patient scheduling and performance pattern analytics, quickly and at low cost, to extend the value of EHR technology investments and deliver the much-needed tangible ROI they currently lack.
- Pivot resource investments towards future growth. Nearly all health system investments in recent years have been inwardly focused – new facility construction, EHR implementations and hiring of physicians to be part of the health system. The clear disconnect with this approach is evident in that nearly all health system revenue comes from outside the hospital – referrals, orders, transfers and patient visits to the ED all originate in the community. Smart leaders will therefore focus on methods of introducing cloud technologies that drive incremental referrals and orders into their clinical lines of service for which the EHR serves as the system of record for clinical documentation and CPOE.
The era of “big IT” changed healthcare. It promised to capture personal knowledge and automate the exchange of information and processes to improve medicine. Huge systems were installed and data was centralized – but also confined it to a single facility or health system. This got in the way of what was fundamentally human about medicine.
Today we have entered a fundamentally new era of healthcare, one characterized by virtual networks of providers organized around serving patient populations, self-insured employers or becoming high quality/low cost destinations of care. Cloud and mobile technologies are helping IT to get smaller.
CFOs and CIOs can partner to breathe new life into their growth strategy by thinking beyond architectural and functional limits of their EHRs and embracing new ideas and technologies that will introduce market advantages and the financial elixir of much-needed share gains.