HOW TO FINANCE AND IMPLEMENT THE CHANGES SWEEPING THE INDUSTRY
Medical practices are rushing to adopt new technologies, driven partly by changing government requirements. Many are grappling with common issues as this occurs. How can they integrate technologies feasibly and affordably? What are the best ways to finance these changes?
In this Q&A, City National Bank healthcare specialists Breck Fleming, Senior Vice President and Managing Director of Healthcare Banking, and Cynthia Reeves, Vice President of Healthcare Services, offer some answers.
Why should a medical practice invest in technology?
Fleming: Information technology has the potential to improve the quality, safety and efficiency of health care. Utilization of information technology in health care is generally low, but providers are becoming more receptive. Drivers of IT investment include the promise of quality and efficiency gains while barriers include the cost and complexity of IT implementation that often necessitates significant work process and cultural changes.
Certain characteristics of the healthcare market — including payment policies that reward volume rather than quality and a fragmented delivery system — can also pose barriers. However, given the potential benefits and efficiencies that information technology can bring, both the private and public sectors have engaged in numerous efforts to promote its use within healthcare settings.
The passage of the Affordable Care Act brings further financial incentives in the form of reimbursement and incentives to providers who invest in information technology (e.g., payment reimbursement software, Electronic Health Records (EHRs), and Physician Quality Reporting programs) and expanded efforts to standardize records formats and electronic communication protocols to enhance interoperability.
Reeves: Private insurance companies also increasingly expect medical practices to submit reimbursement requests electronically. Major laboratories are also operating digitally. In the future, electronic healthcare technology will be a requirement for doing business.
What kinds of information technology should healthcare providers invest in?
Fleming: It’s going to be different for every provider. Hospitals, medical practices and specialty providers are all likely to have differing needs and system capabilities. Each will likely benefit by engaging an IT consultant who specializes in health care and, therefore, can help them identify what makes sense for them. For example, a provider looking for a computer-based practice management system may want to look for the following features:
Customizable, easy-to-use dashboard — Each member of the practice should have a user interface with all the tools they need right at hand, but information should be protected with staff being able to do their jobs without exposing sensitive data and remaining HIPAA compliant.
- Scheduling tools — The ability to easily create, cancel and change appointments including e-mail and text confirmations that can save time and reduce cancelations.
- Business analytics — Real-time reporting tools are essential for practices to identify how efficiently they use their resources and areas where they can improve to maximize efficiency.
- Billing solutions — Ability to maximize revenue cycle management efficiencies from insurance verification to claim remittance that can result in improved collection outcomes.
- Support — The best software still needs human support. Find a practice management solution that offers real-time, live customer support.
Reeves: An investment in electronic healthcare technology can be significant, but it can also save a lot of money in the long run. It streamlines patient management, simplifies outcome reporting and makes it much easier to file for and receive reimbursements.
How can the healthcare community fund the new technologies needed to meet the required performance metrics, in the business and clinically, as set forth by Affordable Care Act?
Reeves: Term loans are a common option for healthcare technology financing. It’s important to work with a bank with solid experience funding clinical systems and equipment. Your banker should understand all of the issues involved, including equipment options.
Fleming: Leasing is an attractive alternative option in many cases. With leasing, you have the ability to finance up to 100% of acquisition cost including hardware and software as well as the cost of maintenance contracts and software upgrades.
What kind of experience should a lender have?
Fleming: Look for a bank that specializes in health care, so when it’s time to underwrite a loan, the bank knows how your medical practice functions and understands all the unique nuances of healthcare technology financing.
Reeves: City National Bank provides this kind of expertise through its Certified Healthcare Banker program. Our healthcare specialists go through rigorous training and must pass intensive oral and written exams. By the time they are done, our bankers thoroughly understand healthcare business models, whether for small practices or for big hospital chains.
What else should a healthcare provider look for in a bank?
Fleming: The bank should be able to address your personal needs as well. Let’s say you’re planning for retirement and need to think about estate planning, or you have a substantial investment portfolio and could benefit from active wealth management. You should have access to a network of specialists that covers you in every area. Look for a bank big enough to provide a complete range of services but small enough to provide personal attention.
City National Bank has strong experience serving the healthcare industry. No matter the size of your medical practice, we offer a range of financing, collection, payment and cash management solutions to meet your needs.Let us suggest new ways to help manage and grow your company.
Request that a City National Certified Healthcare Banker contact you.