Capital Expenditure-Electronic Medical Records Part 1

Capital Expenditure-Electronic Medical Records Part 1

“A capital expenditure is a commitment of resources that is expected to provide benefits during a reasonably long period, at least two or more years” (Cleverley & Cameron, 2007, p. 397). Torrington Health and Rehabilitation Center a skilled nursing facility in Connecticut has determined that a capital expenditure of the implementation of electronic medical records (EMR) for the coming year is of importance. The cost of the undertaking will be approximately $200,000. This will include the software, hardware, labor, training, and service costs. The following paper will discuss how the purchase of electronic medical record software and hardware will support management and organizational goals based on need, and how the economic environment of the organization will improve over time.

Management Goals

Productivity

One of the goals of the management team at Torrington Health and Rehabilitation Center is that of productivity. As the facility becomes more automated through the use of the EMR system tasks such as filing and pulling physicians orders for renewal and documentation redundancies on multiple forms will no longer be labor intensive. Gathering data for chart audits to determine code status, new physician orders, and completion and accuracy of assessments can all be done with ease. The management team would also like to implement the technology with an interface to the business office. Billing and reimbursement can improve and stream line compliance with skilled nursing facility regulations such as the minimum data set, and Medicare, and Medicaid. The time needed to gather data for additional documentation requests from Medicare and Medicaid will also be reduced.

Efficiency

Productivity is just the starting point with an increase in staff retention and satisfaction. The efficiency in which documentation can be retrieved and documented with little to no errors is important in health care. Physicians will have access to data such as current medications, diagnosis, lab values, allergies, and nursing documentation. The multi-disciplinary team will have access to physician orders timely to stream line patient care. EMRs can ensure the patient’s records are legible, complete, and organized.

Revenue

An increase in revenue will be seen with the ability to have improved insurance reimbursement. Management’s goal to integrate billing with the medical record will assist in the accuracy of diagnosis codes and treatment plans such as: physical, occupational, or speech therapies. The process of an integrated system in relation to patient billing will also decrease the amount of time it takes to process claims. Improved clinical documentation by nurses, nursing assistants, therapists, physicians and other clinicians will assist in supporting appropriate billing. Another possibility for revenue is the reduction of paper charting. The storage space that would typically be used for closed records, over flow of current records, medication delivery slips, investigations, wound statistics, etc. would be cut in half or be totally eliminated, possibly making room for a patient care area or storage for other items currently stored in an off-site location. Organizations that provide quality care can often re-negotiate service contracts with health plans and increase revenue as well.

Quality Assurance

“One of the most important factors in any business but especially health care is the perceived quality of the firm’s product and service” (Cleverley & Cameron, 2007, p. 104). Cleverley & Cameron (2007) mention quality assurance in relation to revenue, but quality assurance in relation to patient care can be improved using the EMR system. Data can easily be accessed from the system and reports generated for patients who have fallen, have frequent pain, are currently experiencing a urinary tract infection or have shown a decline in activities of daily living. These reports can be used to compare historical trends within the facility, the state, and the industry. The reports also can be used by the clinical staff to improve infection control procedures, increase fall prevention plans and address a patient’s pain more efficiently. The reports generated from the EMR system can provide nursing management an opportunity to review documentation for accuracy and follow through by the registered nurse, licensed practical nurse, and the nursing assistants. This information can be then forwarded to the appropriate person to ensure quality patient care.

Economic Environment

“Independent research and user experience suggest that the use of EMR systems can help organizations save money and can be used as sources of new revenue” (Renner, 1996, para. 7). The economic environment of Torrington Health and Rehabilitation Center will certainly improve once the transition has taken place. The financial benefits to implement the EMR system is a reduction in labor costs in the medical records department, for personnel involved in coding, billing or manually retrieving lab results, the nursing department in the transcription of hand-written physician orders and redundant documentation. The system will be integrated with the business office and the billing and coding department. The automated system will ensure that the process links clinical information to financial information and lost charges can be reduced substantially with improved documentation. The length of time accounts receivables are outstanding will decrease increasing revenue monthly or quarterly. Storage and supply costs will decrease with the use of the EMR. Storage costs can be eliminated or decreased because of the amount of paper a health care facility must keep. Supplies such as paper, folders, filing cabinets, dividers, and storage boxes will decrease. Another factor to consider is the cost of an outside vendor to shred sensitive information. With the use of the EMR the paper needing to be shred will decrease and so will the cost.

A decrease in the amount of funds necessary for labor is a large benefit to the Center. An improvement for the economic environment also can be seen in the reduction of repeated lab tests, such as x-rays, ultrasounds, and blood draws because of a misplaced document. The physician’s access to the complete clinical record will ensure medication orders are complete and covered by the patients insurance. Many times the facility has been responsible to pay the pharmacy charges for non-covered medication or medications ordered too soon. Having access to pertinent data will decrease pharmacy charges. With the reduction in labor needed to perform all the above duties the staff will spend more productive time with the patients.

Organizational Goals

Patient Care

Torrington health and Rehabilitation Center is owned and operated by Spectrum Care Inc. The philosophy of Spectrum is “people helping people.” “Our employees have taken our special pledge that focuses on delivering high quality customer service with compassion and respect” (Spectrum Care, n.d.). Implementing the EMR system will enhance the quality of patient care by: improved quality patient records, better access to the patient record and improved documentation for patient care and preventative services.

All documentation in the record will be complete and legible. If an EMR system is chosen that will automatically flag reminders to physicians and other clinical staff the quality of the patient record will ensure quality care. Patient safety will increase by the reduction of medication errors, tracking of necessary daily or monthly assessments, and monitoring of clinical outcomes. The majority of patients at the Center are in need of daily care and approximately seven medications per day. The EMR system will ensure that medications are used appropriately that any new medication orders are reviewed for potential drug therapy risks and drug-to drug allergic reactions. The physician will be notified immediately and avoid a poor outcome and a delay in treatment.

Cost Containment

“According to Bill Caldwell, chief executive officer of American HealthTech, EMRs are top-of-mind for executives in long-term care as the national debate over healthcare reform accelerates the need for quality, efficiency, and cost containment” (Reuters, 2009). Cost containment can be and will be seen with coordinated care, a reduction in administrative costs and standardization of the medical record.

The organizations goal in containing costs is to prevent that probability that costs will occur. This can be done by hiring proficient staff and to educate them with appropriate materials to ensure consistently high levels of performance. With the use of the EMR system staff both clinical and non-clinical will be trained in its use. Accurate documentation, better patient care and a reduction in overtime will ensure prevention of poor patient outcomes and a more efficient billing system.

Torrington Health and Rehabilitation Center has detected an inefficient practice related to the medical record. Areas of concern are the location of needed documents, inadequate documentation, missing documentation, inappropriate diagnosis codes and failure to follow through on necessary patient care needs. All of these concerns increase cost and unnecessary treatments or inefficient treatment of the patient. The initial cost of the system will be large for the organization and the effects may not be seen for quite some time. The organizations goal is to improve patient care by reducing the cost of labor and increasing productivity. Decreasing the need for costly medications and unnecessary medications will help in cost containment and better patient outcomes.

Leadership Role

Implementing the EMR system will be a very involved process. The costs that the organization must consider are the need for temporary staff to enter patient information into a newly installed system and productivity may decrease as clinical and non-clinical staff becomes familiar with the system. In long-term care the use of pen and paper has dominated the documentation process, a change agent will be needed to plan and manage the culture change. Employee buy in will be difficult unless he or she are part of that change. Developing a leadership role or enhancing a leadership role to assist in the education and implementation of the system will assist the Centers transition.

The leader or leaders can assist the organization in conducting a work flow assessment. He or she can determine where or what the needs are for the physicians, nurses, nursing assistants, and the administrative staff. The leader will be trained by the software organization in the use of the system and then set up an educational site for the facilities users. In the leadership roles he or she will then designate who will become super users. The super users should be the administrator, the Director of Nursing and the business office manager.

Needs of the Organization

Presently Torrington Health and Rehabilitation Center is using paper and pen to document patient needs, medication orders, patient conditions, and current diagnosis. The physicians are hand writing orders, history and physicals, and any progress notes necessary. The nurses are accountable for weekly and monthly assessments, intake and output, pain assessments, skin assessments, dehydration assessments, and bowel and bladder patterns. The nurses are also responsible to update care plans and complete a state mandated document if an accident or an incident occurs in a timely manner. The time involved in completing daily redundant documentation causes the nursing staff to remain past their shift, which in turn increases labor costs and decreases positive patient outcomes. Nursing management has conducted random audits to ensure that the documentation is complete and accurate that the physician’s orders were transcribed timely and the medication order. The audits determined that not all documentation was complete or accurate and that several of the physician’s orders were not transcribed timely delaying patient care. During the audits it was also determined that the medical record was not complete. Labs, diagnostic tests, and consultations were not filed or missed filed making health care decisions in accurate or not at all.

The purchase, installation and implementation of the EMR system will relate to the organizations goals of improved patient care, cost containment, and leadership and accountability. The benefits associated with the purchase in line with the organizations goals are: complete, accurate, legible medical records, continuity of care, a decrease in medication errors and timely diagnosis and treatment of a patient’s condition. The nurses will spend less time documenting and provide patient care timely and efficiently decreasing the risk of falls, infections, and improving accurate assessments. Containment of costs will not be seen immediately but will slowly improve over time as the facility takes advantage of the entire EMR system. Less of the budget will be spent on labor, supplies, storage space, and medical records personal and incomplete documentation. With the improvement of documentation and accurate diagnostic and therapy coding a more efficient billing system will occur. Accountability and leadership will be on the rise as more of the staff accept and understand the change and assist in the implementation of the change. Staff retention and satisfaction will also increase causing a reduction in the cost of orientation.

Justification

The justification for the capital expenditure of the EMR system is improved clinical needs, business needs, and administrative needs. Information management improves patient care, productivity, efficiency, revenue, and assists in quality assurance. Torrington Health and Rehabilitation Center has identified a decrease in productivity, efficiency, and revenue and quality assurance due to the miss handling of the medical record. Cost containment has not been effectively managed due to an increase in labor, pharmacy and laboratory costs and lack of proper documentation to support patient care needs.

Purchasing and maintaining the EMR provides all users access to the information timely, provides for the physician a list of current diagnosis and clinical concerns, medications, allergies and the ability to document quickly and efficiently. Telephone orders previously taken and the need to be signed will be done timely, history and physicals will be completed timely ensuring compliance of regulatory guidelines. All nursing assessments, care plans and new physician orders will be completed accurately and timely based on regulatory guidelines. Redundant documentation will no longer be needed as the system will integrate all the necessary information in real time.

The implementation of the EMR system will decrease the amount of time necessary to file, store, and maintain the paper clinical record. Storage space off site can be eliminated or used for something else. A decrease in costs for office supplies necessary to maintain a paper clinical record as well as filing cabinets will assist in cost containment and increase revenue. The integration of the clinical and business record will increase accuracy and timely billing with a decrease in rejections or denials because of the lack of documentation.

The ultimate goal for management and the organization is positive patient outcomes, less errors, and an increase in productivity. The system also can be used by nursing management to increase quality of care based on historical data. Comparisons can assist in policy and procedure changes improving the overall imagine of the facility and the organization itself.

Conclusion

The initial cost of the EMR system is approximately $50,000. Torrington Health and Rehabilitation Center a long-term care facility owned and operated by Spectrum Care proposes to the corporate office a capital expenditure for the EMR system. The facility has identified the need to streamline information through easy accessibility and the electronic medical record can do just that. The system will improve patient care, increase productivity, efficiency, and assist in quality assurance. With the decrease in redundant documentation patient satisfaction will increase and retention of staff will improve. Staff will become more accountable and feel the need to lead in the transition. Efficiency and accuracy leads to an increase in revenue through cost containment and quality patient care.

References

Cleverley, W. O., & Cameron, A. E. (2007). Essentials of health care finance (6th ed.).

Sudbury, MA: Jones and Bartlett.

Renner, K. (1996). Cost-justifying electronic medical records. Healthcare Financial

Management: Journal Of The Healthcare Financial Management Association, 50(10), 63. Retrieved from MEDLINE with Full Text database.

Reuters.(2009).American health tech and vovollect healthcare systems announce an

alliance to deliver unified electronic medical records.Retrieved from

Spectrum Care.(n.d.).Welcome to spectrum care.Retrieved from