Control of Health Care Costs: Process Redesign

Process redesign is simply the streamlining and reconfiguring of various components involved in the manufacture or delivery of product or services. "Evidence-based medicine" and "outcomes analysis" -really the same thing-are prototypical examples of process optimization. MatheMEDics' decision support software is based on these fundamental concepts.

More than half of HMO's lost money last year, and an even high percentage of physician groups and network are edging into bankruptcy. Our key goal, therefore, is to provide solutions by offering our interactive, web-based, decision support software to every health care entity, including hospitals, at financial risk.

Database management software is an indispensable tool in the management of administrative functions in every business. Yet many mechanisms for controlling medical costs for managed care providers remain outside the realm of "computerization." This is because of failure to develop appropriate decision support (expert system) software.

In today's climate of cost containment, resource management using expert system design offers unique economic advantages. Computer-based systems can play a vital role in all areas of utilization management and in reassessing contracting and reimbursement strategies by interfacing them with actuarial and outcomes data. Other applications such as ER triage, call centers, and insurers demand management suggest themselves as well as risk management and stratification for chronic conditions.

The imposition of some type of practice controls using decision support software is more easily accomplished where there is shared financial risk between physicians and health plans. In order to survive, managed care entities will need to improve medical cost control by achieving increased efficiency for the entire spectrum of administrative and medical management functions, including, but not limited to: notification/eligibility, tracking, physician profiling, guidelines implementation, outcomes analysis, and certification of high volume, high cost items.

Hospitals are also at increased risk and are now suffering financially because of failure to impose some controls over diagnostic workups clearly unrelated to patients' admitting diagnoses. MatheMEDics estimates that diagnostic "fishing expeditions" on hospitalized patients contributes the major percentage of unreimbursable expenses. These are unnecessary costs that could be captured as income when appropriate testing is shifted from in- to outpatients. Moreover, on Aug.1 of this year HCFA establised prospective payment for outpatient surgical procedures, making the use of decision support software for hundreds of ailing hospitals a clearcut survival strategy.