March 21, 2016 Ask Owen

Top Five Priorities Tips for Improving Practice Profitability

Seven years after passage of the federal Health Information Technology for Economic and Clinical Health (HITECH) Act, more than 83% of U.S. physicians adopted Electronic Health Record (EHR) technology, up from just 24% in 2005. Yet, while clinical documentation has been largely digitized, operational and financial systems have taken a back seat to other priorities. Providers are now looking to modern cloud-based IT solutions to help drive financial performance and reduce the administrative burdens that distract them from patient care.

CareCloud, in partnership with QuantiaMD, conducts an annual practice profitability index (PPI) study of more than 5,000 physicians to determine the operational health and profitability outlooks of U.S. medical practices. Now in its third year, the PPI serves as a barometer of the current state of physician practices, spanning a wide range of practice sizes and specialties, and provides insight into physician outlooks.Crushed Hamilton
While more practices are optimistic about their future profitability than in years past, the use of technology to improve operational performance is still a major concern. The PPI shows that physicians continue to grapple with billing and collections, staffing and outdated technology. However, they are actively investing in new ways to shore up practice operations and boost profitability, with technology playing a key role.

The 2015 PPI study uncovered these areas as the top five target areas to improve operational performance:

Billing and Collection Processes
As physicians look to position their practices for success going forward, it is no surprise billing and collections is the top target area providers will need to address to help improve operational performance. According to the PPI, 40% of physicians surveyed place billing and collections as their top target area for improvement, which is fitting since two in five practices are struggling to secure quick and proper patient payments.

Improving billing and collections processes will become even more important as patients assume responsibility for a growing share of the cost of care. According to an American Medical Association study, patients are now responsible for roughly 25% of the total medical bill, and that percentage is only expected to rise. Without proper patient payment processes, controls and IT solutions in place, medical groups are vulnerable to revenue losses and higher collection costs.

The complexities of payer reimbursement, including coding and credentialing, are also adding to the administrative burden for medical practices. Modern revenue cycle management and practice management systems can help, especially those with automated billing rules that catch potential errors proactively, along with billing personnel who stay up-to-date on submission and coding standards. Furthermore, as value-based reimbursement continues to dominate the payment landscape, risk management tools will be critical in correctly identifying and reporting patient population risks.

Staffing Concerns
Realizing the full value of technology from RCM and A/R systems to practice management, patient engagement and other technologies requires a heavy commitment to process improvements and effectively optimizing staffing levels.

According to the PPI, 34% of physicians see staffing as a critical area to address as they look to position their practices for future success. As the demand for healthcare services steadily increases, so does the demand for clinical and non-clinical staff. The U.S. Congressional Budget Office projects an additional six million non-elderly Americans will gain access to insurance in 2016 as a result of the ACA. With this influx of new patients, practices will need to assess staffing levels across their organizations to ensure they can meet this demand. They will also need to ensure they have the right IT systems in place to help them maximize efficiency across daily workflows — from scheduling patients to documenting visits and billing for them.

In addition, constant change in the healthcare industry often leads to the need for additional employees to absorb the resulting increase in workload or bringing particular areas of expertise. For example, with regulatory shifts like the transition to the ICD-10 code set, practices may find they need to hire individuals with particular coding skillsets to fill gaps internally. Providers will need to assess their current staffing situation regularly to ensure they have the right people, training, and processes in place to get the most from their IT investments and meet the demands of an ever-changing industry.

Core IT Investment
Most practices, by a long shot, are not fully satisfied with their current healthcare IT investment. According to the PPI, almost 20% of physicians plan to replace their practice management (PM) and/or electronic health records (EHR) systems in the coming year. This statistic is a further affirmation that physicians are looking to modern IT solutions to help drive the operational and financial health of their practice. Key drivers of this rip-and-replace trend include systems that are not cost effective, fail to integrate with other technologies and are hard to use and slow them down. In general, physicians appear to be growing increasingly frustrated with hard-to-use solutions, as the figure jumped six points from 31% in 2014 to 37% in 2015.

Practice Analytics 
The days of Excel spreadsheets for analyzing leaks in the medical billing process and other areas for practice performance improvement are long over. According to the PPI, over one-quarter of physicians (26%) are targeting analytics as a means of improving operational performance in the coming year and 13% specifically plan to adopt a better analytics solution.

Analytics is one area of IT where ROI can be realized particularly quickly, especially if solutions present the data in easy-to-interpret formats. Practices can use analytics to answer important questions about financial performance, patient satisfaction, claims efficiency, human resources and much more. Many easy-to-use analytics tools are included natively in the leading healthcare IT packages, making them immensely useful for tracking practice performance, identifying trouble spots and making data-driven practice management decisions.

This article originally appeared here.

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