When I remodeled my house a few years ago, I hired a contractor, and negotiated a bundled payment for the entire job. The fees I paid to the contractor covered project management costs as well as the costs of independent subcontractors assembled do the work, such as carpentry, dry-wall, electrical and painting. The contractor stood to make a nice profit if they efficiently managed the work of their subcontractors. On the other hand, he could lose his shirt if there were unmanaged rework and cost overruns.
Bundled payments are still relatively rare in healthcare. If a patient has knee replacement surgery, each provider – the surgeon, anesthesiologist, hospital, rehab facility and home health agency are paid separately. The patient is often left to serve as their own general contractor, without any one provider responsible for the cost and quality of episode. As a result, there can be significant variations in episode cost and clinical outcomes for the same procedure.
CMS has been experimenting with voluntary bundled payment demonstration projects for about five years. In 2011, CMS launched the Acute Care Episode (ACE) program with a handful of healthcare systems. In 2013, CMS began the Bundled Payment Care Initiative (BPCI) with over a hundred participating hospitals. The bundled payment programs included different conditions, procedures and episode durations. However, they all worked in a similar way: CMS combined a bundle of health care services that had been previously paid as separate components. A bundled payment price was set, representing the average historical episode cost, less a withheld amount (typically around 3 percent). A general contractor (AKA “convener”) was assigned responsibility for the total cost and quality of the episode of care. After five years of voluntary experimentation, the concept of bundled payments is about to go big.
In April 2016, CMS will require 800 hospitals that are located in one of 67 geographic regions to be conveners for Comprehensive Care for Joint Replacement (CJR) surgeries – mostly elective hip and knee replacements. The bundle payment will include the costs of the hospital stay along with all related costs within 90 days of the hospital discharge. Each of the providers involved in the surgery and post-discharge care will continue to bill Medicare as before, but the hospital will now be financially responsible for all of the costs. If the bundled costs are below the target price, the hospital will receive a bonus that they may share (or not) with the other providers participating in the care episode. However, if costs are above the target, the hospital is responsible for paying the difference to CMS.
Guest post by Jeff Lin, senior vice president of product management, InstaMed.
Jeff Lin
The amount a patient must now pay before a health plan covers any portion of the balance has increased 67 percent in five years, according to the Kaiser Family Foundation. This surge in patient responsibility is driven primarily by enrollment in high-deductible health plans which require patients to pay towards a certain minimum balance before the plan benefits begin. According to HealthPocket, deductibles are expected to increase 8 percent to $6,480 for a family plan, further increasing patient balances.
Despite this growing trend, many patients leave their visit without any expectation that they will receive a bill or a discussion about how to make a payment. Therefore, it should come as no surprise that providers can expect to collect only 50 percent to 70 percent of a patient balance after a visit (McKinsey and Company). As patients’ out-of-pocket expenses continue to grow, healthcare providers of all sizes will need to focus on improving the payment experience to ensure patient collections and the future of their organization.
Make Healthcare Payments Simple Providers can look to best practices from other industries to guarantee their revenue while making it simple for patients to pay their responsibility. Just like reserving a hotel room, providers can require that all patients present a payment method before the time of service to ensure the responsibility is automatically paid with low staff intervention. Patients are familiar with this process from their experiences in other industries and often prefer automated, simple payments. Providers can leverage innovative payment technology to securely automate payment collection with saved payment methods.
Add Healthcare Payments to Household Bills Nearly 70 percent of patients surveyed said they pay their non-healthcare bills such as cable or utility bills online or through a bank bill portal, according to the 2014 Trends in Healthcare Payments Annual Report. This demonstrates that patients prefer to make payments through convenient payment channels. However, these payment channels are simply not always available in the healthcare industry. To enhance the payment experience, providers can easily allow patients to pay online or through a website where they are already accustomed to visiting and paying bills. For instance, many health plans offer member portals,which enable patients to manage claims and view benefit amounts. By enabling patients to make online payments to all of their providers through these member portals, providers will receive a payment as soon as the claim is adjudicated – all without ever sending a statement or making a phone call.
Ease the Burden of Deductibles High deductibles can result in large balances for a single patient visit which can make it difficult for a patient to pay their total balance at one time. Automated, customized payment plans can help patients pay down these large balances over time without relying on paper statements, staff follow-up calls and manual payment posting.
As a best practice, these plans should enable providers to automatically collect payments in a secure and compliant way with automated notifications and receipts to the patients.
Guest post by Jeff Goldsmith, vice president of marketing, Revolve Robotics.
Jeff Goldsmith
We will never return to the days of house calls and family doctors who knew you from birth. However, thanks to advances in mobile and digital technology we are well on our way to a new golden age in medicine, one that will offer near instant access to electronically delivered healthcare from humans, anywhere, any time. The groundwork has already been set – there have been more than one billion tablets produced by the tech industry (one for every seven humans), so we certainly have enough screens to get a caregiver’s face in front of every patient.
So, what’s the next step? An understanding and commitment to using this technology to give everyone access to care, whether they are an aging boomer, someone living in a rural area without enough specialists, or a very sick kid who can’t travel because of their treatment regime.
This isn’t science fiction – robotic technology and tablets are already being combined in schools, in homes and in hospitals to better patient experiences. For example, a public elementary school in Round Rock, Texas recently accommodated a student receiving chemo in Philadelphia by using a telepresence robot to put her back “in” the classroom. The technology allowed her to look around the room, interact with fellow students and ask questions as if she were there in person – all for under $1,000.
The ROI of this type of set-up for schools is impossible to calculate nationwide, but the benefits are massive. Not only does the child benefit, so do their classmates who learn about inclusion, the school which evolves its technology, and the community because it gains one more educated human being. More than 40,000 children undergo treatment for cancer each year in the US – imagine giving each of them this opportunity.
Guest post by Chris Strammiello, vice president global alliances and strategic marketing, Nuance Communications.
Chris Strammiello
Every healthcare IT professional is already thinking about mobility and security in general, but not all consider their relation to document management. A single piece of paper could contain immeasurable amounts of sensitive data and even protected health information (PHI) that, if somehow found in the wrong hands, could present major HIPAA violations. So, how will document imaging impact healthcare technology?
The Mobile Game-Changer
As healthcare organizations transition their processes from paper to electronic workflows, mobile device use will increase. From patient registration to discharge and beyond, mobile technology simplifies patient communication via e-prescriptions, online scheduling and automated appointment reminders.
Productivity-enhancing capabilities like barcode scanners, e-forms and e-signatures also benefit practitioners by improving on-the-ground access to clinical documents and reducing manual document handling. Plus, mobile devices can curb printing costs through the implementation of pull printing, which holds a print job on a server until the user authenticates its release at the output. Ultimately, for the patient, all of these advantages translate into more time for quality interactions with their doctor; for the hospital, significantly streamlined processes and lower costs.
We also expect to see an increased use for mobile devices in medical instrumentation. Take, for example, the advancements brought to speech therapy with the utilization of a tablet’s microphone during a session. Previously, patient testing would have been done with a much larger and more complex device that would produce less data about the quality, pitch and frequency of the voice. Not only are mobile devices simplifying day-to-day workflow within the healthcare industry, but they will also revolutionize the actual healthcare practice.
Smarter, Simpler and Even Spoken Security
Alas, as with all technological advancements, security remains an essential question mark. Unfortunately, the smartphones, tablets, laptops and even multifunction printers (MFPs) that increase access to patient information are also some of the biggest security vulnerabilities in EHR implementations. In fact, theft or loss of portable and unencrypted devices is the leading source of reported HIPAA data breaches and fines. Even further, as the U.S. Department of Health and Human Services now defines office copiers and printers to be actual workstations, IT professionals must secure them in the same way they do computers.
With all this in mind, both physical and technical safeguards must and will be improved in the near future, starting with the embrace of solutions that provide two-factor authentication. Commonly used in financial services, two-factor authentication combines a password with something you know, like the answer to “What is your mother’s maiden name?,” or something you have, like a fingerprint. We can expect such biometrics, including voice commands, being more commonly used as a second authentication factor in the near future. Long gone are the days of scanning your ID card to credential a print release – users will simply speak to the printer to verify who they are.
The healthcare industry remains at a crossroads as providers and healthcare IT professionals confront a rapidly changing business and regulatory landscape. With factors like rising patient cost obligations, growing payer complexity, and the inevitable shift to a value-based payment environment weighing on them, medical practices nationwide are in search of new IT solutions to support them. The rapid pace of cloud adoption across all sectors is a prominent example. The market for cloud solutions is one of the fastest growing areas within healthcare, but it’s not solely a private sector phenomenon; the federal government’s cloud-first strategy finally gained traction in 2015, prompting a FCW analyst to predict accelerating momentum for federal cloud initiatives over the next three to five years.
One of the strongest factors driving cloud momentum among medical practices today remains security concerns: with growing IT complexity increasing security risks, cloud options remain an attractive plug-and-play alternative to on-site servers that allows healthcare providers to minimize vulnerabilities. But modern cloud solutions also allow providers to maximize practice management capabilities and offer faster time to value. And, with features like pay-as-you-go pricing, cloud solutions don’t require a big upfront investment, making them a popular choice with budget-conscious healthcare organizations.
Another key factor driving practice adoption of modern, cloud-based solutions is the need more efficient workflows to support effective patient billing. The patient share of healthcare costs is growing rapidly in the US. According to a Kaiser Family Foundation report, out-of-pocket costs have grown three times as fast as overall healthcare costs. And, the average deductible has skyrocketed from $584 in 2006 to $1,318 in 2015. Practices need solutions that can help them implement controls and analytics as patients become responsible for a greater share of costs.
As a result of these and other factors, cloud technology now plays a pivotal role in healthcare, and cloud-based healthcare IT solutions are becoming increasingly important in helping practice successfully navigate this new environment. So what’s in store for 2016? Here are some healthcare IT trends to watch:
A more modern, intuitive software experience: The consumerization of healthcare IT has begun in earnest, and that means practices are looking for design-centered products that deliver intuitive solutions. Cloud-based healthcare IT solutions that move beyond Web 1.0 to provide a consumer-focused user experience (UX) will be the clear winners.
Even with electronic decision-support technology and responsive, knowledge-based medical software built into modern electronic health care record (EHR) systems, it is critical for physicians and clinicians to recognize the primary focus is still treating the patient. In an effort to survive escalating costs of care and declining reimbursements, modern health care delivery models shifted from a patient-centric care model toward a financially motivated business model.
With the push toward value-based reimbursements and rigorous quality measurement reporting mandates, hospitals and medical organizations today must balance the need to remain financially solvent with improving patient outcomes and experiences throughout the health care journey.
Business Process Outsourcing: Revenue Cycle Management (RCM) and Value-Based Care
End-to-end RCM in the healthcare industry explores cost per transaction beyond salaries and benefit packages. Administrators examine productivity volumes, idle time, workforce utilization ratios and patient flow as key factors that directly influence revenue potential.
Business process outsourcing (BPO) has gained popularity in recent years as a way for hospitals and practices to control operating costs without compromising patient care or satisfaction levels. It is a win-win proposition for all stakeholders. The RCM software and services market, which includes BPO, now garners more than $12 million, annually. There are many reasons to consider BPO, including streamlining internal efficiency, expediting third-party payer reimbursements, and reducing data entry errors that stifle cash flow and frustrate consumers.
Analytics, Document Management and BPO
Improving document management is critical. Leading technology enables collecting vast amounts of data, data that can be used to improve patient outcomes, and financial performance. However, data is only valuable if it can be rapidly accessed, analyzed, organized and converted into actionable information. Digital Documents, which is a company that provides outsourced document management services, says document processing services essentially convert information to digital assets.
Those assets may translate into higher profit margins. One study showed hospitals that outsourced most of their RCM operations in 2014 saw an average revenue increase of 5 percent to slightly more than 6 percent. Revenue increases are expected to continue to grow over the next few years, especially in the health IT outsourcing area, which according to Reportstack should see an annual compounded growth rate of almost 9 percent through 2019.
With the yearly bluster and promise of HIMSS, I still find there have been few strides in solving interoperability. Many speakers will extol the next big thing in healthcare system connectivity and large EHR vendors will swear their size fits all and with the wave of video demo, interoperability is declared cured. Long live proprietary solutions, down with system integration and collaboration. Healthcare IT, reborn into the latest vendor initiative, costing billions of dollars and who knows how many thousands of lives.
Physicians’ satisfaction with electronic health record (EHR) systems has declined by nearly 30 percentage points over the last five years, according to a 2015 survey of 940 physicians conducted by the American Medical Association (AMA) and American EHR Partners. The survey found 34 percent of respondents said they were satisfied or very satisfied with their EHR systems, compared with 61 percent of respondents in a similar survey conducted five years ago.
Specifically, the survey found:
42 percent of respondents described their EHR system’s ability to improve efficiency as difficult or very difficult;
43 percent of respondents said they were still addressing productivity challenges related to their EHR system;
54 percent of respondents said their EHR system increased total operating costs; and
72 percent of respondents described their EHR system’s ability to decrease workload as difficult or very difficult.
Whether in the presidential election campaign or at HIMSS, outside of the convention center hype, our abilities are confined by real world facts. Widespread implementation of EHRs have been driven by physician and hospital incentives from the HITECH Act with the laudable goals of improving quality, reducing costs, and engaging patients in their healthcare decisions. All of these goals are dependent on readily available access to patient information.
Whether the access is required by a health professional or a computers’ algorithm generating alerts concerning data, potential adverse events, medication interactions or routine health screenings, healthcare systems have been designed to connect various health data stores. The design and connection of various databases can become the limiting factor for patient safety, efficiency and user experiences in EHR systems.
Healthcare Evolving
Healthcare, and the increasing amount of data being collected to manage the individual, as well as patient populations, is a complex and evolving specialty of medicine. The health information systems used to manage the flow of patient data adds additional complexity with no one system or implementation being the single best solution for any given physician or hospital. Even within the same EHR, implementation decisions impact how healthcare professional workflow and care delivery are restructured to meet the constraints and demands of these data systems.
Physicians and nurses have long uncovered the limitations and barriers EHRs have brought to the trenches of clinical care. Cumbersome interfaces, limited choices for data entry and implementation decisions have increased clinical workloads and added numerous additional warnings which can lead to alert fatigue. Concerns have also been raised for patient safety when critical patient information cannot be located in a timely fashion.
Solving these challenges and developing expansive solutions to improve healthcare delivery, quality and efficiency depends on accessing and connecting data that resides in numerous, often disconnected health data systems located within a single office or spanning across geographically distributed care locations including patients’ homes. With changes in reimbursement from a pay for procedure to a pay for performance model, an understanding of technical solutions and their implementation impacts quality, finances, engagement and patient satisfaction.
Guest post by Khomushka Andrey, project coordinator, Sciencesoft.
Health professionals will hardly ever love documenting. By making tedious tasks easier and eliminating paperwork, medical apps spare time for doctors to focus on their patients more. However, physicians would rather use paper charts and sticky notes than try to figure out what goes wrong with the software.
The reason why mHealth for medical practices, clinics, hospitals and other care organizations might stay unused is that developers tend to build monolithic mobile copies of medical desktop solutions, trying to adapt the complex functionality to smaller screens. Off-the-shelf software vendors generally stick to this large-screen approach, as their goal is to cover the needs of as many customers as possible.
According to Healthcare IT News and the AMA (American Medical Association), however, physicians welcome a more customized approach. “Physicians have found that most EHRs lack usability and interoperability as necessary features for supporting high-quality patient care,” says James L. Madara, MD, CEO of the AMA.
So thinks the AAPS (Association of American Physicians and Surgeons), which represents the end users of such apps. Executive director Jane M. Orient, MD, states that “The costly, clunky systems the government demands are worsening the problems and even driving some software experts back to paper.” And just to emphasize it, according to Healthcare IT News, 80 percent out of 571 physicians surveyed feel that EHRs impede patient care and almost half claim that patient safety is at risk.
