Computerization A through Z, but starting with S - software.

Do it right, and a successful computerization increases operating and billing efficiencies. It raises productivity, cuts costs, and increases profit. Do it wrong, and you will squander time and money to achieve mixed results at best or, worse, potentially hamstring your ability to do what you are already doing.

When it comes to computerizing nearly everyone starts with the hardware - and that's the first mistake. Software is where it's at in computers. That's why an upstart company like Microsoft has made its founders billionaires, while IBM, a name once synonymous with growth and success, has struggled to find and keep its place in the world of micro computers.

As a growing number of nursing home operators have learned, with software, there is this thing called a learning curve - only it seems more like a learning cliff. In the beginning it takes longer to do everything on a computer than it did by hand. You stare at the screen trying to figure out which key to push or menu to "pull down," and every once in a while information you put into the computer disappears. That never happened with your notebooks, ledgersheets, and manila folders - unless somebody forgot to fill out a form or misfiled it.

If computerization is started by picking the software, that picking begins with the determination of what documentation, what reports, you are going to want to get out of your computer. In order to do that, you need to identify the entities around which your information centers.

In this era of broadening nursing home responsibilities and markets, the key is identifying who your patients are. Are they primarily frail elderly? Do you have an Alzheimer's unit? Do you perform rehabilitation therapy?

What kinds? What areas of subacute care is your facility offering? For those companies who are also in, or looking to be in, the assisted living or home health care business, the questions about patients/residents/customers run even further afield.

Then there is the employee. There is another set of data that you will need to build around them, covering everything from pay rates to continuing education and specialized training programs. You will also need data about your suppliers. To start with, what have you bought from whom at what price?

What about payers? A great deal of data revolves around them, and it can be different for each one. What do they require for payment? What will they pay for? How much time do you have to invoice? What supporting documentation is needed? What coding and definitions are required by which payer?

Then there are the various taxing and regulatory agencies. You have to supply them with detailed information and summary reports, per their request.

Finally there is the management of the physical plant. That means everything from supplies to furnaces. What do you have? Where is it? What is its maintenance schedule? When will its useful life end?

Software is available to collect data, perform functions and issue reports for every one of these areas. Sometimes it can be off-the-shelf, general-use software, such as word processors and spreadsheets, costing a few hundred dollars or less. However, in most of the really crucial areas for nursing homes, the need is for highly specialized applications software. This software exists too, but the cost is measured in thousands not hundreds of dollars.

The reason for this greater cost is simple. When a software company makes a program that it can license to tens of thousands, hundreds of thousands, even millions of users, it can offer to do so for a few hundred dollars or less. If every nursing home in the country licensed a copy of a nursing-home-specific software application, the maker would have saturated its market with only 16,000 or so copies. Obviously the price must be substantially higher in order to defray research, development, and marketing costs.

When it comes to picking industry-specific software, you need to make sure that all the different modules work well together. Information collected by the diet management program and the patient admissions program and all the other points of clinical data collection should fit instantly and smoothly into the same relational database that handles billing, payroll, and all the other financial management modules. Once data has been entered, you do not want to have to adjust and fit it by hand. The best way to make everything work well together is to buy fully integrated software from a single maker. The most cost-effective way to do that is to be able to purchase it module by module as you need an application. An integrated package lets you ask and get the answers to your questions quickly. It also makes it easier for you to check on the quality and quantity of data being entered throughout your facility

Now for hardware: The software you pick will in effect determine your major choices regarding hardware - i.e., the operating platform. That probably means you will be purchasing IBM-compatible computers based on the Intel microprocessor and running under a Microsoft operating system on a Novell or Novell-compatible network. There is no way around it. In nearly all industries this setup has become the defacto standard. No matter how much you love the Macintosh you have at home, that is probably the best place to leave it (even though it does have an operating system that is easier to use).

Now let' s talk cost. Let's say you have a 100-bed nursing home and want to install a network like the one described above, with about ten fixed-entry stations and maybe some portability in the form of a laptop computer or bar code reader or two, and you want fully integrated nursing-home-management software. You will probably spend $20,000 to 30,000 dollars on computers, printers, and network wiring. Software could run another $20,000. These are your initial outlays, but this $40,000 to $50,000 is only the beginning. You must budget for ongoing expenses.

Those include equipment maintenance, repair, and replacement; software support and upgrade; and training and problem solving. Of these the biggest by far is training and problem solving, and you absolutely must be prepared for it. You can have the best software in the world, and if your people do not know how to use it quickly and easily its acquisition will have been money wasted.

To begin with, your staff will need to be taught by experts from the software company. Make sure that's part of the deal. However that's not the end. Find someone already on your staff or hire an individual to be your "computer person" to train new staff, retrain old, and act as problem-solver. This person will also be your main contact with the software and hardware suppliers, so it is best to have him or her in place at the start of your computerization process. Do not skimp here. A dollar spent on the front end of this process can save ten or a hundred at the back end. Expect this computer person to cost $30,000 to $40,000 a year.

A typical annual fee within the industry for software support is from 15 to 20% of the initial licensing fee. In an ideal world you should budget annually 30 to 40% of the cost of your hardware for repair, maintenance, and eventual replacement. Computers stay up with software for about three years, and then new generations of micro processors make the old obsolete.

Does that mean you will have to replace all your computers every three years? No. Much of your equipment will work just fine as network terminals for a longer period of time. But you will want to replace those machines that manipulate the data and function as file servers. In addition, if you have made the commitment and your system is working for you, you will find you want to add more work stations.

This investment, like any good investment, has financial returns. A well-functioning computer system should allow you to run your business office with fewer people. It should allow nurses and nurses' aides to spend more time with patients and less on paper work (and that just might translate to fewer people). Better and more data that can be used to generate more detailed and accurate billing documentation should yield faster and fuller reimbursement. Do it right, and computerization will more than pay for itself.

Finally, a couple more thoughts on doing it right. Unless the person at the top commits to computerization, it will not work optimally. If you are the nursing home administrator, be the first, not the last, to have a computer on your desk. No matter how tough learning to use the computer is in the beginning, the instant access you will have to data will make your job easier in the end. You will not have that access if you rely on someone else to print out a report and give it to you.

True, it may seem awkward at first to use a keyboard, mouse, and computer screen - but force yourself to use them and you will soon be relying on them. If you find it hard to use the standard screen which shows half a page or less, spend the money to get a larger screen that can show a full page.

In the last analysis, the computer and its software are tools for acquiring, transporting, and analyzing information. Everything you do in a nursing home can be improved by having more information, sharing it with more people, and using it to determine what has happened and how it was done. Successful computerization of a nursing home results in better patient treatment and lower costs. And that's what makes it worthwhile.

Associate Editor David Patterson has worked as a consultant helping a number of companies through the agonizing process of computerization.