The Economics of Automating Your Medical Office

Do the Math-the Results are Compelling

Bankers don’t make routine withdrawals and deposits, they have the ATM. Banks are not open late at night. ATMs are. Bankers don’t manually record inter-bank and intra-bank transfers. They have sophisticated EDI systems that make all the transfers, record all the deposits and withdrawals, and make all the payments.

However, Bankers DO make loans, they set up new accounts, and they do the research and solve problems that cannot be handled by their ATM or EDI systems.

What do Medical Offices and Clinics have? Electronic claims, electronic remit posting, electronic exchange of lab information and other data among internal and external systems, electronic data conversions for billing information, medical record data and captured images of many types.

Electronic claims filing incorporates clearinghouses, electronic scrubbers and computerized editors to check each claim against a myriad of “rules” and quickly get that claim to the insurance company. On the receiving end Electronic Remit Posting systems record payments with fanatic accuracy in a fraction of the time to do the same task manually. Electronic Funds Transfer (EFT) options get the money in the bank 7-10 days earlier than when paper checks are used and never forget to make the deposit.

If you are not sure about the Economics of Automation (getting your version of an ATM), do the MATH. For example, studies show it takes about 5 minutes to post a claim manually and less than 30 seconds to post a claim electronically, including time for verification. Similar statistics are available for data conversions, database interfaces and electronic claims filing. Do your own study. Then do the math. The results will be compelling. Even without accounting for manual errors, the cost savings are obvious.

Every year those measurements will become even more compelling. Why? Claims filing rules are being added and made more complicated. Insurance companies are finding more ways to deny claims and are doing it electronically. The information required to maintain an average patient record is enormous compared to a few years ago and will continue to grow, dramatically increasing the need for an electronic data conversion when a new system is added. Other examples could be cited but the point is clear, automation is an essential component for efficiency and profitability. Do the math.

The Medical Office simply cannot keep up manually. More is being demanded of good employees every day and that trend will continue. Good employees want meaningful jobs not mundane data entry work. Manual errors are more costly today than they were last year and will increase in cost next year. Reducing manual and redundant data entry, in any form, is of paramount importance in the increasingly narrow margins facing the modern Medical Office.

As for the software vendors competing for Medical Office business, they will have to embrace more integrated technology if they want to remain viable in the immediate future. And we are seeing an accelerating trend among some vendors to collaborate on moving vital data between their dissimilar systems. One alternative is to use an outside source to develop and implement data exchange among your particular systems. This can be very effective because it addresses your specific needs. It can also be somewhat expensive. Do the math.

In the late 1980’s fax machines began to be readily available in most large offices and some smaller offices. By the mid 1990’s fax machines were everywhere including many homes. A few years ago data conversions were seldom done in medium to small medical offices. Office Managers were told to start fresh with the new system. Add patient information as they came in for their first visit and run out the Accounts Receivable on the old system. Today it is unacceptable to give up the patient history accumulated over many years and medical offices are just too busy to enter all that data by hand again when it is available electronically.

The need and requirement for Electronic Medical Record (EMR) systems is increasing dramatically. For clinics who have an existing EMR system, an electronic data conversion is essential. It is beyond practicality to attempt to manually load Medical Record information a second time. It is a waste of time and money to rescan and reload thousands of Images.

Many, if not most, medical offices file claims electronically but few post payments electronically. That is rapidly changing and yet some software vendors still have not provided a way to electronically post remits. Getting an outside vendor to do this is usually cost prohibitive.

Another obstacle experienced by clinics is obtaining the electronic remit. Experience shows payers only return electronic remits (ANSII 835) for 60-70% of claims they receive electronically (ANSII 837). Choose carefully the clearing house you use to file claims. Ask the questions and do the math.

With all the computerized systems available now and growing in number almost daily, the wisdom of capturing data once and moving it electronically from system to system is an economic necessity.

If your software company does not offer cost effective and accurate exchange of data in all their varied forms among dissimilar systems, look for a company that does. Embracing data interchange is a "must have" criteria in the software vendor you choose.

Whether you are buying or selling computer software, the Economics of Automating the Medical Office strongly favor adding automated systems where ever practical and obtaining or providing integration among all systems.

By K.W. Norris

Technology Consultants, Inc.

2010