Healthcare budgeting determines the scope of funding requirements, including operating costs, and capital expenditures. Health Information Management (HIM) departments are often underfunded expenses that can negatively affect a healthcare organization’s bottom line when mismanaged. Managers of HIM budgets deal with projecting budgets that estimate revenues and expenses over time.
Management and Release of Records are Critical Costs
The release of medical records is a crucial part of the overall HIM/HIT budget. The cost of photocopies, employee time, and postage is often overlooked in determining the true cost of record management, and this required expenditure can be a significant expense for healthcare organizations. If a practice size requires a full-time records processing team, this is likely included in your annual budget.
6.5 percent of general-service salaries for medical records is average, but the quality of the documentation process can directly impact revenue and rate of medical errors. 75 percent of hospitals report that medical records department costs make up to 5 percent of total general service costs, and an average of 15 percent or more of overall general service gross salaries are paid to the top 10 percent of hospitals who invest the most in medical records salaries. Alternatively, hospitals in the bottom ten percent spend less than 3 percent.
Outsourcing often alleviates many concerns regarding medical release and complaints. The reduction in patient phone calls, an improved compliance in HIPAA risk, with a reliable full-time staff are all benefits of outsourcing.
Healthcare IT Budgets
Well prepared budgets and plans create improved understanding of funding allocation for projects, initiatives, and functional departmental needs.
Effective budgets enable alignment of operational plans with financial goals. Budgets work toward organizational prioritization through strategic investments. With a concise budget in place, purchasing errors and costly financial pitfalls are minimized.
IT systems work well when they increase productivity and efficiency. Healthcare IT budgets are often underestimated by practice managers, and a separate budget for IT is sensible as advances in technology are ever present in healthcare. Organizations must determine which areas are working well, and which require additional resources.
Today’s realistic budgets consider hardware, computers, and updates in software, from your electronic medical records (EMR) system to your customer management system or customer relationship management software (CMS/CRM), to your patient portal, and telehealth services.
Create a baseline budget showing your IT expenses for the current year, adjusting for anticipated changes. The revenue and cost of IT varies from month to month, quarter to quarter, and year to year. Review your IT budgets from previous years when creating your healthcare IT budget. Feedback is especially helpful when upgrading a system, as this process requires input from both management and medical staff, as IT systems are used by everyone.
Healthcare IT budgets are estimates. Monthly reviews are necessary and must align with organizational goals. For example, a goal of improving the patient experience may include website updates and a new patient portal. Budgeting for IT improvements can turn goals into profits.
Budget for Future Hardware and Software Costs
Hardware and software supporting healthcare becomes outdated rapidly. Consequently, healthcare systems malfunction, and are prone to security breaches. Concise asset management systems can track when hardware and software are nearing end of life. Upgrades and replacements can then be more accurately budgeted.
Security and Training Matters
Ransomware and other cybercrimes are on the rise, and healthcare providers make an attractive target. Security measures to consider include email filtering, firewalls, secure gateways, antivirus software on all devices, email encryption, file sharing, patient portal backups with at least one off-site secure location, and installation of immediate updates, including the maintenance and monitoring of all systems are prudent.
Employee technology training may be a cost that appears built-in to your budget. Current employees teach new employees. However, the best practice is to provide new employees dedicated training in all software and technology. Lapses in training to reduce costs can prove detrimental. Employees working with software and equipment who have not received training are less productive than staff who know all systems. Security-related issues are less likely with adequate training.
Healthcare IT budgets need appropriate funding but perceived savings using low-end hardware will likely require frequent replacement. Additionally, a low threshold for security issues leads to higher chances of security breaches, dissatisfied patients leaving negative reviews, the effect on future revenue opportunities, and staff turnover. A thorough analysis of your organizational IT present and future needs allows for the creation of a realistic budget that makes sense to stakeholders.
Health Information Management Tips
When building your organizational HIM budget, there are several factors to consider.
EHR should be a top priority as it is likely the highest cost in the organization’s technology stack. A consideration related to the EMR is how it benefits or negatively affects budget when it comes to data security and compliance.
Recent data proves hospitals’ medical records-related costs typically account for just under 3 percent of total general-service operating expenses, and almost 7 percent of total general-service salary expenses. The top 10 percent of hospitals investing the most in medical records salaries average 7%. In contrast, the bottom 10 percent of hospitals invest roughly 1.5 percent or less.
Healthcare organizations should consider paid vendor services involved in HIM/HIT, this could be a third-party storage server, or a technology equipment service company. Quality assurance and auditing cannot be overlooked. Workflow processes will always require pre-planning for anticipated budget aberrations, and the execution of necessary adjustments.
Telehealth services are becoming a necessity in healthcare that often require system upgrades. Running an outdated system without support is likely to have unwanted outcomes. Planning for and allocating funds to handle upgrades is key for budget success. Contingency and emergency considerations for a major event within your EHR and servers usually cost more than most budgets allow for. Budget revisions should be performed quarterly, if not monthly. Healthcare moves fast, and so does technology.
Outsourcing to a Trusted Partner
Outsourcing any healthcare service can be a big decision but can reduce costs. When you outsource, your budget must include the expenditure for the outside company to manage your IT needs. In-house IT staff salaries will be covered separately in your overall practice budget. IT spending per user, rather than per employee, is a more accurate analysis of future costs.
At Virtual OfficeWare Healthcare Solutions (VOWHS), we have the experience you need in a healthcare IT partner. Keeping your practice’s IT systems secure and running smoothly is our goal. We help you create a realistic healthcare IT budget that considers your present and near-term needs and security needs. Our team can also help your practice reduce costs and increase efficacy.