by William D. Kirsh DO, MPH – Chief Medical Officer.
In the coming years, an important regulatory change will drastically alter hospital profits and reduce cash flow: ICD 10 coding requirements.
Hospitals, physicians, health systems and any other risk-bearing entities need to be aware of the challenges caused by the impending change. In order to deal with new requirements effectively, these organizations must have a powerful Business Intelligence (BI) software application able to aggregate and analyze a high volume of divergent data. This data will be vital to efforts to turn disparate information feeds into opportunities for effective analysis and action that maintains and improves fiscal results.
The new ICD 10 coding regulations are going push many software applications into obsolescence, and a hospital’s inability to accurately track diagnoses related to purchases and dispensations billed to third party payers will greatly affect cash flow.
Many healthcare organizations are currently focusing their energies and resources on Electronic Medical Records (EMRs), but EMRs by themselves will not provide the only platform to allow the evolution of manipulating data to improve the financial viability of the hospital.
For years, healthcare organizations have relied upon guesswork to control costs, increase revenues, and improve care quality. As providers face changes in reimbursement practices and variations in contracts like Accountable Care Organizations (ACOs), they must begin basing decisions on timely, factual data encompassing an entire care network.
But this kind of holistic data analysis and decision-making is not possible with the fragmented information technology infrastructures many healthcare organizations are currently using. Most institutions are not capable of managing third party contract requirements – like global contracting and payments that are linked to performance – and integrated delivery systems are definitely not prepared to weather the critical financial effects of migrating from ICD 9 to ICD 10 diagnosis standards. This migration directly effects reimbursement and cash flow, and providers will need software applications that focus on small variations of services and their costs in order to achieve desired financial outcomes.
The complex nature of medical management demands solutions that understand third party payer contracts and provide utilization controls to maximize profit. Institutions must be able to understand variations in care by informing their physician network and improve overall efficiency through continuous background analytics and alert engines. All of these chances to grow and improve require the ability to analyze a voluminous amount of aggregated data, the kind of concentrated computing power available only using a healthcare BI solution.
Health delivery organizations shouldn’t see the shift from ICD 9 Coding to ICD 10 Coding requirements as an obstacle, but as an opportunity to gain access to a powerful arsenal of actionable data from a BI application that is prepared to manage new coding requirements and process vast databases of patient, provider and pharmaceutical information. Without any further infrastructure investment, health institutions can benefit from a web-delivered BI solution to receive an integrated view of their business and clinical activities – from supply chain to the revenue cycle to patient care.
Integrating data, converting it to information and making effective business decisions is a powerful step toward overall health reform and increased performance.
William Kirsh, DO, MPH, is the Chief Medical Officer of Sentry Data Systems, Inc., and has decades of experience as a physician in addition to being a recognized and respected speaker at healthcare industry conferences and panels across the country.