ICD-10’s Hidden Cost

The characters on the train into Philadelphia, while never dull, were more interesting than usual this morning.  The woman across the aisle from me wore her hair in a style that could be described best as resembling a termite mound.  The ride felt so much like bumper cars that I was tempted to ask the driver if he had to pass some sort of training program to get his license, or if all he had to do was to collect a certain number of bottle caps.  It gives me the feeling that there should be a lifeguard at the gene pool.

The med student seated next to me on the train reads his book, but then, everyone one the train reads. I asked him what he was reading.  Turns out it was a book about converting from ICD-9 to ICD-10.  Medical coding.  Those little numbers, charge codes, on your doctor’s invoice that enable the doctor to charge you for the specific services provided.  There didn’t seem to be much of a plot, and he did not seem to be very engrossed in the material.

The conversion from ICD-9 to ICD-10 may be the biggest gotcha on healthcare’s horizon, especially with regard to hospitals.

Money will be spent and money will be lost—lots of it.

Health and Human Services (HHS) estimates that the cost of converting can be broken down into three categories, and it estimate the relative cost of those categories:

  • Training                              22%
  • Lost productivity               35%
  • System changes                43%

Two of these, training and system changes, are controlled variables.  They relate to things the service provider will be doing.  The other, lost productivity is the result of how well the service provider managed the other two.

HHS estimates productivity charges will range from 6-10% due to the fact that it will take people between 500 and 1,000 hours to become proficient in the new codes.  Others have estimated that for hospitals with more than 500 beds the total cost of the conversion (actual cost plus opportunity cost) will be more than ten million dollars.

So, in layman’s terms, what does that mean with regard to the business of managing the hospital?  How does one develop a project plan for lost productivity?  What are the tasks?

Let’s look at what is involved.

System Changes:

Everything will be changing; business rules, business processes, forms, reports, and systems.  Ask yourself which systems that you use involve coding?  Now ask yourself if you like using those systems.  Are they easy to use?  Are they easily understood?  If the only thing changed in those systems is the codes, they will still be just as tedious to use and those systems will be less usable.

A large hospital will spend five million or more dollars to change systems and the end result will be that those systems, at least for the first 500 to 1,000 hours will be less usable.  I believe those hours are underestimated.  Most systems are tied to other systems into what has become a bit of a kluge.  Changing integrated systems is a lot like playing the children’s game Pick Up Sticks—touching one stick often winds up making things happen to the other sticks.  Changing one system will cause things to happen to the other systems.  Ineffectiveness breeds more ineffectiveness.

Lost Productivity:

According to estimates, thirty-five cents out of every dollar spent on the conversion will be allocated to lost productivity.  This is like buying a gallon of milk and having to pour a third of it in the sink before you placed the carton in the refrigerator.

What are the why’s and where’s of the productivity loss, and what can be done about it?  Interpreting the HHS estimates, they are essentially stating that while the conversion will be done, it will not be done well.  In fact, those in the know published that hundreds of millions of dollars will be lost converting to ICD-10.

Will your hospital be contributing to that loss?  Without question; unless you figure out the causal factors of that loss, and put a plan in place to prevent it.  HHS calculates hospitals will lose thirty-five cents on the dollar even after having spent twenty-two cents of every dollar to train people.

Plan on fifty-seven cents of every dollar spent on the conversion to ICD-10 being wasted.  Get that milk carton out of the refrigerator and pour some more into the sink.

Training:

The training program envisioned by HHS that hospitals will undertake will result in a planned productivity loss of thirty-five percent.  What will your productivity loss be if your training program is less effective than whatever HHS was envisioning?  Clearly they are not holding out high hope for the success of ICD-10 training given that it is estimated that becoming proficient in the new coding could take one thousand hours.  (It only takes about 50 hours of training to obtain a private pilot’s license.)

Training, the variable over which a hospital has the most control is the area where the hospital has the least experience.  After all, the hospital has never had a business system designer design an ICD-10 training program.

Training will be about learning to use correctly new screens and forms and new business processes and business rules.  It must include those in finance and IT, coders, and healthcare professionals.  To be effective, it should be role-based; customized.

Left up to the usual way of doing it, hospitals will provide classroom study, 24-40 hours. They will probably develop a train-the-trainers program, and the trainees will be presented with a nice-looking ICD-10 training certificate.  Good luck.

Training may be needed for more than half of a hospital’s employees.  For training to be effective and to minimize the loss of productivity it must be designed.  It must include:

  • What will the altered systems user interface (UI) look like
  • Should people be trained on that UI, or will changing the UI result in much less training
  • What will the altered forms look like
  • Should people be trained on those forms, or could designing new forms result in much less training
  • Can the training be designed to be delivered online
  • Can the training be designed to be delivered on portable devices
  • Can the training be designed by roles
  • Can the training be designed by person to assess what areas need more training

The answers to these questions are Yes.  Whether it will be is up to you.  Designing a training program will significantly decrease the cost of training and significantly decrease the productivity loss.

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