Health care revenue cycle management (RCM) refers to processes that affect cash flow, such as creating, submitting, analyzing, and ultimately paying for patient medical bills. Revenue cycle management issues cost hospitals between 4% and 5% of gross revenues per year. Another 13% of a hospital’s yearly lost revenue is caused by billing errors, insurance underpayments, denials, and bad debt.
-- Cap Gemini Ernst & Young
Of the 5+ billion health care claims submitted each year in the U.S., more than 25% are still submitted on paper and processed manually.
Healthcare Revenue Cycle Management and IT
The RCM Challenges
While healthcare organizations are focused on quality care and patient safety, tremendous cost pressures make revenue cycle management (RCM) a front-and-center issue. With approximately 25% of US hospitals operating on negative margins, a hard look at RCM processes and workflows is imperative.
RCM Requires IT
IT must improve efficiency and streamline processes to better manage cash flow and increase revenue. From patient registration and scheduling to billing and collections, seamless access to integrated data across departments speeds operations and simplifies error-prone tasks, such as coinciding services with medical codes to generate “clean” bills and insurance claims.
Healthcare organizations that master RCM through IT are also well-positioned to comply with evolving transparency laws and deliver higher quality care. As stated by PricewaterhouseCoopers, “technology enables organizations to fully realize a hospital’s latent potential for delivering higher quality care in increasingly efficient ways through the use of information technology and process redesign.”
High-performing IT Requires Vityl Capacity Management
A study by PricewaterhouseCoopers concludes that higher investments in IT improve hospital business performance. However, you can’t just throw money at hardware and expect returns. Higher investments in IT require careful, deliberate planning, so as not to impose new burdens and complexities instead of alleviating them.
Vityl provides top-tier performance and capacity management software for right-sizing and optimizing infrastructure to support efficient RCM workflow across the enterprise. The objective, accurate data Vityl Capacity Management provides is extremely valuable for determining the right amount of capacity to purchase and the right configurations to use to get the most from your IT investment.
Businesses need to be able to be more nimble and react more quickly, and CIOs will be looking for technologies that allow IT to do that.
-- Andrew Bartels, Forrester Research
Agility is not just about responding to change efficiently and with speed -- it is also about sensing that change. -- “Achieving Agility: The Data Center Is the Foundation” by Gartner
If they’re going to survive, in-house IT groups and the vendors and consultants they work with are going to have to focus primarily on agility and delivering the responsiveness that their business users value.
-- “Opinion: The Agility Factor,” Michael H. Hugos
Healthcare and IT Agility
Health organizations want -- and need -- agile IT that keeps pace with the increasing rate of change in the healthcare environment.
In fact, Gartner predicts agility elements will become measured critical success factors for the majority of large data centers by 2010.
Why is agility so critical to healthcare IT? Consumerism and government regulations are evolving. Globalization and “medical tourism” are growing. Business models are changing. This new competitive environment has healthcare CIOs responding to market drivers and focusing on consumer needs and expectations.
Agility Requires IT
A report by Gartner says “enterprises that attempt to define and improve agility without clearly understanding IT’s role will fail to exploit IT’s transformational ability to engineer and measure the steps necessary to develop agility.”
In other words, IT agility is a prerequisite to business agility. And healthcare IT organizations that approach change and agility proactively achieve better competitive position and contribute greater value to the business.
Agile IT Requires Vityl Capacity Management
Vityl provides top-tier performance and capacity management solutions that increase IT agility and allow healthcare organizations to respond to marketplace dynamics.Gartner identifies four key enablers of agility: awareness, flexibility, adaptability, and productivity.
Vityl supports these enablers of agility, providing performance monitoring, management and capacity planning solutions that allow IT to plan for expected change and adapt to unexpected change while optimizing the existing infrastructure.
Vityl provides prediction and planning capabilities that help stabilize service delivery, reduce risks and enhance performance in a fast-changing marketplace. This proactive approach increases the agility of IT to meet service, patient safety and revenue cycle management demands while controlling IT operating cost.
Higher investment in IT improves hospital business performance -- “The Economics of IT & Hospital Performance,” PricewaterhouseCoopers, LLP
Vityl Capacity Management is integral to the Scott & White capacity planning strategy and supplies the modeling structure. For our architecture, that means ensuring that IT requirements are met 100 percent of the time. -- Scott & White Hospital and Clinic
Capacity planning is the key to maintaining or improving IT service quality while containing costs. -- “The Capacity Planning Software Market,” Forrester
Healthcare and IT Capacity Planning
The speed at which healthcare IT is growing is mind-boggling. The rising urgency to respond to market drivers, such as consumer-directed healthcare, EMR (the need for transparency and information exchange), changing business models, and government regulations, has quickened the pace of IT response.
Likewise, IT plays an important role in the very real need to improve patient safety, operating efficiencies, productivity, and costs, which directly impacts business performance.
These mounting pressures have CDOs allocating greater portions of their operating budgets to IT infrastructure. As IT investment grows, so grows the scrutiny on IT performance.
Healthcare IT Needs Capacity Planning
As IT infrastructure expands to support new and evolving business needs, careful and deliberate planning is critical. Unattended, IT can become a morass of complex, disparate technologies that fall short of expectations and lead to wasteful spending.
Using capacity planning strategies, healthcare IT organizations stabilize service delivery, reduce risks, and enhance business performance.
Capacity planning offers a methodical, objective process of determining the IT resources necessary to support changing business requirements.
Vityl Provides Tier One Capacity Planning Software
Vityl capacity planning software helps IT organizations accurately predict the impact of changing business practices and events on the IT infrastructure.
Using Vityl Capacity Management, IT organizations more accurately plan and provision resources needed to support the business. This objective analysis provides the foundation for a sound, persuasive business case for proposed IT solutions. The ability to forecast demand, predict performance, and optimize the use of existing infrastructure translates into greater efficiencies, improved patient safety, reduced risk, and increased ROI.
An under managed CDO application and system environment contributes to IT complexity, an increased risk of operational errors, the inability to optimize system performance, poor ability to respond to necessary changes, increased administration costs, architectural exception handling, compromised system availability and can lead to an increased risk to patient care and safety. — Gartner Research, IT: G00149121, June 22, 2007
What If You Could...
- Reduce IT capital & operational costs?
- Optimize your IT configuration?
- Cost-justify virtualization value using empirical data?
- Manage your virtualized environment with one tool?
- Control virtual machine sprawl?
- Eliminate unplanned outages?
- Dynamically allocate system resources?
- Model IT capacity needs?
- Identify the right applications for virtualization?
Healthcare and Server Virtualization
Healthcare organizations continue to be pressured to minimalize IT cost and leverage existing IT investments. As a result, hospitals and other care delivery organizations (CDO) are moving away from traditional IT environments to more efficient, virtualized, “on demand” architectures that better utilize the full capacity of existing servers. Unfortunately, unless the transition and resulting configuration are carefully and continuously planned, tested, and managed throughout the application life cycle, there is no guarantee that the IT organization will realize any advantage. In fact, they will significantly increase risk.
Traditionally, CDO’s would purchase a new server and only run one application on it — creating a one-to-one relationship. This approach created problems of server sprawl:
- physical space limitations
- increased IT overhead
- personnel to manage them
- energy to run and cool them
In addition, as computing capabilities have improved, CDOs have discovered that these “one-to-one” servers are being underutilized at rates as low as 10% to 20% of total computing capability, resulting in untapped, excess capacity and wasted money.
Virtualization Requires Planning & Testing
In a virtualized environment, each host runs many applications that support multiple business processes. This increases complexity and creates reliance on fewer, more mission-critical hosts. This in turn introduces many, new — potentially catastrophic — points of failure and substantially elongates recovery time should problems occur. Without adequate virtualization planning and testing, should a host go down or become incapacitated, the impact to business is immediate and considerable. Compromised system availability affects many business-critical applications, functions and people and what’s worse, impacts the CDO’s ability to provide patient care.
Learn how to start a capacity management practice at your IT health organization and learn how Vityl Capacity Management can help.