Study - CHINs save money, reduce paper shuffling

Access functions are streamlined

It has been said that health systems are built on paper. The cost of shuttling reams of paper from one location to another is immense. A handful of health systems around the country are eliminating that cost by transferring information through cyberspace via Community Health Information Networks (CHINs). In essence, CHINs function as mini-versions of the Internet. Only in this case, the term intranet might be more appropriate.

The benefits of such speedy transfers of information appear to be particularly valuable in a managed care environment where efficiency has become almost its own religion. The time savings are significant, and the cost savings can quickly reach the six- and seven-figure range, according to studies by the Wisconsin Health Information Network (WHIN) in Brookfield, WI. WHIN is one of the nation’s oldest and largest CHINs, linking 14 hospitals, 1,100 physicians, seven insurance companies, eight clinics, four home health agencies, four private billing services, and three ambulance services, as well as at least one lab.

"There is little doubt . . . that the economic impacts of WHIN are both real and substantial," says Kathy S. Lassila, PhD, who conducted the studies while working for University of Wisconsin – Milwaukee’s School of Business Administration. Savings potential ranges from $400,000 to $1.1 million or more per health system, depending on the volume of information responses eliminated by WHIN use, Lassila found.

Preliminary results from the study show cost savings in a variety of areas. (See p. 80 for a complete listing.) For hospitals, these include:

• insurance verification and patient admission;

• medical management and utilization;

• claims inquiries and follow-up;

• insurance inquiries and customer service.

For primary care practices, cost savings include:

• eligibility determination for patient visits;

• precertification for tests and procedures;

• referral requests;

• claims inquires and follow-up.

For specialty practices, benefits include:

• referred patient eligibility and authorization;

• precertification and preauthorization;

• claims inquiries and follow-up.

In some cases, access functions are enhanced by WHIN’s ability to automatically check insurance eligibility and electronically submit Health Care Financing Administration 1500 claims for all payers. Through WHIN, registrars soon will be able to receive insurance verification as they are admitting a patient, says Marsha Radaj, vice president for operations. "As soon as the admission person enters the insurance information, the transaction will be kicked off to the payer that verifies the insurance, so we can provide eligibility information at the point of service," Radaj says. "We are currently in contract negotiations with Blue Cross-Blue Shield and some of the other larger payers and are working with a large clearinghouse that will bring access to these payers."

One of the hospitals in the network has implemented the use of a preadmit template — containing all the necessary registration information — that physicians’ offices send electronically when one of their patients is being admitted to the hospital, she adds. "In some instances, [hospital registrars] may not have to recontact the patient." This innovation was made possible, Radaj says, by a forms generation package within WHIN’s e-mail system.

Not only can CHINs help speed the transfer of information, saving lots of money, they also have beneficial applications when health systems merge or acquire satellite facilities. Often when this happens, the various entities have disparate computer systems that don’t communicate well with one another, says Michael Jordan, president and general manager of WHIN.

"Integrated delivery systems, as they grow, need to be able to communicate electronically between facilities," he says. "WHIN can help them solve that compatibility problem."

That was a problem faced by Milwaukee-based Aurora Healthcare, one of Wisconsin’s largest managed care health systems with more than 100 facilities, including 14 hospitals, that blanket the eastern part of the state. "When a new facility joins our system, it isn’t feasible to say to that facility, ‘Tomorrow you are going to turn off all of your old computer equipment and use this new hardware and software,’" says Jim Jeffery, manager of imaging systems development for Aurora, which is a part owner of the WHIN network.

Instead, a new facility subscribes to WHIN, which provides the computer interface that allows the different computer systems to send and receive data. This is similar to the Internet, which allows MacIntosh and IBM systems to communicate.

Eventually, Jeffery says, the goal is to have the same hardware and software at all Aurora facilities in the network. "But that is going to take time to accomplish. During that transition, WHIN is certainly proving to be a big help."