Hospitals Are A Hotbed For Document Management Spending

Hospitals haven’t historically been recognized as a hot prospect for IT solutions. However, guidelines recently imposed by the Health Insurance Portability and Accountability Act (HIPAA) and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), combined with a federal initiative to create electronic health records (EHRs) for every American by 2012, have led to a spike in technology spending by hospitals.

“Historically, hospitals only spent about 3% to 4% of their revenues on IT,” says Rusty James, VP of channel sales for Visioneer. “This was relatively weak in comparison to other sectors, such as financial services, which regularly spend 6% to 7% of their revenue on IT. However, recent government initiatives are forcing more hospitals to embrace IT solutions to comply with regulations, increase competitive advantage, and improve customer service. Today, hospitals are one of the fastest-growing sectors for technology adoption and are expected to spend about 12% of their revenues on IT solutions through 2007.” A document management system is one of the primary IT purchases hospitals are making to address compliance issues, streamline processes, and increase employee productivity. However, budgetary and IT resource constraints make hospitals very selective in how they implement these systems. Most cannot afford to implement a document management solution as an infrastructure throughout the entire enterprise. Therefore, most hospitals initially install the system in a single department to address a specific pain point and expand the solution incrementally through the enterprise over time. VARs must work to identify a hospital’s most pressing document management issue and develop a system that successfully addresses this problem before moving to other parts of the enterprise.

Storage Reduction, Compliance Can Influence Buying Decisions
For some hospitals, medical record storage and compliance issues may pose the biggest financial threat. Traditionally, medical records are created and maintained in color-coded folders that could contain hundreds of documents each. These records need to be retained up to 15 years after a patient’s death. Some hospitals store these records on-site, while others send some to off-site storage facilities. Either way, the physical space necessary to store paper records can cost a hospital thousands of dollars each month.

“A hospital’s records room does nothing but cost the hospital money,” says Bill Rynkowski Jr., CEO of BlueChip Technologies, Inc. “It doesn’t generate any revenue by performing a service to patients. By implementing a document management system that allows records to be scanned and electronically maintained, a VAR can help a hospital eliminate this storage space and improve its bottom line by adding more patient beds or lab facilities.”

In addition to consuming physical storage space, paper medical records also have limited disaster recovery, security, and privacy provisions — all of which are crucial to complying with HIPAA and other government regulations. Electronic document management systems ensure the privacy, physical protection, and availability of patient information. “By scanning a patient file and saving the image on a hospital’s computer network, the hospital has control of who has access to that network or file,” says Dan Western, healthcare business development manager for Fujitsu Computer Products of America. “This security provides staff and patients with peace of mind, knowing that a patient file is saved securely and not in a storage facility that is susceptible to a fire or vulnerable to viewing by unauthorized personnel.”

Focus On Billing Processes To
Maximize Document Management Sales Success
While the archival and retrieval capabilities inherent in an electronic document management system provide numerous storage and compliance advantages, these benefits will probably be of secondary interest to most hospitals. You must remember that hospitals are businesses, and the primary concern of any business is cash flow. For this reason, most hospitals are currently implementing document management solutions in their business offices or patient registration areas to streamline the billing and claims adjudication process.

Billing is a nightmarish process for a hospital, that involves submitting a claim to one or more insurance companies. Traditionally, insurance claims are rarely processed in a single pass. The insurance company must first properly justify each claim, ensuring that the service is covered, the proper physician referrals were obtained, the claim was sent on time, and so on. Many times, claims are denied by insurance companies because one or more of these justification requirements are missing. When a claim is denied, the hospital must obtain the missing claim requirements and start the billing process all over again. Claim denials keep a substantial portion of a hospital’s cash stuck in accounts receivable status, and it is often forced to write off this amount.

“It often takes a hospital 60 days or more to collect the money it is owed,” says Rynkowski. “If you can help a hospital reduce this cycle by 15 days by streamlining billing procedures with an electronic document management system, then that’s money you helped the hospital collect faster, put in the bank, and earn interest on. That provides a hospital with a huge cost justification for the solution.” An electronic document management system can help streamline the billing process by capturing data at the point of service and alerting users when key information is missing from claim documentation. Using a document scanner with hard-card scanning capabilities, registration personnel can capture images of the patients’ insurance cards, ID cards, and physician referrals right from the admissions desk. These images can also be linked to the patient record in the hospital’s healthcare information system (HIS). The capabilities of the scanner and accompanying imaging software can also automatically capture key data from an image and greatly reduce manual data entry and other administrative tasks, helping to further streamline the billing process.

Customize Your Document Management
Offering To The Hospital Environment
While the hospital market is a hotbed for document management spending, success in this vertical does not come easily. “If a VAR plans to proactively pursue the hospital market, it really needs to have a HIPAA specialist on staff who is familiar with all of the compliance standards,” says Visioneer’s James. “If a VAR does not have such a specialist on staff, it should be prepared to outsource this level of expertise. Otherwise, the VAR will never get past the front door.”

Aligning yourself with the right vendor can give you access to hospital expertise without developing it on your own internally. “Many hardware and software vendors have hired hospital specialists that understand the process and offer classes to their VARs,” says Rynkowski. “Industry organizations such as HIMSS [Health Information and Management Systems Society], MGMA [Medical Group Management Association], and HFMA [Healthcare Financial Management Association] are also good places to begin familiarizing yourself with the vertical. All of these organizations have annual user conferences and are great places to learn the latest buzzwords and trends.”

Finally, it is important that the hardware and software you choose to resell have specific hospital-oriented capabilities, or you are schooled enough to convert a general-purpose document management solution to meet the unique needs of a hospital environment. “For example, deficiency processing is a feature that is essential to most hospital document management solutions,” says Rynkowski. “Deficiency processing recognizes if a medical record is missing a key piece of information, such as a lab report, annotation, or signature, before the file is saved as an unalterable record. This feature alerts the user to the missing information while it can still be collected.”