Free Hospital EMR and EHR Newsletter Want to receive the latest news on EMR, Meaningful Use, ARRA and Healthcare IT sent straight to your email? Join thousands of healthcare pros who subscribe to Hospital EMR and EHR for FREE!

Small Financial Innovations that Make A Big Difference for Patients and Hospitals

Posted on May 3, 2018 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

More and more these days I’m fascinated by the practical innovations that can impact healthcare much more than the moonshot ideas which are great ideas but never actually impact healthcare. I’ve quickly come to believe that the way to transform healthcare his through hundreds of little innovations that will allow us to reach a transformative future.

I saw an example of this when I talked with PatientMatters. They work in a section of healthcare that many don’t consider sexy: revenue cycle management. However, I often say, the financial side of healthcare isn’t sexy, unless you care about money. Given how healthcare is getting pressed from every angle, every hospital I know is interested in the financial side of the equation.

PatientMatters is doing a number of things that are interesting when it comes to a patient’s financial experience in a hospital. They offer a great mix of tools, training, process design, automation and coaching to reframe a patient’s financial experience. This is a trend I’m seeing in more and more healthcare IT companies. It takes much more than technology to really change the experience.

That said, I was most intrigued by how PatientMatters offers unique payment plans to patients based on a wide variety of factors including current credit information, payment history for current financial obligations, and their residual income. From this information PatientMatters does an assessment of a patient’s ability to pay based on these five categories:

  1. Guarantors that generate this designation are the most likely to pay their full obligation. This population predictably pays their full balance more than 94% of the time. Recognizing these guarantors provides key savings to the hospital:
    • Because these guarantors are most likely to meet their obligation, conversations with the registration staff regarding payment are brief and concise.
    • Recognizing the high likelihood of guarantor payment performance, many hospitals elect to keep these accounts in-house and not refer to their early out vendors. This generates vendor savings for the hospital.
  1. These guarantors also have a high collections success rate, but they may need more time and slightly reduced payment plans to meet their obligation. Using data analytics to understand the guarantor allows the hospital to structure a custom payment plan with a high likelihood of performance.
  1. Guarantors in this category require a higher degree of attention from the registration team. This group struggles to meet their financial responsibilities. A hospital that spends the extra time working with the guarantor on a highly structured payment plan will see collection improvements with this population.
  1. These guarantors fall into two categories; a) a low likelihood of meeting their financial commitment or b) guarantor may meet hospital charity program, based on their FPL status. Scripting will help the registration assess the guarantor and identify the best solution.
  1. These guarantors will likely be unable to meet their hospital obligation. Many times these individuals will qualify for the hospital charity, Medicaid, County Indigent or other assistance programs.

It’s not hard to see how this more personalized approach to a patient’s financial experience makes a big difference when it comes to collections, patient satisfaction, etc. However, what I loved most about this approach was how simple it was to understand and process. It’s worth remembering that a hospital’s registration staff are generally one of the lowest paid, highest turnover positions in any hospital. So, simplicity is key.

I love seeing practical, innovative solutions like the one PatientMatters offers hospitals. They make a big difference on a hospital’s bottom line. However, they also create a much better experience for the patients who mostly want to get through the billing process and on to their care. How are you customizing the financial experience for your patients?

Hospitals Puts Off Patient Billing For Several Months During EMR Rollout

Posted on January 6, 2018 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Here’s something you don’t see every day. A New Hampshire hospital apparently delayed mailing out roughly 10,000 patient bills going back as far as 11 months ago while it rolled out its new EMR.

According to a report in the Foster’s Daily Democrat,  members of Frisbie Memorial Hospital’s medical staff recently went public with concerns about the hospital’s financial state. Then a flood of delayed patient bills followed, some requesting thousands of dollars, the paper reported.

Hospital officials, for their part, said the delay was planned. Hospital president John Marzinzik said Frisbie needed time to implement its new Meditech EMR and didn’t want to send out incorrect bills during the rollout.

In fact, Marzinzik told Foster’s, under the previous system, records generated during doctor visits weren’t compatible with forms for hospital billing.

Rather than relying further on this patchwork of incompatible systems, Marzinzik and his staff decided to wait until the process was “absolutely clean” for patients. The hospital decided to have a staff member validate every balance shown on a statement before sending them out, he says.

Previously, in December of last year, anonymous Frisbie medical staff members sent Foster’s a letter to share concerns about the hospital and its administrators. The criticisms included skepticism about the over-budget implementation of the $13.5 million Meditech system, which they named as one of the reasons they lack confidence in the hospital administration. The staff members said that this cost overrun, as well as other problems, have undermined the hospital’s financial position.

As is always the case in such situations, hospital leaders took the stage to deny these allegations. Frisbie Senior VP Joe Shields told the paper that the hospital is in sound financial condition, and also said that the only reason why the Meditech project went over budget by $1.5 million was that the administrators delayed the implementation by seven weeks to give the staff holiday time off.

Hmmm. I don’t know about you, but to me, some parts of this story look a little bit bogus. For example:

* I appreciate accurate hospital bills as much as anybody, but the staff was going to check them manually anyway, why did it take 10 or 11 months for them to do so?

* The holidays take place at the same time every year.  Did administrators actually forget they were coming to an event that necessitated an almost 10% cost overrun?

Of course, only a small number of people know the answers to these questions, and I’m certainly not one of them. But the whole picture is a little bit odd.

Health Systems, Hospitals Getting Serious About Telemedicine

Posted on December 8, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

In the spring of last year, I wrote up a story about hospitals and health systems and their growing interest in telemedicine. The story included data from a survey on hospitals and telemedicine, which found that health systems averaged 5.51 telemedicine service lines at the time, up almost 20% from 2015.

Given these stats, I was not surprised to see a new press release from Teladoc reporting that the company now supports more than 200 hospitals, a number which represents a 100% growth in such relationships during this year.

If you’re wondering why this has happened, you’ll get more or less the same answer from last year’s study and Teladoc’s news release. In short, it’s all about the outcomes, baby.

When I wrote the story last year, one of the things that stood out for me was that 96% of respondents had said they were planning to roll up telemedicine services because they felt it would improve patient outcomes. While that made sense to me at the time, it seemed more like an aspiration rather than a practical plan.

What made the survey data even more provocative is that “improving financial returns” turned out to be a very low priority for hospitals working on telemedicine programs. At the time, this focus on outcomes rather than direct financial returns surprised me.

Now, about 18 months later, I’m doing the facepalm thing and saying “of course, hospitals want affordable, flexible care delivery options — they’re a great tool for managing population health!” It’s a no-brainer, actually, but I guess my brain wasn’t working at the time.

Now, as far as I know, the assumption that telemedicine can help with PHM and value-based delivery generally has not been rigorously tested. Also, even if the assumption is correct, hospitals are likely to struggle with deploying telemedicine for a while until they develop the most efficient workflows for using it.

Also, while it’s all well and good to say that focusing on outcomes will create ROI as a secondary effect, for some hospitals it will be pretty rough to carry telemedicine infrastructure and staffing costs upfront for a while. After all, if they want to make an impact with telemedicine, they have to make a serious commitment; I’m guessing that most of us would agree that a scattershot approach would get most hospitals nowhere.

Ultimately, though, I think hospitals have it right. Telemedicine is likely to offer health systems and hospitals some amazing options for extending service lines, managing populations more effectively, and yes, improving outcomes.

KLAS Summit: Digital Health Investment

Posted on December 4, 2017 I Written By

Healthcare as a Human Right. Physician Suicide Loss Survivor. Janae writes about Artificial Intelligence, Virtual Reality, Data Analytics, Engagement and Investing in Healthcare. twitter: @coherencemed

Healthcare Investing and Innovation: Asking the right questions.

KLAS research hosted a digital health investment symposium in Park City, Utah. One of my main takeaways was the importance of asking the right questions to healthcare stakeholders. This includes asking investors what they are interested in.

This one-day work collaboration focused on round table discussions about the interests of investors and providers in digital health. Aligning investor interests with provider needs is one of the biggest needs of healthcare. We want good capital to get to good companies. While at the round table, one of the best comments I heard was that some of the design isn’t centered around the end user. If physicians are responsible for using a product it needs to align to their interests.

Unfortunately, too many people don’t ask the right questions. A technology company might not understand their value proposition in healthcare. I’ve seen companies criticize a lack of technology adoption in healthcare. These are companies that didn’t have a clear picture of what they offered. They also didn’t have a tested healthcare product Or they didn’t ask the specific potential user what they need.

Many of the successful investors at the summit had significant operating experience in the digital health world or operations world. They contributed–if you are a technology looking for a problem, you will struggle in healthcare. You aren’t meeting a need in the market. Some shiny tech solutions are created without real consideration for end users or need. There is no market need for what some people create. Ask yourself if you are user focused. Are you building something that physicians will add to their workflow?  Did you consult physicians? What about patients?

One of the interesting parts of this summit was how many participants asked not to be quoted or mentioned as part of the effort. Many of the most important healthcare collaborative efforts happen in private meetings or surrounding larger healthcare events. The quality of conversation behind closed doors helps move healthcare progress forward.  What role does journalism play in driving this healthcare conversation? This was my personal question from the event.

Discussing barriers to adoption and success needs a private platform. KLAS research has been convening these conversations in alignment with their research and mission of providing transparency about quality and I was impressed with the amount of interest in workflow and informatics. The stereotype of an investor with no experience in healthcare is not representative of the investors present at the KLAS event. There were years of operator,  innovator, and code experience in digital health. A successful investor in digital health comes with the ability to contribute to design and network developed through years of successful companies.

Can we deliver the correct answers and create an environment of improved workflow and creating products that improve healthcare?

Here are the top 10 questions I took away from the KLAS Investor Summit

  1. What type of problems do you like to solve?
  2. How long have you been trying to solve the problems you are trying to solve?
  3. How has the nature of the problem you are trying to solve evolved?
  4. What are better questions to ask at this type of summit?
  5. What do you like to invest in?
  6. What companies do you currently invest in?
  7. How do you see creating change at the national level?
  8. What are the digital health initiatives that are important to people?
  9. What are the problems that aren’t being articulated in public discourse that digital health can speak to?
  10. What are you most excited about in digital health?

Remember the importance of asking what people need when approaching investors.

RCM Tips And Tricks: To Collect More From Patients, Educate And Engage Them

Posted on November 1, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Hospitals face particularly difficult challenges when trying to collect on patient bills. When you mix complex pricing structures, varied contracts with health insurers and dizzying administrative issues, it’s hard to let patients know what they’re going to owe, much less collect it.

Luckily, RCM leaders can make major progress with patient collections if they adopt some established (but often neglected) strategies. In short, to collect more from patients you need to educate them about healthcare financial issues, develop a trusted relationship with them and make it easy for them to pay that bill.

As a thought exercise, let’s assume that most patients want to pay their bills, but may need encouragement. While nobody can collect money from consumers that refuse to pay, you can help the willing ones prepare for the bills they’ll get. You can teach them to understand their coverage. In some cases, you can collect balances ahead of time. Toss in some smart patient engagement strategies and you could be golden.

What will that look like in practice? Check out this list of steps hospitals can take to improve RCM results directly, courtesy of a survey of hospital execs by Becker’s Hospital Review:

  • Sixty-five percent suggested that telling patients the amount due before they come to an appointment would be helpful.
  • Fifty-two percent believe that having more data on patients’ likelihood to pay could improve patient collections results
  • Forty-seven percent said that speaking to clients in different ways depending on the state of the finances would help improve patient collections.
  • Forty-two percent said that offering customers payment plans would be valuable.

Of course, you won’t be doing this in a vacuum, and some of the trends affecting patient financial responsibility are beyond your control. For example, unless something changes dramatically, many patients will continue to struggle with high-deductible health coverage. Nobody – except the health insurers – likes this state of affairs, but it’s a fact of life.

Also, it’s worth noting that boosting patient engagement can be complicated and labor-intensive. To connect with patients effectively, hospitals will need to fight a war on many fronts. That means not only speaking to patients in ways they understand, but also offering well-thought-out hospital-branded mobile apps, an effective online presence and more. You’ll want to do whatever it takes to foster patient loyalty and trust. Though this may sound intimidating, you’ll like the results you get.

However, there are a few strategies that hospitals can implement relatively quickly. In fact, the Becker’s survey results suggest that hospitals already know what they need to do — but haven’t gotten around to it.

For example, 87% of hospital respondents said they had a problem with collecting co-pays before appointments, 85% said knowing how much patients can pay was important, and 76% of respondents said that simplifying bills was a problem for them. While it may be harder than it looks to execute on these strategies, it certainly isn’t impossible.

When Hospitals Leak Money

Posted on October 20, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

A couple of weeks ago I was skimming healthcare business headlines and stumbled across this guaranteed showstopper: You’re probably leaving $22 million on the table. That headline is from a column by Jim Lazarus, who works in the Advisory Board’s Revenue Cycle Solutions division. In his column, he named four ways in which hospitals could recapture some of this lost revenue.

In the article, Lazarus notes that hospitals aren’t following best practices in four key areas, namely denial write-offs, bad debt, cost to collect and contract yield.  Unsurprisingly, Advisory Board benchmarks also demonstrate that median performing organizations are having trouble reducing net days in accounts receivable. The Advisory Board has also found that the overall average cost to collect has worsened by 70 points of net patient revenue from 2011 to 2015.

To turn the stats around, he suggests, hospitals should focus on four critical issues in revenue cycle management. They include:

  • Preventing denials rather than responding to them. “Hospitals are losing, on average, five percentage points of their margin to underpayments, denials and suboptimal contract negotiations,” Lazarus writes.
  • Collecting more from patients by improving their financial experience. According to Lazarus, between 2008 and 2015 the portion of patient obligations being written off as bad debt has climbed from 0.9% to 4.4%. To boost patient collections, hospitals must offer price estimates, convenient payment methods and a positive care encounter, he says.
  • Being sure not to take a hit on MACRA compliance. See that doctors, including those coming on board as employed physicians, get up to speed on documentation performance standards as quickly as possible.
  • Building the value of merged RCM departments. If multiple RCM organizations are being integrated as part of consolidation, look at ways to improve the value they deliver collectively. One approach is to create a shared services organization providing a common business intelligence platform across entities and service lines systemwide.

If you’re an IT leader reading this, it’s probably pretty clear that you have a substantial role in meeting these goals.

For example, if your hospital wants to lower its rate of claims denials, having the right applications in place to assist is critical. Do your coding and billing managers have the visibility they need into these processes? Does senior management?

Also, if the hospital wants to improve patient payment experiences, it takes far more than offering a credit card processing interface to make things work. You’ll want to create a payment system which includes multiple consumer touch points and financing options, which is integrated with other data to offer sophisticated analyses of patient payment patterns.

Of course, the ideas shared by Lazarus are just the beginning. While all organizations leave some money on the table, they have their own quirks as to why this happens. The important thing is to identify them. Regardless, whether you are in RCM, operations or IT, it never hurts to assume you’re losing money and work backward from there.

Hospital Execs Underestimate QPP Impact

Posted on July 7, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

A new survey by Nuance Communications suggests that hospital finance leaders aren’t prepared to meet the demands of MACRA’s Merit-Based Incentive Payment System (MIPS), and may not understand the extent to which MIPS could impact their bottom line. Worse, survey results suggest that many of those who were convinced they knew what was involved in meeting program demands were dead wrong.

The survey found that many hospital finance leaders weren’t aware that if they don’t participate in the MIPS Quality Payment Program (QPP), they could see a 4% reduction in Medicare reimbursements by 2019.

Not only that, those who were aware of the program didn’t have a great grasp of the details. More than 75% respondents that claimed to be somewhat or very confident about their understanding of QPP got the 4% at-risk number wrong. Meanwhile, 60% of respondents either underestimated the percent of revenue at risk or simply did not know what the number was.

In addition, a significant number of respondents weren’t aware of key QPP reporting requirements. For example, just 35% of finance respondents that felt confident they understood QPP requirements actually knew that they had to submit 90 day of quality data to participate. Meanwhile, 50% either underestimated or did not know how many days of data they needed to provide.

On a broader level, as Nuance noted, the issue is that hospitals aren’t ready to meet QPP demands even if they do know what’s at stake. Too many aren’t prepared to capture complete clinical documentation, develop business processes to support this data capture and raise provider awareness of these issues. In other words, not only are finance leaders unaware of some key QPP requirements, they may not have the infrastructure to meet them.

This is a big deal. Not only will their organizations lose money if they don’t meet QPP requirements, but they’ll miss out on a 5% positive Medicare payment adjustment if they play by the rules.

Lest the respondents sound careless, let’s do a reality check here. Without a doubt, the transition into the world of MIPS isn’t a simple one. Hospitals and medical practices will have to meet deadlines and present quality data in new ways. That would be a hassle in any event, but it’s particularly difficult given how many other quality data reporting requirements they must meet.

That being said, I’d argue that even if they’ve gotten a slow start, hospitals have enough time to meet the basic requirements of QPP compliance. For example, turning over 90 days of quality data by March of next year shouldn’t be a gigantic stretch in contrast to, say, submitting a year’s worth of data under advanced Meaningful Use models. Not to mention the Pick Your Pace option of only 1 measure which avoids all penalties.

Clearly, having the right health IT tools will be important to this process. (Not surprisingly, Nuance is picking its own reporting tools as part of the mix.) But I’m struck by the notion that organizations can’t live on technology alone in this case. As with many problems in healthcare, tech solutions aren’t worth much if the business doesn’t have the right processes in place. Let’s see if finance executives know at least that much.

Avoiding Financial Losses After EMR Implementation

Posted on April 3, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

While hospitals buy EMRs to improve their operations – both clinically and financially – too often they take a hit before they work out the kinks in their installation.  In fact, healthcare institutions often end up losing up to 5 percent of their gross revenue after EMRs are implemented, according to consultant Erick McKesson.

One typical story comes from Maine Medical Center, which found that patient charges weren’t appearing after its $150 million Epic installation in 2012. These billing errors were one of the reasons the medical center posted a $13.4 million loss in the first six months after the installation, hospital executives reported.

But according to McKesson, managing consultant with Navigant, it’s possible to overcome these problems. In an article for Becker’s Hospital Review, he tells the story of a group of health systems which worked together to avoid such losses. The group worked together to identify the most valuable software features that flagged mischarges or reporting errors. They then identified the five charge program “edits” which had the largest financial impact.

Areas the cooperating health systems considered the most important included:

* Administrative codes

The health systems noted that incorrect administrative codes lead to lagging revenue. That’s particularly the case when there are different codes for the same procedure. Hospitals need to be sure that clinicians use the higher code if appropriate, which can be helped by the right technological fixes.

* Anesthesia

It’s important to monitor your charges when there are two distinct aspects of a single procedure that are charged separately, particularly with anesthesia services. If your audit system flags the absence of the added codes, it can recapture a substantial level of missing revenue.

* CT

Seeing to it that radiology charges are automatically reviewed can ensure that appropriate levels of revenue are generated. For example, in the case of CT exams, it’s important to see that charges are assessed for both the exam and if needed, the use of a contrast agent.

* Emergency Department

It’s not unusual for ED physicians to undercode high-acuity patients. But it’s important to address this issue, as undercoding can result in significant financial consequences.  Not only that, in addition to generating financial losses, undercoding can create problems with performance-based reimbursement contracts. If patients are depicted as less acute than they actually are, payors may expect better outcomes than the patients are likely to have. And that can lead to lower revenue or even significant financial penalties.

* Infusions

Auditing infusion charges can be very helpful in capturing added revenues, given that they are one of the most frequent charges in healthcare. Infusion codes are very complex, including the need to track start and stop times, difficult rules regarding what charges are appropriate during infusions and issues related to “carve out periods.” Auditing systems can help clinicians comply with requirements, including simple-to-create functions which automatically flag missing stop times.

As readers will doubtless know, getting competing health systems to engage in “coopetition” can be tough, even if it helps them improve their operations. But given the need to combat post-EMR lags in revenue, maybe more of them will risk it in the future.

Health IT Preserves Idaho Hospital’s Independence

Posted on February 1, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

Most of the time, when I write about hospital IT adoption, I end up explaining why a well-capitalized organization is going into the red to implement its EMR. But I recently found a story in RevCycle Intelligence in which a struggling hospital actually seems to have benefitted financially from investing in IT infrastructure. According to the story, a 14-bed critical access hospital in Idaho recently managed to stave off a forced merger or even closure by rolling out an updated EMR and current revenue cycle management technology.

Only a few years ago, Arco, Idaho-based Lost Rivers Medical Center was facing serious financial hurdles, and its technology was very outdated. In particular, it was using an EMR from 1993, which was proving so inflexible that the claims stayed in accounts receivable for an average of 108 days. “We didn’t have wifi,” CEO Brad Huerta told the site. “We didn’t have fiber. We literally had copper wires for our phone system…we had an EMR in a technical sense, but nobody was using it. It was a proverbial paperweight.”

Not only was the cost of paying for upgrades daunting, the hospital’s location was as well. Arco is a “frontier” location, making it hard to recruit IT staffers to implement and maintain infrastructure, staff and servers, the story notes. Though “fiercely independent,” as Huerta put it, it was getting hard for Lost Rivers to succeed without merging with a larger organization.

That being said, Huerta and his team decided to stick it out. They feared diluting their impact, or losing the ability to offer services like trauma care and tele-pharmacy, if they were to merge with a bigger organization.

Instead of conceding defeat, Huerta decided to focus on improving the hospital’s revenue cycle performance, which would call for installing an up-to-date EMR and more advanced medical billing tools. After the hospital finished putting in fiber in its area, Lost Rivers invested in athenahealth’s cloud-based EMR and medical billing tools.

Once the hospital put its new systems in place, it was able to turn things around on the revenue cycle front. Total cash flow climbed rapidly, and days in accounts receivable fell from 108 to 52 days.

According to Huerta, part of the reason the hospital was able to make such significant improvements was that the new systems improved workflow. In the past, he told RevCycle Intelligence, providers and staff often failed to code services correctly or bill patients appropriately, which led to financial losses.

Now, doctors chart on laptops, tablets or even phones while at the patients’ bedside. Not only did this improve coding accuracy, it cut down on the amount of time doctors spend in administrative work, giving them time to generate revenue by seeing additional patients.

What’s more, the new system has given Lost Rivers access to some of the advantages of merging with other facilities without having to actually do so. According to the story, the system now connects the critical access hospital with larger health systems, as the athenahealth system captures rule changes made by the other organization and effectively shares the improvements with Lost Rivers. This means the coding proposed by the system gradually gets more accurate, without forcing Lost Rivers to spend big bucks on coding training, Huertas said.

While the story doesn’t say so specifically, I’m sure that Lost Rivers is spending a lot on its spiffy new EMR and billing tech, which must have been painful at least at first. But it’s always good to see the gamble pay off.

Do Health IT Certificate Of Need Requirements Make Sense?

Posted on January 23, 2017 I Written By

Anne Zieger is veteran healthcare branding and communications expert with more than 25 years of industry experience. and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also worked extensively healthcare and health IT organizations, including several Fortune 500 companies. She can be reached at @ziegerhealth or www.ziegerhealthcare.com.

The other day, I read an interesting piece about the University of Vermont Medical Center’s plans to create an integrated EMR connecting its four network hospitals. The article noted that unlike its peers in some other states, UVMC was required to file a Certificate of Need (CON) application with the state before it proceeds with the work.  And that struck me as deserving some analysis.

According to a story appearing in Healthcare Informatics,  UVMC plans to invest an initial $112.4 million in the project, which includes an upgrade to informatics, billing and scheduling systems used by UVMC and network facilities Central Vermont Medical Center, Champlain Valley Physicians Hospital and Elizabethtown Community Hospital. The total costs of implementing and operating the integrated system should hit $151.6 million over the first six years. (For all of you vendor-watchers, UVMC is an Epic shop.)

In its CON application, UVMC noted that some of the systems maintained by network hospitals are 20 years old and in dire need of replacement. It also asserted that if the four hospitals made upgrades independently rather than in concert, it would cost $200 million and still leave the facilities without a connection to each other.

Given the broad outline provided in the article, these numbers seem reasonable, perhaps even modest given what execs are trying to accomplish. And that would be all most hospital executives would need to win the approval of their board and steam ahead with the project, particularly if they were gunning for value-based contracts.

But clearly, this doesn’t necessarily mean that such investments aren’t risky, or don’t stand a chance of triggering a financial meltdown. For example, there’s countless examples of health systems which have faced major financial problems (like this and this),  operational problems (particularly in this case) or have been forced to make difficult tradeoffs (such as this). And their health IT decisions can have a major impact on the rest of the marketplace, which sometimes bears the indirect costs of any mistakes they make.

Given these concerns, I think there’s an argument to be made for requiring hospitals to get CONs for major health IT investments. If there’s any case to be made for CON programs make any sense, I can’t see why it doesn’t apply here. After all, the idea behind them is to look at the big picture rather than incremental successes of one organization. If investment in, say, MRIs can increase costs needlessly, the big bucks dropped on health IT systems certainly could.

Part of the reason I sympathize with these requirements is I believe that healthcare IS fundamentally different than any other industry, and that as a public good, should face oversight that other industries do not. Simply put, healthcare costs are everybody’s costs, and that’s unique.

What’s more, I’m all too familiar with the bubble in which hospital execs and board members often live. Because they are compelled to generate the maximum profit (or excess) they can, there’s little room for analyzing how such investments impact their communities over the long term. Yes, the trend toward ACOs and population health may mitigate this effect to some degree, but probably not enough.

Of course, there’s lots of arguments against CONs, and ultimately against government intervention in the marketplace generally. If nothing else, it’s obvious that CON board members aren’t necessarily impartial arbiters of truth. (I once knew a consultant who pushed CONs through for a healthcare chain, who said that whichever competitor presented the last – not the best — statistics to the room almost always won.)

Regardless, I’d be interested in studying the results of health IT CON requirements in five or ten years and see if they had any measurable impact on healthcare competition and costs.  We’d learn a lot about health IT market dynamics, don’t you think?