Beyond bolt-ons: breakthroughs in revenue cycle information systems: next-generation revenue cycle information systems go well beyond niche functionality

Healthcare Financial Management, Feb, 2008 by David Hammer, Debra Franklin

[ILLUSTRATION OMITTED]

"Observe always that everything is the result of change, and get used to thinking that there is nothing that Nature loves so well as to change existing forms and make new ones like them ."--Marcus Aurelius

Advanced revenue cycle IT is currently receiving much attention. Articles and advertising tout the promise and capabilities of integrated bolt-ons, workflow rules engines, electronic medical records (EMRs), advanced executive scorecards, and single-database clinical/revenue cycle systems. These new systems are intended to improve adherence to process standards, substantially cut billing errors, accelerate cash flow, and reduce cost-to-collect, among other benefits. Some publications describe--and even quantify--large savings to be gained through the deployment of next-generation revenue cycle systems.

Many healthcare organizations, however, are concerned about investing in the proper systems. What are the "must have" features? And how will the technology combine with people and processes to transform the healthcare revenue cycle?

The exhibit on page 54 represents today's networked revenue cycle environment, to which revenue cycle IT vendors have begun to respond.

In a study of 251 provider and 359 vendor members of the Healthcare Informatics Research Panel (Trends in Healthcare Financial Systems, Vendome Group, 2007), the Vendome Group learned that the most significant reimbursement challenge among the study respondents is accurate charge data. Providers are adopting a multi-part strategy to address this challenge, including improving the front-desk collection process as well as coding and documentation, and aligning charge capture at the point of care.

The study also revealed that one in four organizations plans to purchase a new revenue cycle system or upgrade its current system, predominantly in search of richer functionality. In addition, denials, real-time eligibility, privacy mandates, pay for performance, consumer-directed health care, and transparency are widely shared concerns.

The study concluded that providers would begin to adopt comprehensive revenue cycle management systems that have the following attributes:

* Front-end financial systems automation

* Real-time eligibility identification

* Back-end automation

[ILLUSTRATION OMITTED]

Abroad consensus seems to be emerging about the characteristics of market-driven next-generation revenue cycle information systems. To help providers surmount today's challenges, these systems should include the following attributes:

* Built-in "bolt-on" capability

* Adaptability and flexibility

* Workflow rules-driven capability

* Powerful analytics

* Consumer-focused features

* Single-database structures

* Lower total cost of ownership

Built-in "Bolt-on" Capability

In the 1980s and 1990s, the market for revenue cycle management software was a "best-of-breed" world, with niche vendors and core health information system (HIS) vendors alike selling their specialized functionality. Although today's environment is evolving toward next-generation, integrated solutions, it is still a best-of-breed world, often with no regard to integration or the implications for the organization's core HIS application. For many organizations, the benefits of niche functionality have, so far, outweighed the benefits of true integration.

The exhibit on page 55 shows how this best-of-breed stage of revenue cycle IT evolution is positioned within the overall trend of healthcare IT evolution. Revenue cycle needs have had to compete with clinical system imperatives for scarce capital dollars. As more organizations choose and implement their clinical systems, the spending pendulum has begun to swing back toward revenue cycle improvement.

In the best-of-breed era, organizations "bolted on" specialty applications and modified their core systems to accommodate them. They spent millions on IT resources and often ended up with systems that required significant resources to manage. Providers found it difficult to stay current with software applications because of the complexity of built-to-fit interfaces and a larger vendor list than many organizations could manage.

[ILLUSTRATION OMITTED]

Lee Evins, chief revenue officer at Atlanta-based WellStar Health System, says true seamless functionality is the goal. "If one has a new system that is all-inclusive of [formerly bolt-on] applications, there is nothing more (theoretically) to integrate. The former bolt-on functionality becomes integral--as opposed to integrated." But Evins cautions that, although the "integration of bolt-on technology has merit, [I] don't know if it will ever be eliminated entirely."

Particularly for chief revenue officers who manage in complex, multilocation health systems using disparate IT and bolt-on systems, the effort can be a significant challenge. Peter Savini, vice president of revenue cycle management at 72-hospital, 19-state Catholic Health Initiatives, says, "[M]y expectation is that I will only have to deal with a few relationships, not as many as I have now. I think it is inevitable--simplicity is what we're after.... I don't want any longer to have to cope with so many vendors and technologies."