Financial aspects of care

Pay-for-performance (P4P) programs are becoming the payment method of choice for purchasers of healthcare wanting to beat back escalating costs and end a payment system based on volume of patients and complexity of procedures performed.

Designed to align reimbursements with the quality and safety of care provided, even the most basic of P4P programs are geared to reward high performers with enhanced fees or bonus payments based upon the six dimensions of high-quality care as set forth by the Institute of Medicine (IOM)—safety, timeliness, effectiveness, efficiency, equity, and patient-centeredness.1

To date, electronic health records (EHRs) and other business intelligence drawn from clinical information systems have emerged as essential measurement tools in administering P4P programs as they can provide a tracked record of care at the patient level.

The EHR facilitates accurate reports and provides a longitudinal electronic record of patient health information generated by one or more encounters in any care delivery setting. Included in this information are patient demographics, progress notes, problems, medications, vital signs, past medical history, immunizations, laboratory data and radiology reports.

A key element missing from that list is longitudinal financial data at the patient level.

Certainly, a focus on clinical outcomes in measuring quality of care is appropriate. Yet achieving patient-centeredness in the care delivery environment must factor in more effective management of the financial aspects of care. At the end of the day, these two types of datasets are based on the human element of the care experience. Financial aspects of care, in fact, can take on a very large role in patient-centeredness, given that most hospital executives will cite patient billing as their number one customer relations issue.

Financial Business Intelligence at the Patient Level

The traditional revenue cycle model requires a variety of people to access, monitor, update and correct information in a number of disparate systems that often cannot communicate with one another. The inability to track patient movement from one system to the next creates tremendously complex and inefficient workflows that require an extensive amount of time and labor to fully address breakdowns in payment recoveries.

Far too commonplace, failures in the registration process and/or interdepartmental communication breakdowns result in a patient receiving a bill for services that are either covered by their health plan, or reflect an inaccurate amount of self-pay dollars due. Most likely the culprit is insurance information data that wasn’t passed along at some point along the patient’s journey through the delivery system. While eligibility and verification systems may be in place, they lack the capability to enable the organization to track and flag where deficient data was passed from one department to another, thereby enabling the organization to avert patient billing issues. A mix of disparate systems also makes it challenging to produce reports that enable drill down to identify problematic areas of managing the patient’s financial aspects of care.

Solutions like CareMedic’s electronic Financial Record ™ (eFR™), which store information from disparate financial systems in a common data repository, can serve as a critical source for financial business intelligence at the patient level.

The eFR creates an online, long-term record of each patient’s financial activity, storing information from both CareMedic applications and other hospital systems in a common patient folder. Once the patient folder is created, it is continuously updated as staff makes changes or additions in any of the systems that feed the eFR.

Each piece of data from these systems—insurance, eligibility, coverage information, referral information, physicians, department encounters—is associated directly to the patient account, essentially tying “pockets” of information together. This aspect of the system becomes even more beneficial when patients visit integrated delivery networks with multiple locations.

The eFR’s patient-centric nature allows authorized users to access patient account information at any point in the revenue cycle process. The eFR interfaces with multiple systems used for or impacting the patient account, prompting user actions when data is needed, thereby automating interdepartmental workflow processes and maximizing productivity and operational efficiency.

There are many benefits to health care organizations for creating this holistic view of patient financial interaction. If the ultimate objective of P4P is to reduce cost and poor quality and to improve patient-centeredness in care, then developing a strategy to create a consistent, enterprise-wide, accessible patient financial record should be a key element to success.

In short, a focus on clinical systems alone creates significant limitations in satisfying all components of achieving high-performance provider status, especially when considering the growing increase in consumer-directed healthcare, which turns the patient, not the health plan, into the “first dollar payer.”

Rise in Self-Pay Dollars Making Financial Data Critical

Today, self-pay sources, such as health savings accounts (HSAs), comprise around 15 percent of a hospital’s gross revenues, while just slightly less than five percent is written off as bad debt.

With HSA participant numbers expected to grow to 20 million people by 2010, self-pay dollars, as compared to payments from traditional medical coverage, such as HMOs or PPOs, will make the management of financial data at the patient level even more critical if an organization is striving for “patient-centeredness.”

CareMedic’s eFR customers exceed industry best practice standards every day using the system to discover the root cause of lag times and claim errors, and to enable optimized processes to fix problems at the source. Key areas such as admissions, charge capture, coding, payment posting, denial management and insurance follow-up can benefit from the eFR’s automated workflow and information delivery.

The availability of this technology presents an opportunity for better coordination between the financial and clinical aspects of care, which creates a great opportunity to enhance any number of the IOM’s dimensions of high quality of care.

Sheila Schweitzer is the chairperson and chief executive officer of CareMedic. She can be reached at sschweitzer@caremedic.com.

1. Corrigan, JM.; Donaldson, MS.; Kohn, LT.; Maguire, SK.; Pike, KC. Crossing the Quality Chasm. A New Health System for the 21st Century. Washington, DC: Institute of Medicine, National Academy of Sciences, National Academy Press; 2001.