How one hospital reduced administrative-related costs by 70 percent through work-flow automation.
For years, hospital IT departments have been responding to the need to automate clinical systems, such as electronic health records (EHR) and computer physician order entry (CPOE), throughout their facilities. Without a doubt, the digitization of clinical documents is a boon — both for quality of care and increased efficiency.
But, as many have already discovered, there is much more ground to be gained through automation. EHR, CPOE and related systems streamline and significantly reduce clinical paperwork. However, these solutions nevertheless leave the rest of the healthcare enterprise — everything from human resources, accounting and billing to purchasing — untouched. Simply put, clinical systems do little to reduce the overwhelming burden of administrative work flow and ignore the estimated 30 percent of hospital staff time dedicated to manually processing administrative forms.
Administrative work flow is the new elephant in the room.
Most experts agree that hospitals used to be nearly a decade behind other industries in the implementation of technology. While that gap is closing in the clinical areas, it is, unfortunately, widening in administrative processes automated in other industries nearly 15 years ago.
One Texas hospital exposes the elephant
Doctors Hospital at Renaissance is an acute care facility located in Edinburg, Texas. Over the past six years, the facility has experienced dramatic growth. From modest beginnings as an 83-bed outpatient surgery center, Doctors Hospital has expanded to 506 beds, offering a full range of medical and surgical services. The hospital currently maintains a wound care center, a rehab center, a women's hospital, a cancer center, a behavioral center, a new pediatric medical tower and a newly expanded emergency room with 25 beds, including four fast-track beds.
Because the facility's Renaissance campus comprises many buildings, work flow is difficult to manage and track. In the past, form routing was often bottlenecked, because the facility was reliant on paper-based processes and no formal processes existed to track paper trails.
The need for change
Doctor's Hospital was in the process of evaluating EHR products, but leadership recognized that most of the paperwork burden would not be eliminated through such a system. Numerous paper forms never become part of the medical chart, such as corporate contracts, purchase orders, requests for goods and services, human resources forms, risk management documents, capital purchase requisitions, chargemaster, and form changes and check approvals.
Many hospitals have more than 1,000 forms in use, only a percentage of which are clinical. This reliance on paper comes with a high price tag. According to a study by PriceWaterhouseCoopers, the average cost to process an invoice manually is $1.26, compared to an electronic invoice at 36 cents — a cost differential of 90 cents per invoice. Additionally, as discussed in a study by CAP Ventures, a world-wide document technology strategy and consulting firm, 15 percent to 25 percent of pre-printed material becomes obsolete, meaning hospitals must spend additional time collecting and disposing of aged materials.
In one instance, Doctors Hospital IT staff estimated that pre-printed forms were costing the hospital approximately $700,000 annually, and this figure could be reduced by nearly 70 percent through forms and work-flow automation. Staff determined that they needed an enterprise-wide solution to handle unmanageable manual processes and presented a proposed plan of action to select and implement a new system.
Gaining the support of the hospital's administration and clinical staff was crucial for making the case for a solution. Initially, there was some pushback — like most healthcare organizations, the hospital had been paper based since its inception — and transitioning to an automated work flow required an up-front training allowance in addition to the cost of the system. But it was clear that the manual system had critical flaws, was siphoning time and money, and even contributing to policy failures.
IT staff took the proposal for an automated work-flow system to the hospital's chief financial officer and demonstrated a return on investment that could be realized shortly after product implementation. Timing was good, because administration had just begun the process of evaluating EHR products that would require several million dollars (a conservative investment) to implement. While an administrative work-flow system required an upfront investment, staff was able to demonstrate a near-immediate financial benefit.
Evaluation: any and all
Doctors Hospital began evaluating vendors able to handle the administrative work flow of an organization of its size. The selected product would need to create and manage forms and processes to accommodate several departments across numerous buildings: clinician groups, human resources, accounting and the business office.
A team consisting of IT, administration and clinical staff was created to assess work-flow automation products and lent an ear to any and all vendors offering a work-flow application. Unfortunately, it found many solutions to be clunky add-ons that needed to be coupled with other IT platforms. Many systems were convoluted, and implementation and follow-up support was limited. Doctors Hospital wanted a tool that could stand alone or easily mesh with the planned EHR roll out.
After evaluating numerous vendors, IT staff selected an enterprise work-flow product developed by FormFast of St Louis, Mo., capable of customizing individual work flows and compatible with a future EHR system. Following installation of necessary hardware, Doctor's Hospital staff received both on-site and remote training and support.
The chosen solution also included a form design feature. In addition to creating new, compliant forms within the system, existing forms could be scanned and automatically converted to editable forms with optical character recognition (OCR) technology. The OCR technology recognizes not only text, but also the fields of a form and converts them to fields in the electronic form that can be mapped to data and dynamically filled.
From implementation to automation
Rules were built online that mirrored the hospital's policies, mitigating compliance issues. Built-in protocols ensured that policies were enforced without exception, because the system controls when and where a request is moved. In the case of a staff workaround, administrators can turn to the electronic work flow for an audit of where the infraction occurred.
Vendor and hospital staff worked to create administrative forms within the system, eliminating the need for preprinted and often inconsistent forms. This is a change that also holds promise for clinical forms, because patient safety can be ensured further with consistent information and automatic filling of redundant patient information.
Upon implementation, administrative staff saw bottlenecks dissolve and decision speed increase as human resources documents, risk management documents, requisitions and capital-purchase documents were tracked instantly to electronic desktops. One feature of note is intelligent forms, which sends alerts to process managers after 48 hours of holdup.
According to a study by PriceWaterhouseCoopers, the average cost
to process an invoice manually is $1.26, compared to an electronic
invoice at 36 cents — a cost differential of 90 cents per invoice.
RAC: a way to fight back
In response to financial and regulatory pressures, the hospital's work-flow solution also has recovery audit contractor (RAC) functionality that, should the hospital be audited, will set a work flow in place to notify necessary staff members and track the appeal progression, thus ensuring deadlines will be met.
The RAC program is substantially tougher than any previous Medicare program designed to recover excess reimbursement from Medicare providers. Of the problems identified by RACs between 2006 and 2008, approximately 96 percent (i.e., $992.7 million) were overpayments, while the remaining 4 percent (i.e. $37.8 million) were underpayments (subsequently disbursed to providers). These statistics should offer enough motivation for hospitals to prepare for an audit before it happens — because it likely will.
The RAC solution took slightly longer to implement at Doctors Hospital than other work-flow processes. A potential RAC audit must be appealed within a limited amount of time and review, and a significant volume of information is needed to accommodate an audit request, so the RAC work flow necessitates a multi-faceted setup that can accommodate the speed, detail and volume of information that an audit requires. The revenue management department now has a dashboard view for the complex work flow, color coded for importance and displaying total dollar amounts.
Instead of dedicating significant staff labor to respond to an RAC audit request, which under normal circumstances could require the retrieval and preparation of 200 records per 45 days, staff can trace and gather claims and records through an electronic work flow. This functionality requires a fraction of the time demanded by a manual audit response.
The revenue cycle department is also able to run reports to examine the issues identified in a RAC audit. Through these proactive analytical capabilities, the department has found that contractors made errors in their reporting and auditing of hospital records.
Results of the RAC work-flow solution have been excellent; since the system has been operational, the hospital has not lost a single RAC appeal.
Results of automation
Doctors Hospital has tackled its administrative work flows with resounding success. Through careful on- and off-site coaching from vendor staff, and a commitment from both administrative and clinical personnel, the hospital has been able to realize significant returns. By eliminating numerous paper-based work flows and creating an accountable electronic routing system, the organization has reduced unnecessary administrative staff time and costs associated with printed forms and increased compliance with policies and regulations.
Currently, the hospital has numerous work flows in place, including those for the human resources, revenue cycle management, purchasing and accounting departments. Administration at Doctors Hospital expects to automate several additional processes within the next few months and plans to integrate the work-flow solution with its new EHR system to handle clinical work flows.
Scott Fuller is director, work-flow engineering, FormFast.
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