Stop the paper chase! Document management for today's hospitals

Healthcare Financial Management, June, 2004

Every day, hospitals face a tremendous irony: using the latest technology to diagnose and care for patients and then using the most archaic modes--filling out forms manually, sending faxes, copying and filing millions of paper forms each year--to get reimbursed.

The paperwork burden in hospitals is obvious. Unlike just about every other industry, health care still relies on an old-fashioned paper/fax/phone transaction process. That process is expensive: it costs nearly $250 billion to process 30 billion healthcare transactions each year. Plus, the average ratio of staff handling paperwork to doctors can be as high as 1:1. The rules and instructions for Medicare and Medicaid are so unwieldy that they are three times the size of the IRS code. According to one industry study, 86 percent of mistakes made in the healthcare industry are administrative in nature. (a)

So, it's not much of a surprise that hospitals have long been exploring ways to minimize that paperwork through document management systems. The right system can decrease claims denials, decrease accounts receivable, improve patient and employee satisfaction, save storage fees, enhance patient care, and cut the medical records ending backlog. With all of those benefits, why haven't all hospitals implemented a document management system?

Identifying the Challenges

A sound document strategy can reduce the risk of administrative and document-related errors, eliminate points of exposure in healthcare organizations, and improve patient care. However, the challenges organizations face in assessing and auditing internal processes and deciding on the right strategies can be immense.

First, while healthcare providers would agree that the money spent on healthcare paperwork could be better spent on improving quality of care, financing is perceived as a huge barrier. Although hospitals may fund plans for their information technology goals, document management may not seem to fall in that budget or in the budget of any particular area within hospital operations. So any investments in document management are seen as unplanned expenses.

Second, until about five years ago, any healthcare provider considering an answer to paperwork burdens had to rely on individual, niche-oriented solutions from their current information technology providers. Those products weren't usually compatible with existing software, nor did they match the work flow of administrative staff and physicians. They might have even required a huge investment in infrastructure. So they were expensive in the sense that they didn't really accomplish the goal of managing documents.

But several things are happening that are outweighing those challenges and causing more hospitals to adopt a document management system. First is the growing multimedia nature of documents. Important information is flowing into hospitals in the form of e-mails, faxes, and electronic data. The tangibility of paper necessitated one way of thinking about organization, storage, and access. But now hospitals are being forced to rethink and possibly improve the management of documents, given the reality that many documents are electronic. As such, most hospitals are seeing that physical location of documents does not matter as much. So how should documents be identified? Where should they be located? By whom and when should they be accessed? Such questions have inspired a need for more technological solutions.

HIPAA has also become a factor. Document management vendors are creating systems that assist in compliance efforts related to HIPAA's complicated privacy and security rules and regulations--offering more private and secure solutions than a paper-driven environment. Systems can help assist in meeting regulatory reporting compliance for not only HIPAA, but also CMS, Joint Commission, and collection histories. Investing in an enterprisewide document management system can minimize unauthorized access of patient information--one of the greatest privacy and security concerns hospitals face.

What Does Document Management Really Mean?

Very, recently, a growing number of hospitals have been adopting document management systems as a solution. The phrase "document management system" has come to mean a broad array of possibilities. The concept has come a long way since just five years ago when it typically involved only scanning and storing documents--often using common office equipment such as photocopiers that have scanning capabilities. Today, document management systems do a great deal more.

Document management systems offer several ways to capture and store electronic streams of data. Using a document management technology such as Computer Output to Laser Disk (COLD), organizations can automatically store, without scanning, print streams from their billing systems, such as claims, patient statements, close reports, and aging reports. These are stored as documents in the document management systems, alleviating the printing of reams of green-bar reports. Once captured, COLD documents such as claims can be automatically matched to their corresponding documents, such as explanation of benefits (EOBs) and charge tickets.