How to choose capitation software that works for you
Systems are an investment in future productivity
If you’ve ever delivered newspapers, you might remember pondering when the best time would be to buy a new bike. If your delivery route was growing, you knew that soon you could use better baskets, more gears, a more comfortable seat.
A farmer may set aside some of his earnings to buy a better tractor after a good harvest. A printer may search for a faster copier. Regardless of the occupation, the economic maxim of saving some profits to invest in future business viability remains fundamental. Yet it is sometimes overlooked in a business climate too anxious for short-term gains.
Doctors, too, are well-advised to reserve some of their economic success so they can invest in their future successes, says Pamela Waymack, an independent computer consultant who specializes in physician practice systems. In capitation, this means investing in the tools for innovation — both software and staff who know how to make creative use of new and emerging technologies, recommends Waymack, managing director of Phoenix Services Managed Care Consulting in Evanston, IL.
Fortunately, your options for doing this are growing. A few years ago, your software choices were limited to the five or so that existed on the market, or you wrote your own program. Most of those systems were better suited for insurers than physicians. Now the market has expanded, offering some 40 systems for physicians involved in capitation.
If your practice is ready for capitation software support or if you need to expand upon what you already have, Waymack has useful strategies both for getting started and for the actual process of selection. To begin with, she recommends taking these two key steps:
• Define your needs. It’s easy to get overwhelmed quickly when you begin studying new capitation systems. Before vendors tell you what you need, make sure you have your own idea of what you need and build from there. Here are some key questions to start with:
— Are you dealing with capitation yet? If not, what data would be useful to help you prepare to bid for a contract? If you already participate in a capitation contract, does your practice only accept capitation payments, or are you performing other cap-related functions such as referring patients to other providers?
— Are you billing employers directly for services?
— Are your stop-loss limits easily accessible?
— Can your system make payment comparisons to fee-for-service payments? "You need to know if you’re making 20% more than Medi care pays, or equal to Medicare, or 120% below Medicare," Waymack points out. "Systems are now available to automate that process for you."
• Determine your limitations. For example, you typically want to stick with software and hardware that fit with your existing equipment. In addition to your functional limits, you’ll need to establish budget limits as well. Physicians often err on the side of being too conservative in this area, Waymack says. For instance, banking companies typically reinvest 5% of earnings into information systems. Physicians would do well to invest at least 3%, she suggests. That would include both equipment and personnel to optimize its use.
Consider using remote data centers’
If you get this far and decide it’s getting to be too much, consider outsourcing part or even all of your information system needs. You’re probably familiar with using insurers as third-party administrators to do administrative work, but another option is becoming increasingly popular: "remote data centers." This is a vendor who assumes nearly all the practice’s information management needs and provides on-line access to all your data from your desktop, Waymack says. This leaves most of the hardware, software, and staff training investment and maintenance to the vendor. The practice administrators then tap into the information as they need to.
Also, administrators often use their own in-office decision support software — which relies on all the other data linking up to it — for strategic planning, reporting on trends, and all sorts of overview functions. (See related story on software and programs beyond core capitation, p. 109.) This allows administrators and physicians to stick more to planning and positioning rather than attending to daily operations, although they have ready access to any daily operations information they need.
Whether you are opting to purchase and/or upgrade your systems or to evaluate potential vendors to function as remote data centers, here are three facts of life you need to know to cut through the vendor rhetoric and identify your key success factors:
• All information systems automate routine tasks. You need to know answers to these questions: How quickly can data be manually entered into the system? What level of data checking does the system do to ensure accuracy? Does the system accommodate electronic billing? If claims can be received electronically, what percentage can be automatically adjudicated without someone needing to intervene? (The higher this percentage, the lower the level of staffing you will need in your back office.) You need to know not only how quickly these functions can occur, but perhaps even more important, what kind of staff support you’ll need in your office to back up these systems.
• All systems come with standard reports. The trick is to figure out which reports you need and what it takes to modify them for your practice’s specific purposes. Ask these questions: Are the standard reports developed in a way that meets your needs, or do you need to customize them by using some sort of editing tool? How easy is that tool for you or your staff to use? If the tool requires you to export data, what process is involved in that? A good example would be a system that could readily report how you’re performing financially compared to Medicare’s resource-based relative value system and conversion factor payment levels.
• All systems will lack particular features you want as standard options. There will always be features you need that don’t come standard. No one vendor will have it all. A key here is knowing how well the product you’re considering is designed to hook up with other outside parties. Look at the areas in which your preferred vendor has developed relationships. Maybe the system you like does not do credentialing, but the vendor has a good relationship with others who do. Or, they may have good relationships with a system that does claims code unbundling. Keep in mind the value your practice places on some of these beyond-the-basic applications before you make decisions.
Numerous articles on information systems for capitation as well as other health information systems, written by Pamela Waymack, are accessible on her firm’s Web page, Phoenix Services Managed Care Consulting, at www.boundary.net.
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