Healthcare IT News - November 2008 - (Page 42)

www.HealthcareITNews.com management solutions November 2008 ■ Healthcare IT News 41 Is outsourcing ‘in’ or ‘out’ in healthcare? By John Andrews, Contributing Editor to foreign countries like India has been gaining traction for several years, and while it has flourished among companies in the general economy, it hasn’t really penetrated the healthcare sector. But as concerns about logistics and communications have eased, returns on investment touted and reimbursement pressures continuing to mount within healthcare, provider and payer organizations are starting to give the concept a try. Outsourcing firms occupy a curious position right now, either poised to benefit greatly from corporate downsizing amid a turbulent economy, or possibly undergoing contraction themselves as all businesses seek shelter from the financial storm. Manoj Malhotra, CEO of Salient Business Solutions, a New Delhi, India-based contractor of back office services for various American and European industries, concedes that it’s hard to tell how things will break going forward. “We’ve seen both situations,” he said. “On one hand, companies are looking at outsourcing as a necessary way to provide greater flexibility for staffing, a better bottom line and improved productivity. On the other hand, marginalized mid-sized players who depend on a certain volume may not find (outsourcing) viable if they cannot reach that minimum volume level.” At this point, however, Malhotra’s organization, which employs more than 32,000 people worldwide, is in growth mode, providing financial and accounting services, research and analytics, human resources, technology consulting and customer relationship management to a number of business segments in the U.S. economy. Specific to healthcare, Salient’s services focus on data management, including claims processing and billing and coding for providutsourcing back office o “about 80 percent to 90 percent of the transactions requiring data involve normal processing, but it’s that other 10 percent that needs to be handled separately. it is this 10 percent that can make or break a company.” – Manoj Malhotra ers and payers. Contrary to popular perception about offshore contractors, Malhotra says his firm does not replace clients’ existing in-house staff, but instead augments processes already in place. “They can use their existing staff to offer front-end management and leave the back office management to us,” he said. Salient specializes in claims transactions – particularly those problematic denials that require a lot of painstaking legwork to resolve, Malhotra said. “About 80 percent to 90 percent of the transactions requiring data involves normal processing, but it’s that other 10 percent that needs to be handled separately,” he said. “It is this 10 percent that can make or break a company. We will typically work with each insurer and manage the status of each outstanding claim, making sure they get all the information they need. Using us for these functions frees our clients to spend their time more effectively, which is concentrating on patient care.” the ability to care for patients and achieve efficient operations,” he said. “They should also look at outsourcing if there is a strategic event, such as a merger, acquisition, turnaround or expansion.” Selecting the specific area to outsource comes down to strategy, Schwarz said. “We find that most hospitals want to put their money and resources towards improving IT capabilities to support their clinical operations, not on the back office administrative processes,” he said. “For many, it makes sense to outsource day-to-day hosting and management of the back office systems as a way to divide and conquer. Some pursue a best-of-breed strategy for both their software and their IT service provider or outsourcer, and some engage with a provider on a full IT outsourcing arrangement.” Payer PersPeCtive Health plans have been farming out claims functions for years and it makes sense for providers to do the same, said Siva Namasivayam, CEO of Hartford, Conn.-based SCIOinspire. Although the Siva company hasn’t yet added Namasivayam providers to its client base, there are plans to do so next year because Namasivayam sees it as a logical extension of the business. “If you look at the revenue cycle man- Considering outsourCing Marc Schwarz, senior vice president of Pleasanton, Calif.-based Oracle’s On Demand outsourcing services, says providers should review their operations to determine whether they can benefit from outsourcing. “The question hospitals should be asking is whether IT is enabling their primary mission of delivering quality healthcare, is it stuck in neutral or is it even impeding agement side, the business process of how a claim originates on the provider side and how it is paid by the payer, it is one long sequence in a chain, with coding on one side and decoding on the other,” he said. “The skill sets are similar.” But can (and should) one company handle both sides of the equation? Namasivayam is confident his firm could properly serve both sides as long as specifications are adequately laid out beforehand. For instance, because both sides are trying to optimize their economic interests, they may want the contractor to erect a “Chinese Wall,” a virtual or physical barrier that isolates workers on both ends to prevent conflict of interest situations. “They would preferably work in different facilities,” Namasivayam said. “The large players do this all the time.” Outsourcing firms contend that their services can ease the workload for healthcare clients, especially with regards to claims processing, which is subject to spikes in volume at certain times of the year. “There are periods in January and July when the volume goes up, so it might make sense for the client to farm out the minimum volume during the year with the intent of increasing that workload during the busy months,” Namasivayam said. Other functions commonly being outsourced are new technology development, which offers assistance on setting up new systems, and administrative services, which assumes management over new programs, such as Medicare Part B. Namasivayam recommends that in order for clients to get the most out of outsourcing, both parties have to establish expectations with each other. “You want to define what service and efficiency levels you expect and get a performance guarantee, like 90 percent of claims processed in 24 hours,” he said. ■ More at healthcareITnews.com e Connect: outsourciNg 1108 ● AmnesTy Continued from page 37 versions, shared software, multiple installations or expired licenses, they can purchase a license without penalty through the end of this year. “We don’t believe the clinician community is in the business of using Pirated soFtWare.” – Nancy Koenig Koenig and Justin Dearborn, Merge Healthcare’s CEO, said most clinicians using unlicensed software probably don’t even know they’re using it illegally. “We don’t believe that the clinician community is in the business of using pirated content,” Koenig said. “We value our eFilm customer base, and hope to convert all non-compliant users into authorized users of the current and most robust version to date,” added Dearborn. “This initiative supports clinicians, and ultimately the safety of patients, by helping to ensure safe and effective use of what we consider to be the world’s best stand-alone diagnostic imaging workstation.” ■ More at healthcareITnews.com e Connect: aMNesty 1108 J a n u a r y 11 –13 , 2 0 0 9 | H yat t r e g e n c y J a c k s o n v i l l e r i v e r f r o n t | J a c k s o n v i l l e , f l o r i d a you’re invited to the first major healthcare summit of 2009. 2009 will be an unprecedented year of change and opportunity in the healthcare marketplace—and it’s time to make the most of it at “Health it insight” featuring content from idc. Network with a national audience of payer and provider decision makers, hear research presentations and meet privately with top analysts, and evaluate transformational healthcare technologies from leading solution providers in boardroom case studies. Plan NOW to be there. www.healthitinsight.com Produced By official content Partner e ● Connect: PPM 1108 Payer and Provider it and Business executives: To apply for a complimentary invitation, contact Lisa Jones at 603-668-7144 or lisa.jones@ppmmedia.com it vendors: To present your healthcare solutions to this exclusive audience, contact Paul Samargedlis at 603-668-7141 or paul.samargedlis@ppmmedia.com ● Premier media Partner http://www.HealthcareITNews.com http://www.HealthcareITNews.com

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Healthcare IT News - November 2008 Contents $700M Strong PHR Power Stepping It Up Geo IT EMRs Go Rural HiMSS Insider: Making a Difference Home for the Blues Merge Amnesty Management Solutions: Outsourcing Appeal Clinical Toolkit: Enterprise PACS

Healthcare IT News - November 2008

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