IT in Managed Care Organizations
Introduction
The most important function of information technology (IT) in managed care organizations (MCO) is to support their business. MCOs are complex in nature, offering a wide range of services to a wide range of individuals. It is vital for management to align its IT department with the operational dynamics of the organization. In this situation, it is important fo an IT department to align its goals to managed the complexity of MCO. A MCO should reduce risk if they have a well-function IT department. Thus, the IT department main concern is designing, implementing, and operating an efficient system that will help run the MCO. The following discusses the IT department’s role in managed care organizations.
Information Technology (IT) Department
According to the National Library of Medicine, managed care organizations “intended to reduce unnecessary health care costs through a variety of mechanisms, including: economic incentives for physicians and patients less costly forms of care” (Lebeaux, 2009). With the increased cost of technology and implementation in the healthcare profession, having a proper IT department may decreased costs associated with operating a healthcare organization.
The IT department in the MCO will consist of technology and the personnel needed in order to operate that technology. These employees will be responsible for updating and implementing the electronic health records (EHR). The main aspect of EHR’s is that it allows healthcare professionals to access medical records virtually anywhere. This software will be specifically designed for the organization at hand. The top responsible for the IT department is to insure all software and systems are in accordance to the Health Insurance Portability and Accountability Act (HIPAA).
Technology needed. The technology needed for the MCO to operate fully are electronic health records (EHR). There are two different ways to developed EHRs: insourcing and outsourcing. While these two aspects are discussed at a later point, the main difference is insourcing owns and operates their own EHR, while outsourcing involves using a third party for their EHR needs. Communication equipment, computers, and servers are all needed as well.
Function
Managed care organizations (MCO) combined all the functions of the healthcare field: delivery of care, health insurance, and administrations. Thus, it is important they have an IT department and software able to handle all of the organizations need. The function of the IT department will be to monitor and update the EHR. The IT department also needs to create solutions when IT problems arise with the system. On top of those two functions, the IT department needs to make sure all aspects of the EHR and the information that is contained in the electronic system is compliant to the Health Insurance Portability and Accountability Act (HIPAA).
The IT department will handle: 1) any technological problems with the system, 2) any needed updates to the system, and 3) any security issues that may violate HIPAA. On top of these three elements, the IT department will be responsible for making sure that all aspects of EHR program are compliant to the Health Insurance Portability and Accountability Act (HIPAA). Since EHR’s contain private, sensitive information, it is important that the IT department’s main focus is on being complaint to HIPAA.
Critical elements
The critical elements for MCO is having an IT department that is able to handle the complexity of the organization. MCO offer a range of health services. Due to this, MCOs have more patients with a variety of health concerns. Implementing an EHR system makes it easier for MCOs to handle their day to day operations.
The main aspect of EHR’s is that it allows healthcare professionals to access medical records virtually anywhere. With this ability comes a responsibility. The MCO must make sure they are properly managing and monitoring their EHR. The main difference between MCO and a physician office is that MCOs combined all the functions of the healthcare field: delivery of care, health insurance, and administrations (Vecchione, 2015). Thus, making their electronic needs more complex than the average physician office or group. Overall, MCOs have more functions and services than the average physician’s office.
Electronic health record (EHR) program
Practice Fusion is compliant of the Health Insurance Portability and Accountability Act (HIPAA). Practice Fusion is a free electronic health record company. It offers free web-based electronic health record software for healthcare professionals. The software works over a cloud network, so patients and providers can access their healthcare information anytime, anywhere.
Essential functions. The essential functions of Practice Fusion are: online scheduling, e-prescribing, online referrals, charting, and labs and imaging. The software contains billing services as well, helping healthcare professions to get paid faster. The software is ICD-10 certified, thus there is no need for extra medical billing software. This software also allows patients to gain access to their diagnoses, test results and prescriptions through their server. As the healthcare professional adds information onto a patient’s chart that information is updated in the patients records (Practice Fusion, 2016).
Costs. The services is free to sign up. The software also comes with ICD-10 certification, thus, decreasing medical billing expenses (Practice Fusion, 2016). Thus, Practice Fusion would decreases spending more than just eliminating the costs of EHRs.
Projected savings. According to Practicefusion.com (2016), providers spend an average of $117,672 a year on their electronic health record system. Practice Fusion is a more cost effect solution for the MCO. Practice Fusion has no binding contracts, no implementation costs and no hidden fees (Practice Fusion, 2016).
Insourcing versus outsourcing
There are several benefits and disadvantages when it comes to insourcing or outsourcing talent within an organization. For the IT department at the MCO, both insourcing and outsourcings have pros and cons.
Insourcing. Insourcing involves setting up and operating an in-house IT department. Insourcing does come with cost requirements. Telecommunication equipment and servers are all needed in order to operate an IT department. Also, companies generally pay their IT employees salary, which comes with an added expense. According to Lebeaux (2009), “the pros of insourcing are the speed and control of business change”. Insourcing does have one cost benefit. When outsourcing, companies may add requirements when it’s time to renew contracts. Thus, driving up the price of the IT services. This is not a risk with insourcing.
Outsourcing. Outsourcing allows an organization to save money on labor and equipment. With outsourcing, healthcare organizations can save money by not purchasing the telecommunication equipment computers, and servers needed in order to operate an IT department. Housing IT professionals also come with an expense. Outsourcing is smart because it allows a healthcare organization to tailor their IT needs to their budget. Thus, labor and overhead costs are dramatically reduced. However, outsourcing comes with contracts. Giving another company an opportunity to increase costs at the time or renewal (Lebeaux, 2009).
Final recommendation. As mentioned above, insourcing IT services save healthcare organizations money by not having to deal with renewable contract. However, outsourcing allows a healthcare organization to save money on labor and equipment. The cost of these products and services can quickly add up. Computers, telecommunications equipment, and servers can be an expense for an organization, as well as the maintenance required to keep the technology running (Lebeaux, 2009). Thus, it would be more cost efficient to turn to outsourcing for the organization’s IT needs.
Conclusion
The most important function of information technology (IT) in managed care organizations (MCO) is to support their business. With the increased cost of technology and implementation in the healthcare profession, having a proper IT department may decreased costs associated with operating a healthcare organization. Managed care organizations (MCO) combined all the functions of the healthcare field: delivery of care, health insurance, and administrations. Thus, it is important they have an IT department and software able to handle all of the organizations need. The critical elements for MCO is having an IT department that is able to handle the complexity of the organization. If the IT department can handle the complexity of MCOs, than having an IT department can reduce risk for the MCO.
References
Lebeaux, R. (2009). The benefits of IT insourcing. Retrieved on 14 August 2016, from http://www.enterpriseinnovation.net/article/benefits-it-insourcing.
Practice Fusion (2016). Stay on the leading edge of care through the cloud. Retrieved on 14 August 2016, from http://www.practicefusion.com/electronic-health-record-ehr/.
Vecchione, A. (2015). Managed care pharmacies reap benefits of EHRs. Retrieved on 14 August 2016, from http://www.healthcareitnews.com/news/managed-care-pharmacies-reap benefits-ehrs.
