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(HealthNewsDigest.com) – One of the cornerstones of quality healthcare, particularly in a hospital or ER setting, is continuous monitoring of a patient’s vital signs. Automated controls such as probes and sensors constantly provide readouts of heart rate, oxygen level, blood pressure, temperature and other signs of a patient’s health. Computers and digital displays of many kinds continuously feed nurses and doctors with information – especially data illuminating risk indicators. Not only does automated equipment show what’s happening in real time; it also triggers instant alarms when any vital sign strays outside safe parameters.
Why? At the risk of stating the obvious, continuous monitoring is used in healthcare settings to improve patient care – and help save lives. So, why then, when it comes to dealing with the integrity of the information that drives the healthcare system – the continuously changing membership, patient, claims, and financial information that could cost their organizations millions and potentially affect quality of care – are healthcare providers and insurers reluctant to take a lesson from operations in their own industry? According to a recent report on MSNBC.com, one in five health insurance claims are wrongly handled. Avoiding such errors and inefficiencies could save up to $15.5 billion annually in administrative costs – money that could be used to improve patient care and bring down the cost of healthcare.
Unfortunately, healthcare insurers and providers continue to rely on costly, time-consuming manual controls and auditing processes to verify information and operational efficiency. Failing to build automation into continuous monitoring of the business operations of healthcare is akin to hospitals and care centers throwing out all those expensive probes, sensors and displays in favor of the days when nurses took vital signs with mercury thermometers and blood-pressure cuffs and captured the data on paper charts. The idea of monitoring a patient’s health at long intervals and then analyzing for errors or risks days, hours or even minutes after the fact would be laughable to today’s healthcare professionals. Yet, this post-event manual audit approach is accepted in many healthcare business operations.
In today’s atmosphere, when healthcare organizations – from delivery of care to delivery of payment – are being held to ever-higher standards while being told they must do more with less, manual and internally-built controls and monitoring solutions are no longer sufficient. They cost too much, require too many resources, and most of all leave an organization too much at risk.
Most of all, the costs and inefficiencies can interfere with the basic mission of any organization in the healthcare industry: Affordable and high quality patient care. Manual home-grown monitoring tends to focus more on the mechanics of control than on the health of the business and its ability to continue taking care of people and insuring payment of their bills. And, in an era when quality of care and ability to pay are national priorities, this orientation must change – or healthcare organizations could find the figurative life of their businesses on the line. Here are two examples of those risks:
* Agencies, policymakers and commentators of different types are debating the exact number of people that could enter our nation’s healthcare system as a result of reforms underway. But one reality is not debatable: The number is large. Healthcare providers and insurers soon could be dealing with as many as 30 million new consumers of their services and benefits. They will be processing more transactions than ever before. More transactions mean more potential for errors. More errors mean more potential impact on care and payment operations.
* In January of this year, the Centers for Medicare and Medicaid Services issued new requirements for insurers and self-insured entities regarding reporting of settlements, awards and payments made to Medicare-eligible claimants and/or plaintiffs. Fines as much as $1000 per day per claim could be levied against organizations unable to report accurate information. With today’s focus on reform and cost containment, healthcare organizations cannot afford financial damages or injuries to reputation.
Continuous Monitoring (CM) solutions that automate the monitoring and control of large, complex sets of information are the best way to cope with these risks. CM enables healthcare organizations to continuously monitor and control activities and information across an entire enterprise, providing a broader range of benefits than solutions focused merely on financial data or ERP systems alone. With CM, organizations can move beyond manual, semi-automatic or even embedded controls, improving their ability to reduce costs, mitigate risks, improve business processes and streamline compliance. In effect, it removes many of the distractions healthcare organizations face, so that they can place their focus on their primary mission – doing the things required to save and improve lives.
Inter-related systems
Like medical specialists assembled for a consultation, there is a tendency for different parts of a healthcare organization to focus only on their area of concern when examining monitoring and control requirements. That can be a fatal mistake, because just as the various parts and systems within the body are inter-related and interdependent, so are the systems within a healthcare organization providing services to that body.
Take cost-containment, for example. The financial department is focused on assuring costs meet predetermined budget levels. When an organization uses manual internally-built controls, the temptation to inspect data in batches and samples is strong. Why? Because verifying the entire data set on a continuous basis is costly and time-consuming. While batch-processing drives costs down, like a fever it could spike an organization’s level of risk, perhaps to dangerous levels.
A CM approach accomplishes the same type of cost reduction without compromising risk management. With a manual process, the cost is in the labor. CM removes those labor costs by monitoring the data – all of the data – automatically, on a continuous basis. It also allows the organization to expand its controls cost-effectively beyond the original scope of the manual solution, further reducing the level of risk.
As part of this process, CM creates an audit trail for every activity. When an anomaly arises, the research and resolve process is greatly streamlined because all of the data is easily visible and searchable. Further savings are realized because appropriately designed automated controls require testing once during any given evaluation period, versus 15 to 25 times for manual controls.
This holistic approach is critical to the long-term health and success of healthcare organizations, particularly in the current highly-regulated environment. Putting automated controls in place across the enterprise now will not only ensure they can meet their audit and regulatory obligations today; it will help them improve business processes on an ongoing basis to continue to provide the level of healthcare to which they aspire in every aspect of the business. It will also help insulate them from the ever-changing landscape of government regulations and auditor requirements, ensuring that the investments made today are not lost as new policies evolve.
Making the case
Those are the broader reasons to move to a CM solution. Yet often a change in controls within an organization is driven by compliance, and is only implemented in the aftermath of a costly and embarrassing information risk event. Until that cataclysmic event occurs, top management generally is content to push continuous monitoring to the background in favor of other organizational priorities.
One of the keys to making the case for CM is showing how an ounce of its prevention is worth a pound of after-the-fact cure. If an event arises, resolving it will be very costly in terms of time and resources. It’s very likely that it will bring other initiatives to a halt until a cure is developed. In the meantime, the reputation of the enterprise suffers – something that is likely to continue even after the matter is resolved.
But that alone will not be enough. That’s where it’s important to create a strong business case articulating short- and long-term value propositions that resonate with top management’s higher goals. The argument becomes even stronger when presented with cost-benefit analyses, demonstrating bottom-line results in metrics such as Net Present Value, Internal Rate of Return and Payback Period.
When building the business case, in addition to those already discussed, following are some key points to include:
* Reduce the cost of compliance. The time and cost of audits and Service Level Agreement (SLA) violations are examples of the cost of compliance. CM helps reduce those costs by streamlining the audit process, thereby reducing the cost of control audit and testing (as well as the penalties for non-compliance), and by providing better coverage to mitigate risks throughout the organization.
* Reduce risk through early detection. CM lowers probability of a risk event (and the attendant penalties) by detecting errors early in the process. Just as early detection is the key to curing many diseases successfully, early detection of errors is the key to avoiding significant information problems later.
* Expand control coverage. Most healthcare organizations don’t focus on deploying controls in processes that are deemed to be low to medium risks because of costly manual or internally-developed controls. The low incremental cost of deploying a CM solution in these processes enables organizations to mitigate these risks in a cost-effective manner. In many ways, it’s like the difference between a basic HMO and premium health insurance. Only without the huge increase in price.
* Improve processes. While the financial value of process improvements can be difficult to quantify, their value in establishing buy-in should not be ignored. Expected process improvements need to be clearly articulated in the business case, and where applicable, appropriate assumptions need to be made to estimate value. Among those are a drastic reduction in the amount of time required to perform the control activity; validation of 100 percent of transactions while providing visibility into control actions; and, a complete audit trail that validates information is accurate, trustworthy and reliable while providing better insight for an organization to make effective bottom-line business decisions.
In any enterprise, audit and compliance issues can feel like life or death to those involved. In the healthcare industry, though, that risk is not just figurative. It also can be literal.
For further information: www.infogix.com
Continuous Monitoring can help reduce greatly risk (and associated costs) by tracking automatically a business’ vital signs and alerting key personnel when problems or violations are in an early stage, so that proper treatment can be applied before issues threaten the life of an organization. CM can also keep the enterprise healthier by improving business processes so it can run more efficiently. Because in business as in healthcare, an ounce of prevention is worth – well, you do the math.
Sumit Nijhawan is the Company Operations Leader at Infogix, a software company whose solutions monitor, detect and prevent information errors. Before coming to Infogix, Sumit worked for the Blue Cross Blue Shield Association, SPSS, Inc., and PricewaterhouseCoopers. Sumit received a Bachelor of Arts degree in physics and chemistry from Coe College, a Ph.D. in engineering from Brown University and completed the Program for Leadership Development at Harvard Business School.
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