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1999 and Beyond: IT's Impact on The Business of Healthcare in The New Millennium.

As the healthcare industry moves beyond 1999 and the immediacy of the Y2K problem, what obstacles are in the way? What are the IT strategies that will be employed to move the industry into the future and help it reach its vision and potential?

There are only nine months to go before we find out if we are compatible with that number that has been haunting us for the past few years. Consequently, as we approach the year 2000, we find ourselves in high gear trying to make sure that when the clock strikes midnight, we won't crash and burn.

Are you prepared? Have you stockpiled canned goods, bottled water and batteries and taken all your money out of the stock market, or are you taking a wait-and-see attitude. What about your business? Have you implemented a plan that will keep your business, whether it is a clinic, hospital or IDN, running smoothly right through the stroke of midnight?

"When I clink my champagne glass at midnight, first I'll be looking outside to see if the lights go off, to see if the world is going to come to end," says Liz Propp, FHFMA, CPA, Vice President of the HFMA Washington office. "After that? Though I may be naive, I believe if it's business, we can work it out. It's human lives we need to worry about.

"As long as we don't kill anybody, we'll be OK," she continues. "Hospitals shouldn't be so financially strapped that they can't make it through any problems that may arise. I think it's prudent for CFOs to make sure they have reserves. But we really need to pay attention to patients to make sure pacemakers and the like don't stop working."

Jack Basler, CEO, Henry County Memorial Hospital, New Castle, Indiana, says he thinks everything will be business as usual when we greet the new year, with the exception of a possible cash flow problem the first three months.

Henry County Memorial Hospital is licensed for 107 beds and has a home health agency, three retail pharmacies and will be opening a new facility with physical therapy, sports medicine and a cancer center. They have 40 physicians on active staff and another 60 on courtesy staff and they see approximately 750 patients a day in one place or another.

We know that over the next nine months, the focus will still be Y2K. For those that aren't ready, they will put their contingency plans to work. So, once we know the outcome, what now? What is next on the healthcare IT agenda?

"Over the next year Y2K is still going to be the focus," agrees Stephen L. Ummel, Principal and National Advisor on integrated delivery systems for Ernst & Young's Healthcare Consulting Group. "It has supplanted many other needed IT investment targets that are imperative if healthcare is going to reach its potential."

RoseErin Jones, Assistant Director of patient business services for UCLA Healthcare says that their main agenda this year is Y2K. "We'll be compliant by 2000, but we're still working on issues with outside vendor and payor relationships. Y2K is definitely holding up a lot of other IT maintenance and enhancement projects."

UCLA Healthcare consists of three hospitals: its flagship hospital has 611 beds with 25,000 inpatient admissions and 300,000 outpatient visits a year, a community hospital with 200 beds and a skilled nursing facility, and a neuropsychiatric hospital with 60 beds.

Y2K isn't the only obstacle, according to Ummel. "Historically, healthcare has been tentative and slow to invest in IT. Another propensity of providers over the years has been to buy and partially install IT but fall short of full rigorous implementation because of employee resistance to change," he says. "This kind of behavior might extend well into the millennium and compromise ROI.

"As a former CEO, I'm convinced that CEO's are the ones who must overcome these obstacles by providing the necessary sponsorship and advocacy needed for IT to reach its full potential," he asserts.

As the consolidation trend continues and healthcare is faced with the need to bring together disparate systems and functions and streamline business operations, Ummel is particularly interested in enterprise resource planning or ERP. "We at Ernst & Young predict that integrated delivery systems (IDS) in particular will see the virtue of selecting and acquiring ERP systems to unify and provide a common database for the enterprise."

"One major initiative in our strategic plan is to eliminate duplication in our organization," says Basler. "The redundant entry of data is what is costing us. We're utilizing an enterprise product that gives us the ability to see one set of data to handle centralized billing and reporting. In yesterday's world, there was a lot we didn't know about. In today's world we need to know what is happening right at the moment. Now we can track the information we need when we need it.

"We anticipate quite a bit of savings as we continue to consolidate functions, including much more efficiency and the ability to capture money more quickly," he says. "And, with everything centralized, training will be much easier. Once the staff is trained on the system, they'll be able to work throughout the enterprise.

"We're already seeing benefits. Now when patients register we don't have to create paper documents that they carry with them to each department because wherever they're going, there is a terminal," continues Basler. "Also, for the first time in our history, we can present an understandable bill to a patient. It's much easier for everyone concerned.

"Another goal of ours is to eliminate paper altogether," he says. "We want our patient accounts people across the enterprise to be able to deal with all issues online."

Propp sees a move in healthcare towards a paperless office, but says it will be extremely difficult to eliminate paper completely until everything is stored on CD-ROM.

"The Internet is creating exciting electronic commerce opportunities for providers and consumers alike. It is enabling healthcare customers to access relevant information and is giving them the ability to communicate directly with their healthcare providers," says Ummel. "Electronic commerce has limitless potential in healthcare because it empowers the consumer."

Propp agrees. "We're going to see more and more business processes, like insurance verification and accessing claims status, move to the Internet. As the technology gets increasingly better and we work out the kinks, such as security issues, the Internet will have a great impact on how we do business. The fact that the government wants electronic billing will help this movement."

"The Internet is going to have a tremendous impact on our business as we move forward," says Jones. "We already get bulletins on web sites and can check federal requirements. And in the future we'll be using it for eligibility verification and claims status. It's really changing the face of communication and our ability to access timely information."

Internet access to vendors, payors, physicians, information and so on is also part of Henry County Memorial Hospital's five-year strategic plan, according to Busier. "For example, we're looking at leveraging online status from payors, instead of waiting for the time-out period to expire."

Compliance issues are also having a great impact on IT utilization in health care says Propp. "Technology has the ability to help us eliminate duplicate bills and unintentional mistakes, as well as produce more clean bills the first time around."

UCLA Healthcare, with total revenue of $1.2 billion last year, is working on tracking the percent of claims going clean through the system -- meaning no one has to touch them. "Right now 37 percent are going clean, but our focus is to increase that tremendously," says Jones. "Once we take care of some interface issues, we anticipate it will increase to 75 percent, so we'll only have to touch about 25 percent of claims.

"Once we move from 37 to 75 percent," continues Jones, "we'll be able to redeploy FTEs to do more timely follow up on larger dollar accounts, which will in turn help bring the money in faster."

As Propp says, "Cash is king. No matter what else is going on, the money has to keep rolling in to stay afloat."

Another area Ummel sees in the future of healthcare is the continued development of call centers. He thinks healthcare enterprises can design and implement call centers that have features to improve customer service as well as access to information. "This is another area where we have the ability to transfer the experience of other industries to healthcare to reap incredible benefits."

At UCLA Healthcare, according to Jones, when a call comes in the consumer can choose from several menu options to take care of routine things. "This tool has really helped us in the area of customer service. Our goal is to respond to calls within one minute and we meet that 92 percent of the time now.

"No matter what we're doing, access to information is the key," continues Jones. "IT gives us the ability to slice and dice the information to meet individual needs which in turn helps with decision making and improves the overall business of healthcare."

"Ultimately," says Ummel, "IT is a huge enabler and has the ability to transform the healthcare industry and push it to its full potential."
COPYRIGHT 1999 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999 Gale, Cengage Learning. All rights reserved.

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Author:Straub, Kris
Publication:Health Management Technology
Date:Mar 1, 1999
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