Invest in computers to stay competitive

Save money, win contracts

When it comes to investing in computer technology, many physicians simply refuse to do it. Experts say physicians who are left behind by technology, however, will be left out of the marketplace.

"The doctors want to spend money on what they perceive to be direct patient care," says Lynn Howell, CMM, administrator of University Family Physicians, a seven-physician primary care practice in Charlotte, NC. "They don’t always see computers as being related to that."

But information technology is an absolute necessity for most physician practices, says Ron Sterling, CPA, MBA, president of Silver Spring, MD-based Sterling Solutions. Sterling says there are two main trends in the health care industry that make computers a necessity:

Physician groups are growing in size and scope, which magnifies the potential for costly inefficiencies. Computers enable practices to be run more efficiently, thus saving money.

Payers are giving physicians more sets of payment procedures to obey. Practices can maximize reimbursement by using computers to help them meet the requirements of all their different payment systems.

Demonstrate savings

Of course, getting practice leadership to see it that way may be an uphill battle. "The main key is to show them the savings in employees," Howell says. "In a practice I used to manage, I wanted to upgrade our system to one that was more integrated and capable, including things like electronic claims filing. I showed them we could save two employees’ salaries with the new system." That projected savings tipped the scales, and the physicians approved the new system’s purchase. (See related story on tips for choosing a computer system, p. 117.)

Experts say an investment in computers can pay for itself by enabling practices to document outcomes information and to meet other requirements that are essential in doing business with managed care organizations.

"As managed care grows around the country and physicians compete for contracts, the one thing physicians everywhere will need is clinical outcomes data," says Reed Tinsley, CPA, a consultant with O’Neal, McGuinness & Tinsley in Houston. "How can a doctor get a managed care contract or make sure he or she won’t get deselected? The answer is clinical data. I have to show the payer I am a cost-effective physician. I need to know what my clinical outcomes are by diagnosis."

"The bottom line for physician practices that want to succeed is to gather good data," says Leanne Greentree, MBA, president of Main Street Software in Sausalito, CA. "With good data you can make good contracting decisions. You can understand what your costs per CPT are. If you’re an independent practice and you’re thinking of joining an IPA or MSO, you’re much better prepared to enter into those kinds of negotiations."

Greentree tells the story of a practice that had purchased Main Street’s managed care contracting software. The practice called Main Street’s technical support line, saying there must be something wrong with the software. The practice had plugged in the figures from a managed care contract it was considering signing, but the projected results looked all wrong.

"The tech support people audited everything the practice did, all their numbers, and walked through the whole program with them for about an hour," Greentree says. "Then they figured out that there was nothing wrong with the software; the deal they were being offered was so incredibly low that the numbers looked wrong. They printed out their analysis reports and went back to the payer, and were able to negotiate a much better rate."

Howell cites managed care as the main pressure necessitating her practice’s investment in information technology. University Family Physicians does about 60% of its business under managed care. "Three years ago it was more like 20%," she says. "Because our overall reimbursement has dropped due to managed care, we’ve had to be more careful with overhead, and computers have helped."

Typical overhead for a primary care practice is 55% to 65% of revenue, but University Family Physicians has an overhead of 47% to 48%, Howell says. "The most important thing is to be able to run the practice in a more cost-effective manner. You need to have fewer employees. Our computer system enables us to run the office with fewer people."

University Family Physicians uses computers for the following functions:

Patient check-in and registration. The computer generates the patient’s encounter form at check-in, Howell says.

Appointment scheduling.

Check-out function. This includes posting charges and payments, as well as entering codes from the visit.

Generating patient statements.

Generating electronic claims for those payers that support electronic claims filing.

Collections follow-up. Every day, the practice’s computer system automatically prints out a list of accounts that are over a certain age.

Interface with outside clinical laboratory. The practice’s computer system prints standardized labels for specimen vials and for requisitions. A courier delivers the requisitions and specimens to the laboratory. The next morning, the lab sends results back to the practice’s computer via modem.

Interoffice e-mail. "Our phone coordinator sends our physicians their messages by electronic mail," Howell says.

Computer technology has saved University Family Physicians money on supplies, as well. "Our RN who’s responsible for ordering supplies uses a spreadsheet program to manage inventory, do cost control, and to get the lowest prices on what we order," Howell says. The ordering person obtained full price quotes from four vendors for all supplies the practice might need. She entered all the quotes into her spreadsheet, itemizing them by vendor, item, and price. "When she needs to order more adhesive bandages, she can pull up her spreadsheet, see who’s got the lowest price, and order from them," Howell says.

Inge Holman, MD, Pensacola, FL. Telephone: (904) 469-0074.

O’Neal, McGuinness & Tinsley; Reed Tinsley, CPA, Consultant. Telephone: (713) 993-0847.

Main Street Software, Sausalito, CA; Leanne Greentree, MBA, President. Telephone: (800) 548-2256.

Sterling Solutions, Silver Spring, MD; Ron Sterling, MBA, CPA, President. Telephone: (301) 681-4247.

University Family Physicians, Charlotte, NC; Lynn Howell, CMM, Administrator. Telephone: (704) 548-5990.