HMIS [Health Management Information Systems]: Linking Payers and Providers December 2009 Dennis J. Streveler

2009 UPDATE Deflation of computer costs continue Emergence of mobile phone technologies Near ubiquity of Internet connections and the emergence of “cloud computing” New “open source” applications for healthcare Further progress with the Electronic Medical Record and Telemedicine

2009 CHALLENGES REMAIN Support and sustainability of computer systems in many environments is still poor Healthcare systems, especially payer information systems, remain among the world’s most complex systems Reliability of communications channels is often over estimated

Four Goals of HMIS June 21, 2007 ACCESS Improving Access to health services by the Population EQUITY Ensuring Equity in the provision of health services EFFICIENCY Increasing Cost-Efficiency and productivity QUALITY Improving Quality of Care and health outcomes

Three components required:

SYSTEMS INTEGRATION! 1.These 3 components must be thought of as ONE effort, since they will closely interlock with each other. 2.The development of these 3 components must be synchronized with each other – having one advanced component while the others lag will not provide the desired result!

Integration enhances synergy through inter-operability!

What is a claim? Provider Payment Method Claim Content Capitation A “claim” may consist of a roster of patients for whom capitation payments are due Fee-for- Service A claim will include a (detailed) itemization of the services which were performed. Per-diem Payments A simple claim itemizes only the number of inpatient days spent at each level of care. Case-rate payments A claim includes only a simple categorization of the case- rate being billed. DRG-based payments A claim will include the DRG category, which is computed based on various aspects of the patient’s condition upon admission and upon discharge.

BASIC PROVIDER SYSTEM FUNCTIONALITY 1.Enrollment, patient registration and eligibility checking 2.Appointment scheduling 3.Claims creation and submission 4.Payment processing 5.Contract monitoring and negotiation 6.Business-unit management 7.Inventory management

ADVANCED PROVIDER SYSTEM FUNCTIONALITY 1.Electronic Medical Record 2.“Health Passports” 3.Clinical Guidelines and Protocols 4.Telemedicine (telehealth, teleconsultation)

PAYER SYSTEM FUNCTIONALITY 1.Beneficiary Management: Registration and eligibility 2.Premium contribution collection 3.Contracting and contract management 4.Claims adjudication and management 5.Fraud detection and provider profiling 6.Provider payments 7.Utilization management 8.Case management 9.Quality management 10.Fund management

THE ELECTRONIC LINK BETWEEN PAYER AND PROVIDER 1.Sharing of patient eligibility and rosters 2.Transmission of claims to the payer 3.Transmission back of anomalies and errors 4.Transmission of payments from the provider to the payer 5.Transmission of utilization management and quality assurance data from payer to provider (“the report card”)

OPTIONS FOR “THE LINK” 1.Point-to-point connections 2.Passive “hub” for switching transactions 3.A “smart” central clearinghouse which does some edits and audits of information as it is passed through.

CONNECTIVITY OPTIONS OPTION 1: Inefficient point-to- point communications OPTION 2: A “star network” clearinghouse

Project Guidance Component Cost Guidance Timeframe Guidance Payer Systems These systems are highly complex and highly individualized. Expect a Payer System to cost a minimum of US$1 million. Midrange systems will cost approx. US$10 million. The most sophisticated systems will cost US$20 million or more. Extremely ambitious: 24 months Average timeframe: 42 months Complex system timeframe: 60 months or more

Project Guidance Component Cost Guidance Timeframe Guidance Provider System (100 bed hospital) Provider systems are far more “standardized” than are Payer systems. A current rule-of-thumb cost estimate for a midrange system is in the range of US$1,000 per bed, or US$100,000 for a midrange system for a 100 bed hospital. Extremely ambitious: 12 months Average timeframe: 18 months Provider System (5 physician clinic) Clinic Information Systems are now becoming commoditized. Prices range up to US$50,000 for a high-end CIS, and far less for mid- and bottom-range systems. Ambitious: 4 months Average timeframe: 6 months

Cost Guidance Component Cost Guidance Timeframe Guidance Electronic Link between Payer Systems and Provider Systems It is impossible to estimate the cost of constructing this interface, as requirements and specifications vary wildly depending on a complex set of environmental, technical, organizational and political factors. Likely timeframe: 1-2 years or more

IN CONCLUSION 1.Three synchronized HMIS activities must occur to optimize the electronic flow of information to support provider payments: a.Providers must have systems b.Payer(s) must have systems c.The systems must be able to “talk to each other”

IN CONCLUSION 2.Costs and implementation timeframes can vary widely based on environmental, technical, organizational and political factors. 3.It has become nearly impossible to implement a modern strategic purchasing protocol (provider payment scheme) without employing modern information systems!