Fiscal Waste Reductions in the Healthcare Industry, Research Paper Example

What are the future trends in health care finance technology in physician ordering and integrated medical records?         

In the recent, 2010 RAND Corporation study on fiscal waste reductions in the healthcare industry published in the New England Journal of Medicine, the think tank announced that clinical care institutions might save up to $3.6 trillion with retention of total healthcare expenditures at their current rate of about 17 percent of the nation’s gross domestic product in the United States by addressing a series of operational inefficiencies (Pizzi, 2010). The study looks at five (5) key factors impacting negligent spending and excessive costs to hospitals and referral settings toward recommendation: 1) Engaging consumers  – with education on the value and risk of specific treatment options could dramatically reduce money spent for unnecessary treatments; 2) Coordinate and Share Information – between healthcare providers’ as the lack of access to patient medical records leads to the duplication of tests and inappropriate treatments that are estimated to cost up to $50 billion annually; 3) Manage Disease and Maintain Wellness – ensures that patients are actively engaged, along with their clinicians, in managing their health through attention to personal behavior, disease prevention, early detection and appropriate care for chronic diseases; 4) Design for Patient Safety and Quality as preventable medical errors account for $50 billion to $100 billion in annual healthcare spending; and 5) Reduce Opportunities for Fraud: In 2007, when the nation spent roughly $2.3 trillion on healthcare, fraud was estimated to account for as much as 5 percent to 10 percent of that spending (Pizzi, 2010). According to Pizzi (2010), “Computerized systems that track data anomalies to identify fraud and breaches in payment integrity have been proven to stem these costs in several state Medicaid programs.” The foregoing essay looks at the emergence of IT operations systems management of finance and other aspects of healthcare institutions.

Technological systems designed to enhance the networking of financial operations in hospital institutions are especially responsive to the growing complications in the insurance industry as it transforms opportunities for bundled payment of services, and also competitive pressures to supersede fiscal priorities in service to patients amidst conglomerate interests in the healthcare industry (Monegain, 2010). Regional healthcare markets are a somewhat untold story amongst consumers, yet the viability of access to high quality provision of service by patient populations regardless of the state of finance, enforces the demand for top performance and safety by consumers whom are primarily interested in adequate and reasonably affordable care, as well as efficiency, service, and the institutional environment. Hospital institutions are business organizations, so that there is a high degree of importance placed on the optimization of financial control and management of allocations toward overall sustainable growth.

With systems transformations come change management challenges, and lean and agile options in IT systems are much discussed amongst financial operations planning commissions as they look to high tech solutions toward investment and implementation. Oversight of operations extends beyond the scope of insured and uninsured care however, and financial administrators in healthcare settings are increasingly pressed to stem overflow of inventory stock by audit of inventories as close to ‘zero-inventory’ goals as is logically possible for a healthcare institution. Logistics systems are now might be integrated into network of information sharing so that controller activities are interfaced with budgetary management of units within the institution related to purchasing.  Integrated operations enable the advancement of fiscal control, as well as determine precision in the decoupling point between allocations to actual delivery of patient services. Efficiency in the facilitation of care is directly linked to the ‘duty of the standard of care’ within hospitals, so that information channels work toward that core goal with everything from scheduling of nursing staff to appropriate levels of medical supplies. In large institutions, finance directed under the various chief officers within the organization must of course be accountable to central fiscal controller oversight with reporting, and well planned unit or division budgets according to the institutions strategic plan.

The emergent emphasis in organizational theory on practice settings is keenly vested in the advancement of replicable models dedicated to change operations as institutions search for approaches that succeed at meeting core competencies through risk reduction and resource maximization technologies for the betterment of the ‘total’ organization. The new IT systems offer interconnectivity between operational units within healthcare institutions, and link human intelligence to logistics intelligence for in-depth insight into the history of expenditures and allocation requests. Some institutions have joined supply chain cooperatives in their region to further enhance the use of network logistics saving literally hundreds of millions of dollars annually (Healthcare Finance News, 2010).

How should financial managers budget for unforeseen changes and improvements in information technology that require large capital outlays?

The patient first priority of healthcare institutions underscores that all other concerns and including revenue are meant to be secondary to consideration of what is best for the client once admitted or under physician care. The most important aspect of the internal environment of hospitals is not chain management of inventory, nor the regulation of employee operations, but the integrated knowledge base dedicated to patient record, and including insurance coverage. Some insurance carriers have extended their protocol in partnership with hospitals to improve claims performance metrics and to streamline business processes which ultimately accelerate revenue cycles for all partners involved (Healthcare Finance News, 2010). For instance, MedeAnalytics’ Claims Transparency solution which powers insurance providers in the Partnership in Operational Excellence and Transparency (POET) program offer easy systemization of patient claims, reducing denials and appeals and leading to administrative cost reductions and gains in audit efficiency.

Integrated knowledge share networks that provide financial analysts, doctors and managers working in various capacities in regard to patient record are faced with an enormous repository of data. This also means that knowledge production hospitals is for both internal use, and linked to its competency community(s) for the aforementioned reasons, and contributes to the sheer magnitude and density of information that might be used by the institution and its partners in other areas such as industry or state reporting. Methodological instruments, and modes of assessment, affect particularities in the cross pollination of data, and especially in dissemination of patient records for determination of qualitative and quantitative outcomes according to type of evaluative control. Obvious challenges to the ‘knowledge sharing’ trend in the healthcare industry pertain to non-disclosure agreements with patients whom have requested censorship of dat. As a result unapparent inaccuracies may be present, as inherent challenges to non-disclosure clauses prompt the unavailability of information of skewed representations, that can then for example be ‘counted’ and published ad hoc by any member of the network, toward ends that might not be fully representative of the details to patient record despite of omission to the network. While still under query within the industry, actuarial studies of transparency of patient record largely point to advocacy rather than malpractice as patients want a comprehensive record of services and full access with the belief that such a model will lead to patient cost savings (Pizzi, 2010).

Employee performance can also be mapped through integrated systems with real time information about on the job completion of tasks. Compensation strategies figure into this picture, and support for those nodes within the network allow employees to access specific data correlated to salaries, benefits and cafeteria insurance plans. Knowledge management systems promote institutional sharing networks between primary institutions and medical staff.  External portals integrated into intra-institutional networks within healthcare organizations also include competency recruitment of human resource talent and knowledge exchange for facilitate their respective community of practice within the network are met here.

As with other forms of management systems solutions to global change management healthcare finance IT network systems integration requires standard planning framework covered in traditional and change management strategic, tactical and operational plans. Within those considerations are time horizon, scope, complexity, impact, interdependence, and financial, duration and resource management strategies. Competent IT response to ‘global’ challenges in the healthcare industry also search for specific systems architecture and engineering production methodologies apt at resolving risky issues in urgent care prior to evolution of those targeted problems. Fiscal costs attributed to mandated assessment and mitigation of common problems within the clinical care environment can often present institutions with complex and expensive processes. Requirement for accountability within the responsibilities of the various management stakeholders (i.e. Business Development, Counsel, and Medical Staff) all contribute to oversight and input into such a system of knowledge and planning. Everyone wants a ‘cheaper’ financial IT network system of operations, but from a budgetary planning perspective without depth of integration in designs, and sufficient training of employees on quality control of inputs, things such as time dense contribution to management sharing networks, the delivery of intelligence is uneven. Ultimately, financial management strategies derived from these cost cutting, and innovative systems options link healthcare institutions to a new level of market competitiveness with the highest caliber intelligence toward global solutions that only promise to enhance a new generation in oversight of patient care.

References

Baker J.J. & Baker, R.W. (2009). Health care finance: Basic tools for nonfinancial managers (3rd ed.). Sudbury, MA: Jones & Bartlett Publishers.

Blue Shield of California extends contract for MedeAnalytics’ claims transparency solution (2010). Healthcare Finance News, February 12, 2010. Retrieved from: http://www.healthcarefinancenews.com

Illinois Purchasing Collaborative achieves more than $10 million in supply chain savings in four years (2010). Healthcare Finance News, 1 July 2010. Retrieved from: http://www.healthcarefinancenews.com

Pizzi, R. (2010). Actuarial survey says transparency would reduce healthcare costs. Healthcare Finance News, 29 July 2010. Retrieved from: http://www.healthcarefinancenews.com

(2010). Study outlines $3.6T in potential healthcare waste reductions. Healthcare Finance News, 14 June 2010. Retrieved from: http://www.healthcarefinancenews.com

Monegain, B. (2010). N.C. health system to launch bundled payment pilot. Healthcare Finance News, 22 June 2010. Retrieved from: http://www.healthcarefinancenews.com