In Part 2 we focus on how BHS implemented an information management system, overcame financial challenges, and established performance review
processes.

Tracker: "What were the first major financial challenges you faced when BHS became independent?"

Hymes: "Cash flow. We did not purchase the accounts receivable from the parent organization, so there was no cash flowing in during the early weeks. We needed to get a billing department up and running ASAP. Workers’ compensation bills went out bi-weekly and the screening services had to wait for a monthly invoice, as the market demanded. We had secured a line of credit and drew on it immediately. (Our line of credit was based on the proforma developed at the time of sale.)"

Tracker: "What initial strategies did you implement to deal with these challenges?"

Hymes: "To ease cash flow we phased in the acquisition of two clinics in the first month and one each month after that for three months. Because we pay our physicians monthly, we didn’t face huge payroll pressure in the first few weeks, but the pressure caught up to us quickly. We set up coding, data entry, and billing centrally, thereby reducing the variation in coding and charge entry. Paperwork had to pass from the sites to central billing, so we asked our radiology courier to pick up and drop off the files."

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Tracker: "What strategies did you later implement to improve the processes?"

Hymes: "Since our latest software upgrade to SYSTOC 7.1, the charge entry for employer-requested services (ERS) has been entered at the clinics. Workers’ compensation coding and charge entry are scheduled to begin January, 2003 at the sites. This arrangement will reduce the time between visit and billing (we bill WC charges weekly), as well as decrease the cost of copying, faxing, and sorting necessary to support a labor-intensive paper system. In addition, we have streamlined the paper processes, are looking at the e-billing features of SYSTOC, have published a payment policy for our customers, and have established bill collection steps."

Tracker: "Did you have difficulty accessing the financial market for funding?"

Hymes: "No. We had the financial backing of our parent medical group to assist us."

Tracker: "Were most of these strategies successful?"

Hymes: "I believe they were. We have not lost any customers due to the change. We retained our relationship with all our venders. We did not exceed the recommended line of credit stipulated in the proforma. We lost very few employees, and those who did leave, left for higher wages in a tight labor market."

Tracker: "Would you be willing to share how long it took to become profitable?"

Hymes: "It was our thirteenth month of operation when we became profitable on a cash basis. We had some earlier months that were profitable on an accrual basis."

Tracker: "Over what time frame did you implement SYSTOC software at all sites?"

Hymes: "We implemented SYSTOC over a four- month phase in, then took another six months to stabilize it as a working database. This forced us to quantify our processes, redesign our forms, and establish the company (client) protocols. Also, we had to plan on doing regular database cleanup."

Tracker: "What, if anything, might have prepared you better to deal with these challenges?"

Hymes: "It took a while for us to develop and implement financial reports that provided both our operations and finance staff with the necessary data to make sound decisions. We customized the setup of SYSTOC at each individual clinic. It took us a while to develop company profiles, tasks, and procedures that fit each facility. I would recommend spending as much time as possible in the setup mode. We didn’t have a lot of time between the negotiation of the practice and the time the hospital wanted to move the business. So we subsequently had to spend a lot of time revising until we got profiles, etc., to fit our needs."

Tracker: "How long did it take to get the billing and financial information entered and then create the reports necessary to assist you in managing the network?"

Hymes: "It was four to six months before we felt we were getting the charges entered and bills out properly. The financial data took the longest time to coordinate. The reports from the earlier version of SYSTOC were no longer adequate; so some SYSTOC reports had to be customized to fit our finance team’s new expectations."

Tracker: "Were your customers supportive during the change? Did you have to allocate additional hours to customer service?"

Hymes: "Our customers were not significantly affected by the change. We kept them informed regarding new billing address, federal ID number, and payment policy. Our sales team (five people plus a director) has always provided the full range of customer services, which includes troubleshooting any billing problems. This included left over invoice problems with hospital billing from before the purchase. We did and continue to act as a liaison between our customers and the hospital for ER and ancillary services and the billing thereof."

Tracker: "What issues did you face with centralized billing? Were the charges entered at the clinic or sent to central billing? Did you attach medical records to the bills?"

Hymes: "The biggest issue was paper flow in the manual system we used early in the life of BHS. Now, we are entering the data and charges at the service site. The physicians dictate their patient visit notes, our transcription service provides fast turnaround, and, through an interface, transcription is imported directly into the SYSTOC injury file. This arrangement speeds access to the record. For example, if a call comes into billing regarding documentation, the biller does not have to call the clinic for the report, but can look it up in the patient/injury file. If a carrier needs a copy of the chart, then the biller can print it from the file, send, and not interrupt the busy clinic staff. Central coding and billing provide consistency in coding levels and control over the integrity of the data entry. We have also instituted education and feedback systems to decentralize the coding and charge entry.

"Central billing also enables us to begin the e-billing process with SYSTOC and a clearinghouse. This will reduce our costs of preparing and submitting a claim and reduce the insurance carrier costs of handling a paper claim. We are planning on beginning this process in late January."

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Tracker: "Did the SYSTOC reports provide you the information needed to keep abreast of the financial conditions at BHS?"

Hymes: "The SYSTOC 7.0 library of standard reports was adequate, and in version 7.1, the library was expanded. However, the longer you work with the software, the more detailed your data needs become and the more the report capability has to keep up. We find we must use not only the standard versions, but also customized versions."

Tracker: "Do you have recommendations for other administrators of reports that you find particularly helpful?"

Hymes: "Patient Stats Scheduling, Revenue Trends, Referral Count, and Aged Accounts Receivable. We also have customized reports: EM Analysis, Referral Comparison Report (tracks encounter activity by patient type and employer over time), and Comprehensive Summary, as well as some reports used in case management."

Tracker: "Did the change in the information system affect the medical review of care regarding outcomes data by provider or injury? Have you used this information in your performance improvement program?"

Hymes: "The change in the information system helps us track outcomes data as well as the details of the day-to-day business, e.g., return rates, referral information, and activity reports by employer. Our organization performance improvement initiatives have and will continue to use these data."

Dr. Dupuy: "We had a difficult time getting useful data when we were using the hospital’s information system. For BHS, changing to SYSTOC has allowed us to generate a number of useful reports that assist the providers in delivering consistent quality care. We are able to track provider-specific performance by looking at statistics such as the number of patients per hour, per day revisit rate, and referral rates. We can compare performance, including financial analysis, across our different sites. And we do use this information in our quality assurance plan."

Tracker: "What has been the reaction of the medical staff to the outcomes information?"

Hymes: "The medical staff has more data than ever in looking at their individual sites and the company as a whole."

Dr. Dupuy: "The medical staff has reacted favorably to the availability of outcomes data. We have not experienced concerns regarding the comparative review of that data at our monthly meetings. Our physicians are very excited about our efforts in outcomes management, and our goal is to expand these efforts this year. We hope to look at statistics such as average cost/utilization per case by diagnostic group and compare our performance to regional/national benchmarks."

Tracker: "Have you used the SYSTOC information to review productivity and costs at the various clinics?"

Hymes: "We have used it to review productivity and costs with other finance data and physician scheduling information. We can look at costs per patient for supplies, payroll, providers, radiology, and physical therapy. We can also review the provider’s documentation based on an Evaluation and Management analysis."

Dr. Dupuy: "We are using SYSTOC to track provider productivity in a number of ways. We are generating reports that allow us to compare number of patients/hour, total number of patients seen, revenue generated, revisit rates, and physical therapy utilization rates."

Tracker: "Thank you both for taking the time to share your experiences with our readers. Your insights will be valuable to those contemplating a similar move, or focusing on making improvements within their current structure."

Summary

Business Health Services has successfully transitioned from being hospital-based to being an independent network of clinics. It has achieved this through extensive planning, strong leadership, a proactive staff, and a comprehensive information system (SYSTOC) that has been carefully set up and utilized.