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Coping with the Financial Downturn: Why Investing in IT Now Makes More Sense than Ever

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credit: Tomek Olbinski / Getty Images

By Michael Nissenbaum, CPA.

Once seen as impervious to the global financial crisis, physicians have now begun to feel the brunt of the economic downturn.  Many primary care physicians and specialists report seeing fewer patients today, as compared to one year ago. 

 

Parents defer optional pediatric visits, while other patients postpone or cancel procedures typically used to exhaust remaining deductibles at year’s end.  For example, gastroenterologists who previously had end-of-year waiting lists for colonoscopies report having immediate availability at the close of 2008.  Healthcare consumers are choosing not to move ahead with procedures that could be deemed elective.

 

Physicians also face tough new competitors.  Growing numbers of patients are patronizing clinics within big-box retailers and pharmacies.  More than one in three consumers are receptive to the idea of using retail clinics and one in six already have, according to the 2008 Survey of Health Care Consumers from the Deloitte Center for Health Solutions.  Interest in retail clinics is especially high among Baby Boomers with 38 percent saying they would use such a clinic.  For a modest flat fee of approximately $65, patients can see a physician or nurse practitioner at a retail clinic and avoid an $80 to $125 fee plus co-pay at a physician’s office. 

 

Patients have also changed.  For the first time in recent history, physicians must confront the growing trend of “medical shoplifting.”  Patients are presented with a superbill, or bill of services at the close of a visit, but instead of proceeding to checkout and paying – or making payment arrangements – the patient simply walks out the door.  This, along with the dip in physicians’ personal investment portfolios, has led some physicians to question how (and if) they can continue to practice medicine in this environment.

 

While physicians may have minimal power over economic, demographic and business trends, they can certainly turn inward and focus on factors still under their control.   Physicians, after all, are entrepreneurs who must operate a profitable business and generate a livelihood.  By gazing inward, physicians can assemble strategies to decrease costs and enhance revenue, while still providing the highest quality care. 

 

Calculate Expenditures and Potential Savings

 

How can physicians best cope with the challenges ahead?  To eliminate the looming threat of medical shoplifting, they need strict internal controls, ranging from collection of co-pays at the front desk, to acceptance of credit cards.  They also need to investigate electronic technologies that manage costs, enhance revenues and leverage physician and staff time. 

 

The opportunities to enhance a practice through technology are significant.  A practice could potentially invest 60 percent of a $30,000 salary – some $18,000 annually – in chart retrieval.  With a reasonable investment in technology, however, that same staff member could access every chart with a single keystroke, liberating fellow employees to concentrate on other, more revenue enhancing areas of the practice.

 

Effective systems can boost practice revenues through health alerts.  For example, an electronic health record (EHR)/practice management (PM) system can alert the practice when a diabetic patient needs a foot or eye exam.  The practice can proactively advise the patient and get them scheduled and seen for the services.  The practice generates revenue and optimizes physician schedules with visits and services required, and the patient benefits by receiving the right care at the right time.  Health alerts are especially valuable to physicians who participate in pay-for performance programs and must prove to payers that they provide the highest quality care available.

 

Effective practice systems can also eliminate the problem of defensive down coding so typical in the world of paper charts.  Physicians tend to code on the conservative side resulting in down coding.  Instead of choosing code 99214, they might down code to a 99212 or 99213.  A quality electronic medical record system provides tools for more accurate coding and can increase coding levels as much as six percent. 

 

While many physicians are quick to respond, “My practice isn’t that inefficient,” on the issue of down coding and financial investment in chart retrieval, they should be asking themselves “How inefficient is my practice and how do I know?”  More specific questions physicians should ask: How much staff time and money is invested performing tasks that could be more efficiently and cost-effectively handled through technology?  How much time and money could be saved if processes were optimized for a specific task such as refilling prescriptions electronically?  How could other areas of the practice benefit from refined communication or more accurate coding and better resource utilization?  

           

Practice staff members are typically burdened by providing aggregated charts to a physician who then reviews lab results, for example, and makes entries into paper charts.  Staff members must then return charts to files or perhaps send information to patients.  In contrast, an EHR offers a strong bi-directional lab interface that seamlessly automates lab order entry and subsequent incoming results processing with two to three keystrokes, thus reducing the time commitment from both staff members and physicians.

 

When considering a significant investment in technology, physicians should also evaluate the impact of government payment opportunities.  Effective March 31, 2009, the Centers for Medicare and Medicaid Services (CMS) will provide physicians a two percent override on Medicare reimbursements, as well as two percent lift on Medicare revenues for filing under the Physician Quality Reporting Initiative (PQRI) and two percent electronic prescribing (eRX).  

 

Without a strong EHR and practice management system to help physicians take advantage of reimbursement opportunities, practices are left trying to understand coding requirements and investing extensive staff time with an end result that renders little upside.  With the use of technology, physicians can secure the highest level reimbursement without the unnecessary complexity and extra expense.  With reimbursement for e-prescribing and PQRI scheduled to decline slightly in 2011, now is the time to capitalize on the reimbursement opportunity.

 

Financial crises and downturns are filled with opportunities.  Physicians who, in better times, had a 110 percent patient load may not have had the time to select, purchase and install new systems.  However, physicians who see an 85 percent patient load may now have the time they need for such an implementation.  System implementations that occur in relaxed environments are less likely to disrupt the practice and more likely to achieve success. 

 

Just as world renowned business leader, Warren Buffet, counseled investors “to buy when there’s blood in the streets,” so physicians must maximize the opportunities of a financial downturn and position themselves for future success. 

 

 

Overcoming Implementation Hurdles

 

Physicians sometimes question technology investment because of fear and loathing of the implementation process.  However, physicians can manage their anxiety by locating EHR and practice management vendor partners that not only deliver detailed and customized implementation plans, but also focus on the transition from paper-based to electronic systems. 

 

Practices can enhance their investment in new systems by following these suggestions:

 

                              Allocate time for focused participation in PM/EHR system training during the implementation phase.

                              Set a “go-live” date and operate with realistic expectations.  The first patient you see on that date will establish the first EHR.

                              Move gradually to bring the practice’s patient load onto the EHR system.

                              Stage implementation with functionality use that will deliver best results, such as focusing on optimizing billing with clinical operations, electronic superbills and basic documentation.

                              Commit to and arrange for ongoing education, after the system go-live, to broaden use and skill set of the toolset’s extensive functionality.

 

Credible vendors insist that a practice “owns” an implementation.  However, they should also provide support in the form of a project manager who functions as a facilitator for all implementation activities.  Also posed are questions such as: Are workflows adequately documented?  Is documentation in place?  Does a practice profile exist?  Quality vendors research practice idiosyncrasies and enter an implementation with the most accurate, complete information available.  Rather than forcing a boiler-plate implementation onto a practice, they customize and phase in an implementation with a series of manageable steps.   

 

 

Conclusion

 

As patients and practices tighten their belts as a result of the economic downturn, physicians must turn inward to identify new opportunities for cost reductions and revenue enhancements. 

 

By investing in practice management and EHR systems, physicians can optimize operations practice-wide.  They can capitalize on CMS reimbursements for e-prescribing and PQRI, while avoiding the allocation of potentially 60 percent of a staff member’s salary to chart pulls and time consuming refill requests. 

 

A commitment to an investment in technology is the first step, but no practice management or EHR system will realize its full potential without an effective implementation process.  The best implementations are collaborative ventures between vendors and practices.  Vendors provide realistic analyses, plans, guidance and support, while physicians help staff derive the full benefit of applications by arranging for ongoing training and coaching.  

 

Now is the time for physician practices of every size, location and specialty to examine the short-and long-term gains inherent in technology investment. 

 

Michael Nissenbaum, CPA, is President and Chief Executive Officer of iMedica Corporation.

 

 

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