6 Points to Consider About Your Hospital's Current Finance Software

Hospital finance software

What do you do when your hospital needs more functionality out of its finance software, but the acquisition of new technology is out of the range of your budget? It's a conundrum in which hospital CFOs and CIOs commonly find themselves.

In lieu of issuing bonds and raising the capital for a new IT purchase, the answer must be that additional value has to be eked out of the existing system. That means mapping, patching over and, in effect, jury-rigging together a functional system using legacy programs. But is that really a negative?

It doesn't have to be. The process of re-evaluating and integrating those systems can often lead to unexpected efficiencies. Often, approaching your hospital's data collection practices with a fresh set of eyes and adjusted priorities can help you to discover that you already had more to work with than you thought you did.

Your system could already be collecting data that is going unused or unanalyzed. New realities in the market could be making data that was heretofore unimportant now somewhat valuable. Making tweaks to your current systems and analytic capabilities can make collection and analysis much more efficient.

IT needs should be addressed before they hit crisis level.

Let's make an abstraction for a moment. Let's think of obsolescence as being represented by discrete units. Those units are sticky, and they are heavy. They're attracted to all things technological. From the moment a new system comes online, it is accumulating units of obsolescence. They attach to your system like barnacles to the underside of a ship. They induce drag. They weigh your system down. They make your organization lose headway.

The problem is that, in the name of short-term cost-savings, that drag and inefficiency is either overlooked or, as a result of natural organizational entropy, goes unnoticed until the whole system is creaking and teetering.

If you find yourself in the position of righting your hospital's IT ship after it has reached this point, you're admittedly in a difficult spot. If you haven't yet reached the crisis point, count your blessings and start working on your plan.

Ultimately, you should have a strategic timeline in mind. If you don't have the budget this fiscal year to purchase new tech, what is the drop-dead deadline for having new IT resources in place? Make a plan for how you will raise or reallocate the funds necessary to purchase it. And don’t forget to consider how much adapting and maintaining your current legacy systems will cost you in the meantime.

Don't base your capital needs on today's IT solutions. Base them on tomorrow's tech.

Your strategizing should include looking ahead at what technologies will be available on the market when your hospital is ready to make a new purchase. Too many CFOs make the mistake of failing to account for the natural evolution of health IT; they plan based on the systems they see on the market at the moment.

Remember our vision of units of obsolescence? They're not endemic to your hospital. They're out in the market environment at large. Thus, you should be keeping a weathered eye on the latest capabilities being developed by potential vendors. If you can, invest in development of your own. Get ahead of the IT depreciation curve.

6 Points to Consider When Cost-Evaluating Your Current Hospital Finance Software

So how do you get ahead of the depreciation curve? What are the best practices? Let's take a look at the steps hospital finance and health information technology experts recommend.

1. Consider your hospital's overall strategy and how your IT environment currently supports it.

Are you trying to grow patient share? Are you trying to increase profitability by increasing provider efficiency or by reducing unnecessary patient encounters and readmissions? Are you expanding or consolidating services? Is your system considering an acquisition of, or a merger with, another hospital?

Just as your EMR is the backbone of your hospital's clinical effectiveness, your hospital's finance software is the backbone of its profitability. See if there are ways to glean actionable patient insights out of your billing system or e ways to streamline the revenue cycle. Make sure that your systems aren’t creating any work duplication or unnecessary steps.

2. Consider the likelihood that your finance software will be up to the job over the next 5 years.

Begin by identifying the things your system does well now, what it does not do well now and what it won't likely do well in 3 to 5 years. Present-day and future gaps in capability should give you a good idea of whether or not you should be actively budgeting for an upgrade or whether stopgap measures could carry you through.

What systems do you and the CIO expect you'll be supporting within the next few years? If one of your current systems doesn't make the list, you can safely assume it's a legacy bit of IT and you should be planning to drop or replace it.

3. Figure out the current vs. projected cost to maintain your systems.

If a system is costing you more to maintain than the value it adds, it's already at the obsolescence crisis level and should be abandoned as soon as possible. That seems like common sense, but a surprising number of hospitals fall into the trap of maintaining such systems due either to lack of forward thinking or just plain old inertia.

If institutional inertia is the only reason you are paying to maintain a piece of software, you're going to have to put in the effort to change course. You'll probably get pushback from providers, clinical managers and business managers, but if you work closely with them to identify the core functions they will need going forward, you may find ways to either streamline the current tech and make it less expensive to maintain or develop a better picture of the new tech acquisition you need to budget for.

If a piece of software is expensive to maintain, but meets a business need you cannot otherwise meet, you'll need to fund it for now and allocate for its replacement. Make replacing it a priority in the next budget. If it doesn't meet a critical business need, cut it immediately.

4. Are your systems in danger of losing vendor support in the near future?

Don't let your hospital be caught unawares by a vendor's mothballing of a program. You need to work closely with your CIO and your vendors to track timetables. If your vendor plans to halt support for a system within the next 5 years, it's already crunch time for finding and funding a replacement.

5. Could upgrades to your current finance software be used to automate some functions?

If there is a way to develop an automation solution from a current piece of software, that could help you to pay for its maintenance until you can afford a replacement. Can you automate claims scrubbing? Are there ways to streamline utilization review? Can you reduce the amount of time your claims specialists spend on the phone by developing a patch that will allow your finance system to "talk" with payers' systems?

6. Are there risks inherent to continuing with a current system?

Many legacy systems are leaky. They're vulnerable to hacks or to cascade glitches. Now that Meaningful Use is such a hot healthcare reform topic, hospitals are coming under increased pressure to develop ways for their systems to communicate with those of other healthcare organizations. And, in most cases, the software hospitals are using right now wasn't developed with secure interoperability top of mind.

If patient information or hospital data is put at risk by a legacy system, it needs to go. If you think you can coax more function out of it, make sure that you do so with a keen eye toward maintaining data safety.

The secret to getting more out of your hospital's finance software (or clinical IT) is to stay ahead of needs.

Make sure that you and your CIO are continuously evaluating and re-evaluating the cost of maintaining vs. the cost of replacing. Always remember that patient data security is of paramount importance. IT depreciation and software obsolescence are unavoidable. Bear that in mind, and streamline each element of your systems as you continue to plan ahead.

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