There's a Right Way and a Wrong Way to Upgrade a Hospital Finance System

March 10, 2016

Hospital Finance ChartWhen a hospital's profitability is riding on the efficiency of its finance department, a finance director can’t afford to bungle a big system upgrade. And big upgrades are likely to become more commonplace in the near future as the American healthcare industry moves out of the first phases of digitization and begins to make more strident efforts to tackle Meaningful Use and interoperability.

Moreover, hospital systems that were early adopters in the digitization wave are now approaching or passing the point at which their EMR systems reach obsolescence. First and second-generation EMRs just can't do what those providers will need them to do within the near future.

Unfortunately, procurement isn't cheap. In addition to the costs of the technology itself and of reductions in productivity immediately post-rollout, there are consulting fees, training costs and downstream upgrades or software patches to consider.

So what is the right way to go about upgrading and implementing a system? Are there lessons we have learned from the industry's first big go around with data migration? What should hospital finance directors bear in mind when deciding where, how and in what to invest?

It's important to remember that accountable care standards will continue to evolve.

The market will demand that healthcare providers become more agile than they have traditionally been. In a fast-paced technological and uncertain regulatory environment — and with profits increasingly under pressure — the industry needs to focus on developing versatility.

That means hospital finance directors need to continue to be forward-thinking and to understand that what they are investing in today may not meet the regulatory standards of tomorrow. The electronic medical record and hospital finance systems they acquire need to be designed with easy adaptation in mind.

They also need to ensure that their organizations establish procedures for continual evaluation of patient needs and EMR functions. As innovation continues in healthcare, hospitals should prioritize (and budget for) ongoing testing, to ensure Meaningful Use is maintained once it is attained.

This means that hospitals systems and provider organizations shouldn't wait for legislation to tell them what functionality they need to obtain. To remain competitive and to continue to improve outcomes, they need to stay on top of the latest technological capabilities available to them. And hospital executives must understand those capabilities' potential applications and invest in further innovation.

Plan for procurement and implementation.

Procurement should never take you unawares. Nor should it be an expense that significantly impacts overall operations. In an ideal scenario, a hospital or healthcare organization should be continually allocating resources to be used for procurement when and where investment in new tech becomes necessary.

Ideal scenarios rarely play out in the market, though. If your organization has identified the need to invest in new tech and is unprepared for the expenditure, it is critical to ensure that funds diverted to the project do not significantly impact the ability to provide care to your patients.

When evaluating replacement systems, there are many questions that you should be asking potential vendors before you sign on the dotted line. Don't allow yourself to be wowed by a software demonstration until you ask the following questions:

  • Can the system run on the hospital's existing hardware?
  • If so, how long do you expect your hospital's existing hardware to last? What are your costs for upkeep?
  • If not, what hardware purchases will be necessary before implementation?
  • What is the expected service length of that hardware? Is it durable? Adaptable? Plug-and-play? What and when are the recommended maintenance checks? What are common repairs? How much would those cost, in dollars and in lost productivity?
  • If new hardware must be installed, what are the costs to do so?
  • Who installs new hardware? Is this handled by the software vendor or is another partner necessary?
  • Will the vendor provide user and IT maintenance training? Is training included in the system purchase price?
  • How long will the training be supported? Will you need to develop additional in-house training capabilities to serve new employees post-implementation or will those duties also be handled by the vendor?
  • What is the total expected timeframe, from purchase to final implementation?
  • How would implementation affect patient care?
  • Can protocols be established to mitigate or avoid tech-induced productivity bottlenecks on the wards during the rollout period? You'll need to work closely with the medical staff, nursing and clinical support managers to identify potential pitfalls.
  • What would downtime look like with the new system? As with any piece of network-based software, there will inevitably be the need for updates, uploads, retools and patches. How long would downtimes last and what would be their effects on patient care or business operations?
  • After go-live, who will be your organization's point person for identifying pain points and modifying or fixing the system? Will this fall solely on the CIO, or a small task group? How will you establish reporting channels and who will monitor them?

Agree on data collection and analysis practices beforehand.

Before the new system ever goes live, all the areas of the organization that it will impact should agree on how data will be entered, catalogued, stored and used. This should help to minimize the number of upgrades and new coding tasks the organization will have to undertake. It should also help to ensure that interoperability measures are protected.

If, for example, all the departments have had a chance to evaluate and provide input on the mapping of data entry screens, tab positioning, data formatting and even the writing style that will be used for encounter documentation, a hospital can avoid having to code additional or semi-redundant screens and improve subsequent data searchability.

Commit to continuing quality improvement.

Maintaining a new system's integrity requires vigilance from a large group: users, managers, providers and IT professionals all have a role to play in making sure that, once a new system is up and running, it is positively impacting patient care.

Hospitals and provider organizations need to cultivate a sense of shared responsibility among all of their internal stakeholders. Everyone on the team should feel empowered to speak up when an IT system isn't living up to expectations or programming needs to be tweaked. And they should also feel empowered to address barriers they encounter — be they internal or otherwise.

Part of the quality improvement methodology should include convenient outlets for reporting problems and meaningful recommendations for when and how documentation should be undertaken. Departments within the hospital need to be encouraged to communicate not only with the IT department and with upper management, but also with lateral siloes when problems crop up.

For example, if an upgrade, software patch, or tweak to the code in one region of the hospital finance system triggers difficulties in another, those difficulties should be immediately and clearly identified, and all the stakeholders within the revenue cycle should work together to figure out a solution that works well for everyone.

Hospital Finance Director's Guide to Strategic Planning

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