Controlling Hospital Costs

Part of fixing healthcare is controlling costs at the hospital level, and finding cash leaks.

Introduction

Part of fixing healthcare is to control costs at the hospital level.  In previous articles we have explained how we are streamlining and automating health insurance and saving about half, but part of the overall strategy to lower costs for the patient is to control costs at all levels.  Today we are going to focus on streamlining and automating the practice and the hospital.  

Every healthcare conference you attend will have some breakout session about finding where the money goes.  This generally involves days or weeks of an accountant pouring over spreadsheets.  This is fine, but with the right data in the right spot this should be a report that is available with a single click.

Enterprise Resource Planning (ERP)

An ERP is a single piece of software that runs your entire enterprise.  If a thing happens or is scheduled to happen it should go through the ERP.  Almost all of the current ERP providers will modify their offering for you.  This is not the way to run a railroad.  If you have been following along, you know that we solve the general problem and don’t need to modify our offering for anyone.  Before you complain, realize that all businesses run exactly the same.  That is why there are Generally Accepted Accounting Principles (GAAP).  Your practice/hospital is a business and must be treated as one.  Your product is health.  You have processes and products you use to deliver this outcome.  These processes can be fully documented and their management automated.  All the worker bees have to do is to do the tasks they are assigned and check them off when they are complete.

Let’s take a look at specific functionality.  

The Functionality

Accounting

Accounting is the process of counting the beans.  You have to know who owes you, and how much, who you owe and how much, what the bank account has in it and what everything is worth at any given time.  This must be a point in time calculation that requires no special work other than clicking a button to get a set of reports like an Income Statement, a Balance Sheet, a Statement of Cash Flows, and a Statement of Retained Earnings.  We do this using a general ledger system.  

Receivables

We provide a user interface for Receivables data entry, and tax categorization of income.

Payables

We provide a user interface for Payables data entry, and tax categorization of expenditures

Purchasing and Acquisition

We provide a way to document purchases of both consumables and durable goods.  

Asset Management

Durable goods and capital assets are generally serviced by their manufacturer.  This scheduled maintenance, however, has to be tracked by the business/practice/hospital to ensure that the manufacturer isn’t gouging on more-frequent-than-necessary-maintenance or that the necessary maintenance is getting done.  

Human Resources

This is the repository of all things employees.  HR systems are tasked with tracking employee data and benefits information, managing employee performance and payroll. You can also use HR software for recruitment, onboarding, and training of new hires.  Our questionnaire package is adequate for training purposes.  You simply add a training video and the questions as a test at the end.

Inventory

This tracks everything that the business/practice/hospital owns.  There are different kinds of storage including secure and air conditioned storage, but the automated part is to scan a barcode when the new materials are received so that we know it was received and stocked and where it was stored and another to track the check out, allowing us to track actual usage.

Project Management

Everything we do can be called a project.  This is where most practices and hospitals go wrong.  They start calling things ‘workflow’ and the process must be executed in a specific order. If we are doing a colonoscopy for example, we need a doctor, a CRNA, a room, a colonoscope and a  patient.  That is it.  These things are dependencies, but not workflow.  So for the colonoscopy project template, we need these things.  Notice that they aren’t in any particular order.  When we need to do a colonoscopy then, we just assign values to all the dependencies needed to accomplish the task.  This also includes consumables like anesthesia and bandages. These consumables are packaged in a named bundle that we can add to the project and account for them as a package.  This makes tracking inventory a one click operation for each step in a process.  These processes can also be hierarchical and stacked up.  If we schedule an upper and lower endoscopy, the bundle discount is automatically applied.    

Customer Relationship Management (CRM)

In a practice or a hospital this is where we would track appointments and that the patient has all the necessary information and has completed the prerequisites for their visit. In other types of business this would track sales and marketing.  If you ever need to promote your practice, this is where you would do it.

Reporting

This is kind of a one stop shopping solution for all our reporting needs. The accounting reports, the questionnaires, the estimates, everything we need will be done in the same format and with the same technology.  This makes development fast, robust and uniform, keeping costs down and minimizing time to market.

Architecture

One of the things that makes us different is the way we put together an application.  If technical discussions make your eyes glaze over, you can skip to The Competition section.

Master Data Management (MDM)

The MDM is the repository of things that will be used across the enterprise.  These are things like descriptions of people and places and emails and websites and phone numbers.  

Single Sign On (SSO)

The SSO is the repository of all things Authentication and Authorization.  We link back to people and companies that reside in the MDM and document who works for what company and what they can see and modify here.

Application Programming Interface (API)

This is a generic way to create, read, update, delete and search data in the database of an individual application, like the Accounting or HR application.  This layer is almost completely generated, saving us time and therefore you money.  This also includes a business logic layer that gives us an isolation layer between the database and its ultimate consumer, you, in case the database needs to change.

Backend For Frontend (BFF)

This is where the consolidation of disparate databases comes together.  The CRM application will need access to the MDM. the SSO, and the Project Management generic, generated APIs.  This allows us to reuse these generic APIs at will and data will be automatically integrated.  The BFF then packages these various data sources into a single object to pass into the User Interface (UI)

User Interface (UI)

This is the only thing the users see, therefore it is the application.  Our is designed and built by our User eXperience (UX) team to be intuitive, fast and easy to use.

The Competition

There really is no competition for this ERP style practice management system.  Every medical company sees Practice Management as a billing system, thus requiring several other systems and hundreds of thousands of dollars in integrations.  Nobody makes a hospital ERP.  There are any number of ERP systems, but they are all modified to their particular industry, meaning that they do NOT solve the general problem.  There is only one that is modified to suit the medical industry and since it is modified that means it is less than well thought out as well.  

The name of the one ERP system, internally they call it an accounting system, is Acumatica.  We find these challenges documented on their site:

• Provider/insurance challenges due to medical billing and coding complexities.
• Lack of communication between staff members.
• Inefficient workflows and processes that impede the proper gathering of patient information, including insurance eligibility and co-pay amounts.
• A lack of automated reminders to follow up on rejected claims, leading to substantial but preventable financial losses.
• Non-compliance with GAAP guidelines, resulting in fines.

Let’s break these down by the each.

• Medical billing and coding complexities - With our insurance you don’t have medical coding (see our other articles for an explanation), with everyone else the coding complexities should be taken care of by your medical coders.  As far as billing, either you have been paid or you have not, that is pretty simple to detect with a general ledger, which we provide.
• Lack of communication between staff members - You don’t need communication if you have the process documented with the project management software.  We add the dependencies to the process template, then we can tell which dependencies have been completed.  No communication required.
• Inefficient workflows - You can’t have inefficient workflows if you don’t have workflows.  We use dependencies and templates to accomplish things. This means that we can cross train our workers to help out when someone’s task list becomes unmanageable.
• Automated reminders - You don’t need automated reminders if you have a list of tasks to accomplish in an instance of a process template that has not been completed.
• Non-compliance with GAAP guidelines - We don’t use people to enforce GAAP.  We have people to manage A/R and A/P and the system enforces the GAAP for us.

Clearly solving the general problem is beyond Acumatica.

How Ours is Different and Better

There isn’t really anything on the market like this.  Any existing ERPs are decades old, written in archaic programming languages and don’t solve the general problem.

Architecture

Given our design and execution, we generate over half the necessary code and then just plug it together to present to the user.  This makes us incredibly efficient at producing base and new features.  Since we solve the general problem, this ERP is adequate for any enterprise task.  For example, our scheduling component was designed to be able to accommodate Whitesnake at Reunion Arena in 1985.  We can add data for a stage, box office, ushers, custodial staff, tickets, seats and everything necessary to put on that show, then.  Certainly, if we can do that, we can describe your practice/hospital/business with data only, no expensive, custom development required.

Integration

Since this is one system, we do not need any kind of integration.  If you have other systems that need to integrate with the ERP and use our data as native, all we need is to provision a new user in the system, give them the appropriate permissions to view and modify data, and they can use our APIs natively.  This is exactly how we do it, too.

Training

If your program needs more than a few hours of training it isn’t well designed.  We put a LOT of thought into making this as easy to use and intuitive as possible.  

Conclusions

With the Electronic Medical records System (EMR) with integrated health insurance that we provide, this makes everything the practice or hospital does, part of a well documented process.  We don't automate manual processes, the path we see so many ERPs go down, we take the inputs and produce the outputs needed, except for actually delivering the care.  

If everything you do is documented, then we can start to produce reports that show us where the inefficiencies are.  We don’t need to burden care givers with this documentation either. We find that most of us do the same things over and over day after day.  These things then get “templatized” so we can easily reproduce the documentation for each process.  For example in our EMR, we can mark any encounter as a template.  With a single click then, we can reproduce that template as a new record for a different patient.  The doctor doesn’t have to go and make the templates.  The templates also won’t go away when there is an upgrade like I see in many Practice Management systems as well.

The templates for the practice management system will be a little more complex, as we have to account for many more things, but we have base templates pre-built for almost all the things you will need to do.

Like the four financial reports above, we can and have produced a “where the money is going” report.  Run it and find out if you have a shrinkage problem or a labor problem or a vendor coming everyday to service your MRI machine or whatever it is.  You will still have to know what the correct values should be, but now you have the data to determine what each procedure should cost, right down to the square footage of the operating room, the salary of a particular nurse practitioner and everything that goes into doing what you do.  

This is not just for the hospital either.  I would argue that it is more critical in the private or small practice to manage these costs, since there is less margin for error.  Further, the cost of setup is orders of magnitude smaller than any of the other Practice Management systems extant, and there is no modification.  Moreover, this is adequate to run any enterprise, since everything is data driven.

We have shown a way to fix the hemorrhaging of money from the practice and hospital in medicine.  Unlike our EMR, this system is designed, but not yet built.  If you liked what you read contact us here, on our site, SentiaHealth.com, our parent company SentiaSystems.com, or send us an email to info@sentiasystems.com or info@sentiahealth.com.