Workflow Tools Cut Costs for High Quality Care - Industry Trend or Event

Health Management Technology, May, 1999 by G. Berton Latamore

Systems that help to provide better quality care are cheaper over time than the cost to fix expensive mistakes.

Managed care has been widely criticized by the public and Congress for failing to live up to its promise to deliver better quality healthcare at lower cost. Too often both managed care companies themselves and their critics have seen those two goals--higher quality and lower cost--as opposing, presuming that higher quality care would cost more. But as W. Edwards Deming, in his seminal works on quality control, demonstrated in the 1950s, higher quality costs less because it is always more expensive to fix mistakes than to eliminate them. This is even more true in healthcare, where clinical errors in a patient's treatment can be very costly, than it is in manufacturing.

"However," says Janice Young, healthcare research director at GartnerGroup in Acton, Mass., "managed care plans face unique challenges in delivering on that promise because they can only indirectly influence the quality and cost of care.

"On average, managed care plans spend about 20 per cent of the premiums they collect on administration," she says. "Most people agree that that is too much --probably 10 percent is a good target for administrative costs."

Information Technology (IT) can provide tools to help cut administrative costs to that 10 per cent figure. "One way to decrease administrative costs is to make better use of electronic commerce and Electronic Data Interchange (EDI) tools to move people to a less expensive means of communications," Young says. "There are several avenues to achieve this, including traditional EDI, World Wide Web-based initiatives and electronic mail, and plans really need a combination of these. However, whatever approach you take to eCommerce, it is cheaper and provides better service to both internal staff, providers, and plan members than phone and paper."

Workflow tools designed specifically to automate the electronic paper flow in a managed care operation are available. These can cut administrative costs, and they can potentially have an impact on clinical costs as well. Tools such as Facets from Erisco of New York, N.Y., automate the gathering and distribution of all the information that a managed care company needs. It impacts office efficiency in several ways. First, it insures that the people gathering the data get everything the company needs. For instance, when a new member with a pre-existing condition such as diabetes enrolls, it automatically presents the caseworker with any special forms that need to be filled out.

Once a form is filled, the system automatically distributes it to everyone who needs to see it. One of the major advantages of the electronic document is that it is parallel--everyone involved can see the document at the same time. While paper is serial--it must be passed from one desk to the next. Workflow tools can take advantage of this by sending the document to several people at once so that they can process it at the same time. Workflow also ensures that each document goes to everyone it should. It can automatically escalate a document to the next level in the organization or send it to an alternative worker if it is not processed within a preset time limit.

All of this insures that forms are not lost in someone's in basket or lost at all, since these systems make duplicates of all files automatically so that it becomes almost impossible to delete a document from the system. This can impact the cost of care when a patient is in an expensive hospital bed waiting on the paperwork to be transferred to a less expensive continuing care or outpatient facility.

Another advantage of these systems is that because they capture all information in electronic format, it can be stored in a database that then can support decision support tools. Case management, load management and disease management, which are included in advanced systems such as Facets, are important tools in controlling costs and delivering the best care possible.

"Putting these systems in will create a blip in the organization's IT budget," she says, "but over a couple of years they will more than pay that investment off in savings achieved through greater efficiency." And, they will allow the organization to provide better service by making information available wherever and whenever it is needed, whether that is for answering a member's questions or making critical care decisions.

Says Young, "The problem with focusing on administrative costs is that at best you can create a 10 per cent improvement in costs. That is not the quantum leap that everyone wants."

To attain that quantum leap, managed care companies must focus on improving the quality of care they give to patients, and thereby cutting the cost of that care. Again, IT tools can have an impact on this problem. "Credentialing obviously is important to ensure that the plan has the best care givers," says Young.

Even with the best staff, however, results are likely to vary widely. In healthcare, the best potential for the kind of quantum leaps in cost control and service efficiency that managed care needs, says Young, is offered by software that defines and recommends clinically best practices both to the case workers and the doctors at the point of care. "Software tools for providing best practices at the point of care based on the best clinical information are becoming more accepted in medicine," she says.