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.


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.

EHR’s Two Types of Failure at your Hospital

"Kinetic productivity"

I have been rereading John Eldredge’s book Wild at Heart.  It seems his purpose for the book is to help men cope with their feelings of not measuring up to their father’s expectations.  It delivers its punch at much the same level as the last scene in the film Field of Dreams when the father and son have a chance for one last catch.

(I am pausing parenthetically for a moment for the men to wipe their collective eyes.)

Here comes the segue, so hold on to your EHRs.  Let us spend some time dealing with lost opportunity and failure.  What if we define two types of failures; kinetic failure and potential failure?

Kinetic Failure: the failure to achieve the possible

Potential Failure: the failure to achieve the probable

Viewed from the perspective of productivity, let us define X to represent the service provider’s pre-EHR productivity; the distance from P to A represents the productivity loss brought about by the EHR, and the distance from A to K represents the opportunity loss.


One can argue with some degree of reason that the purchase of an EHR was made with the reasonable assumption that in addition to improving quality and patient safety the EHR would improve productivity to some degree.  In fact, assuming the provider did any sort of cost benefit analysis or return on investment calculation, any ROI, if it exists lives somewhere along the path between A and K.

If productivity is not improved, the service provider incurs an opportunity loss, a kinetic failure. At that point the best a service provider can hope to achieve is to not suffer a productivity loss.

One can also argue that the purchase of an EHR was made with the reasonable assumption that the implementation of EHR would not reduce productivity.

In many service providers EHR has resulted in a double hit to productivity; not only did they not achieve the productivity gains that were possible, they lost productivity.  A lot of people raise complaints when they speak about how much productivity costs.  One thing that is for certain, productivity costs a lot less than lost productivity.

This lost productivity, the kinetic failure, is the elephant in the service provider’s waiting room.  It has been poking its trunk through the door, and the only thing it wants once it gets its trunk through the door is to get all the way in the room.

Well, it is in the room, all the way in.

Part of the confusion facing providers is due to the fact that no matter how bad the productivity loss, a provider can still qualify as a meaningful user. That fact has led many providers to believe that since they can still qualify as such, that perhaps the productivity loss cannot be all bad news.

Let us look at a real example from a client of mine, a hundred and forty physician practice.  This practice had hit a barrier in terms of its ability to add patients, doctors, and staff.  It was running consistently an hour to an hour and a half behind with its patients.

The practice spent millions to implement an EHR.  Several months post implementation the practice was still running an hour behind.  Automating bad practices resulted in only one thing; the bad practices were completed faster.

To have any hope of avoiding kinetic failure and potential failure a healthcare practice must address how it runs its business.  Some business processes are duplicative, some are outdated, and some are wasteful.

Every one of those eats away at possible and probable productivity.  EHR was not designed to be a productivity windfall, but it clearly shines a spotlight on lost productivity.

Fortunately, even if your EHR has led to a productivity loss, all is not lost. Kinetic productivity can be regained, and potential productivity can be captured.  The path to productivity slices right through how the EHR is being used.  User Experience, UX, and usability, can and should be examined, redesigned and deployed.  This is not for the squeamish as it will cut through constraints like ‘We can’t do that’ and ‘We have always done it this way.’

Can’t and always must become productivity’s road kill.

Whatever happened to Healthcare Reform?

I wrote a piece last year titled ‘Robbing Peter to Pay Paul’.  Yesterday I read a thoughtful post by Kim Chandler McDonald which offered a very similar albeit somewhat different perspective on the topic of where the focus on healthcare really lies.  Kim wrote on ‘meHealth’, taking the responsibility for eHealth as the only real way to create an ROI in the space http://ow.ly/5NCPN.  For those who enjoy reading something by someone who knows the difference between an adverb and a potted plant and can actually write a proper sentence I encourage you to take a read.

Mine was on heCare and sheCare and it also speaks to the individual but does so without any attempt to disguise my belief that healthcare reform missed the mark http://ow.ly/5NDet.  Kim wrote asking what if anything has changed in the period since I penned my piece.  For those who may have missed it, and to borrow from FDR, my premise was that the only thing to fear about healthcare reform was reform itself.

For all the talking that healthcare reform created, the silence on the topic has risen to a new crescendo.  The only thing that has changed concerning reform is that the silence has grown louder.

Why has reform missed the mark and what can be done about it?  Permit me a moment to illustrate.  I would ask that all the altruists reading this post take one step forward—wait a minute Sparky, where are you going?  The reform package efforted (simple past tense and past participle of effort) to be all things to all people, especially to those who have been disenfranchised under the current system.

While the goal is laudable, it did not pass the test of being both necessary and sufficient.  Its insufficiency is hampered by the fact that when we are ill altruism ends at our individual front doors.  It goes back to the notion of robbing Peter to pay Paul.  Do unto others, but do not undo unto me.

Most observers believe there is some dollar amount that contains the total spend available for healthcare and that to increase services to those less fortunate—the theyCare populous—means paying for it by removing services from those who presently have healthcare, the heCare and sheCare taxpayers.  And, it is those same people, the heCares and sheCares, whose support of reform has fallen silent.

While a rising tide may indeed lift all boats, it also drowns those tethered to the pier.

ICD-10: the true cost of having no experience

The thing I like least about flying has to do with my control issues; someone else controls the plane and there is nothing I can do about it.  The pilot’s voice seemed to say “Put yourself in my hands.”  Like nails, I thought, like carpentry nails.  As a result I find myself creating caricatures of the people seated around me—I can choose do that, or I can choose to rush the cockpit and wind up being a two-minute feature on CNN with the other passengers asking how I got the gun on board.

I get as excited about someone sitting next to me as a dog does about a new flee crawling around on his hind quarters.  Picture the woman who sat next to me.  I was tempted to ask her how she could dress like that but, I worried she would reply “From years of practice.”  She looked like a disaster victim might be expected to look—a tattered, grey wool blanket draped over her shoulders.  The only thing missing from the scene was a reporter standing over her asking her how she felt about the plane crash.  Her face was strong and equine, with a straight nose that veered slightly leeward.  As she gnawed angrily at her gum with her front teeth, her fingers gripped the armrests so tightly I could foresee the need to call a flight surgeon upon landing to amputate her arms at her wrists.

Anyway, that was my flight.  Yours?  Here’s the segue.

Picture the makeup of the attendees of your last meeting (circle the topic that best describes its purpose; EHR, Meaningful Use, ICD-10).  As I look around the conference table, sitting directly across from the bagels is Jackie.  Jackie has been a member of the IT team since the invention of punch cards.  Bill still prefers to use the “portable” Compaq suitcase PC he was issued during the time the US was playing Reggae hits over loudspeakers trying to coax Manuel Noriega out of Panama.  And Mindy has stormy eyes—sorry about that—Mindy has a coffee mug collection acquired at the going away parties for the prior seven CIOs.

Our Lady of Perpetual Billing’s hospital information technology A-team is waiting to see exactly what type of fertilizer is about to be loosed upon the windmill of their little shop of horrors.  They run a taught ship; nothing slips by them, and nobody can match their job performance.  The last unpaid claim was six years ago, and their efforts have made patient satisfaction so high that the hospital cafeteria’s reservations are booked solid through year end.

It is usually good to have experienced people.  People with twenty years of experience.  Is it twenty years of experience or twenty in one year’s worth of subject matter?  My son has three years of Pokémon experience which makes him an expert on all things Pokémon.   This turns out to be a pretty valuable skill as long as the conversation stays on point.  Unfortunately, being an expert on Pokémon does not translate as readily as he would like me to believe to other areas requiring his attention, areas like cleaning his room.

So, let’s get back to the issue of Jackie, Bill, and Mindy, and our collection of three IT projects.  We can all agree people with their level of experience are very good at what you need them to do, in fact, they are probably irreplaceable.  They know what to do from the moment they enter the building until the moment they leave.  They are in their comfort zone, even though the hospital may not be in its.

Somebody has to work on EHR, Meaningful Use, and ICD-10.  Do you pick people with twenty years of one-year experience?  You may not have a choice.  Twenty years of one-year experience may be the worst kind of experience to add to your team.  It is a given that nobody in your organization is pushing around a wheel barrow full of Meaningful Use or ICD-10 experience.

I spoke with the CIO of a large hospital and listened as he described the hospital’s ICD-10 initiative.  I did not have the heart to tell him that the use of the word “initiative” was overly ambitious.  The initiative was little more than a meeting of a half-dozen “experienced” people; people from operations, finance, and IT.  People who were very good at their jobs—naturally, they had been doing them for…say it with me…twenty years.  One of the CIO commemorative coffee mugs sat on the conference table.

These meetings generally begin and end with unblemished legal pads sitting in front of each participant.  Why?  Let us explore that question for a minute.  The group’s charter is to figure out what the hospital needs to do to be HIPAA 5010 ready by the end of 2011, has to be ICD-10 compliant by the end of 2012, and has to determine what it will cost and what resources will be needed.

Suppose that is your charter, or the charter of someone in your hospital.  How will those with twenty years of one-year experience help you?  What is the first thing you need to do?  What is the second?  What should the group be doing two weeks from Tuesday?

Maybe the best thing to write is “We do not know how to do this!  We need help.”


How the Grinch stole healthcare

Not much has changed in the last year…or has it.

Every Congressman Down in Congress-ville
Liked Health reform a lot…But the Payors,
Who lived just North of Congress-ville,
Did NOT!

The Payors hated Health Reform! The Congressional reform season!
And as everyone’s heard there is more than one reason.
Was it the fear of losing their monopoly right?
Worried, perhaps, that Congress might indict.
But I think that the most likely reason of all
May have been that the uninsured took them all to the wall.

Staring down from their man-caves with indemnifying frowns
At the warm lighted windows below in the town.
For they knew every Congressman down in Congress-ville beneath,
Canted an ear to hear Congress gnashing their teeth.

“If this reform passes, they’ll kill our careers!”
“Healthcare reform! It’s practically here!”
Then they growled, the ideologues’ fingers nervously drumming,
“We MUST find a way to keep Reform from coming!”

For, tomorrow, they knew…

…Stumbling home from the tavern at a quarter past two What each Congressman, intern, and page just might just do And then all the milieu. Oh the milieu, the milieu
Which the Payors hated more than their mom’s Mulligan stew.

Then all the Congressmen, the left and the right, would sit down and meet.
And they’d meet! And they’d meet!
And they’d MEET! MEET! MEET! MEET!
Implement full provision; cover pre-existing…how sweet
That was something the Payors couldn’t stand in the least!

And THEN they’d do something Payors liked least of all!
Every Congressman down in Congress-ville, the tall and the small,
Would stand close together, their Healthcare bells ringing.
With Blackberrys-in-hand, the Congress would start pinging!

They’d ping! And they’d ping!
And the more the Obligators thought of the Congressman-Health-Ping
The more they each thought, “I must stop reform-ing!
“Why for all of these years we’ve put up with it now!
We MUST stop health Reform from coming!
…But HOW?”

Then they got an idea!
An awful idea!
THE Indemnifiers

“I know what to do!” The CEO Payor laughed in his throat.
And he made a quick Congressional hat and a coat.
And he chuckled, and clucked, “What a great Payor raucous!
“With this coat and this hat, I’ll look just like Saint Bacchus!”

“All I need is a pass…”
The Payor looked around.
Since Congressional passes are scarce, there was none to be found.
Did that stop the old Payor…?
No! The Payor simply said,
“If I can’t find a pass, I’ll make one instead!”
So he called his aide Max. Then he took some red paper
And he dummied up the pass and he started this caper.

He loaded some bags
And some old empty sacks
On a Benz 550
And he rode with old Max.

Then the Payor called, “Dude!”
And the Benz started down
To the offices where the Congressmen
Lay a-snooze in their town.

All their windows were dark. Quiet snow filled the air.
All the Congressmen were dreaming sweet dreams of healthcare
When the Payor came to the first office in the square.
“This is stop number one,” The old Warrantist – a winner
And he slipped passed the guard, like sneaking to a State Dinner.

Then he slid down the hallway, Harry Reid was in sight.
Reid was chumming Pelosi, he planned quite a night.
He got nervous only once, for a moment or two.
Then he realized that the leadership hadn’t a clue
Then he found the Congressional stimuli all hung in a row.
“These Stimuli,” he grinned, “are the first things to go!”

The Payor slithered and slunk, with a smile somewhat mordant,
Around the old Cloakroom, looking quite discordant!
There were copies of the bill stuffed in jackets and on chairs, Why, he even found a copy tucked under the stairs
And he stuffed them in bags. Then the Payor, very neatly,
Started humming the jingle from Blue Cross; rather Cheeky!

Then he slunk to the Senate Chamber, the one facing East
He took the Senators’-copies!—didn’t mind in the least!
He cleaned out that Chamber and almost slipped on the floor.
Saw an Internet router, and thought of Al Gore

Then he stuffed all the copies in the trunk of his Benz.
And he thought to himself, “Why don’t I have friends?” “There’s always Tiger,” he said with no jest But TW’s being chased by reporters, those pests.

The Payor spotted the Grinch having trouble with his sacks
And he lent him a hand—he offered him Max Max was quite pleased, for he knew this December,
That the Grinch would become the Payor’s newest board member.

The Grinch was all smiles–he’d made quite a killing
Offering to help pillage if the Payor was willing.
He stared at the Payor and asked, “New glasses?”
The Payor simply smiled, saying “These people are such (You did that to yourself, not me.)

And, you know, that old Payor was so smart and conniving
When he next saw Pelosi he found himself smiling!
“Why, my dear little Nanc’,” the Bacchus look-alike stiffened,
“Botox in this light makes you look like a Griffin.”
“I’m taking these bills home,” he said pointing to the copy.
“There’s a comma on one page that looks way too sloppy.”

And his fib fooled the Griffin. Then he patted her head
And he gave her a wink, and he sent her to bed
And as Speaker Pelosi shuffled off to her army,
The Payor said to himself, “What a waste of Armani!”

The last thing the Payor needed to do,
Was to mess with these records systems, all four thousand and two.
So he drove to HHS, the DOD and the VA,
And stuffed mint jelly in their servers so their networks would not play

And the one EHR, that still worked in the DC
Was the one bought from CostCo and tucked under the tree.

Then he did some more damage
To HIEs, and the N-HIN,
Making the idea of a healthcare network
Just a has-been!

It was quarter past dawn…
None in Congress were his friends
All the Congressmen, still a-snooze
When he packed up his Benz,
Packed it up with their copies of reform in those bags! Stacked to the leather ceiling,
Manila envelopes with name tags!

Three miles away were the banks of the river,
He was poised with the bags all set to deliver!
“Pooh-pooh to the Congressmen!” he was Payor-ish-ly humming.
“They’re finding out now that no Reform is coming!
“They’re just waking up! I know just what they’ll do!
“Their mouths will hang open a minute or two
“The all the Congressman down in Congress-ville will all cry BOO-HOO!”

“That’s a noise,” grinned the Payor,
“That I simply must hear!”
So he paused and the Payor put a hand to his ear.
And he did hear a sound rising over the snow.
It started in low. Then it started to grow…

But the sound wasn’t sad!
Why, this sound sounded merry!
It couldn’t be so!
But it WAS merry! VERY!

He stared down at Congress-ville!
The Payor popped his eyes!
Then he shook!
What he saw was a shocking surprise!

Every Congressman down in Congress-ville, the tall and the small,
Was singing! Without any health reform at all!
The Congress didn’t care, a few were disgraces,
All they wanted, it seemed, was TV with their faces

And the Payor, with his Payor-feet knee deep in the muck,
Stood puzzling and puzzling: “Man, there goes my bucks.
It could be about healthcare! It could be global warming!
“It could be Al Qaeda, Afghanistan and desert storming”
And he puzzled three hours, `till his puzzler was sore.
Then the Payor thought of something he hadn’t before!
“Maybe Congress,” he thought, “simply needs a free ride.
“Maybe Congress,” he thought…just needs to look like they tried.

And what happened then…?
Well…in Congress-ville they say
That the Payor’s small wallet
Grew three sizes that day!
And the minute his wallet didn’t feel quite so tight,
He zoomed in his Benz passing through a red light
And he brought back the copies of the bill for reform!
And he……HE HIMSELF…!
The Payor calmed the whole storm!


EHR: Show me the money

Every wonder how it is that all the billions in healthcare IT money came about?  I imagine it went something like this.

DC 1: Email those fellows over at HHS and tell them we should just make the doctors install Electronic Health Records (EHR).

DC 2: While we’re at it, how about we pay them a bonus to do it…

DC 1: …and we penalize them if they don’t.  Give them money with one hand and take it back with the other.

DC 2: How do we get EHRs to communicate?

DC 1: Make the states do figure it out.  They are looking for more money.

DC 2: I’ll email the governors and tell them we’ve got more billions to pass around.  Let them build some sort of Information Exchange.  They can set up committees and staff them with appointees.

DC 1: Then we can glue those together in some kind of national network.  Where are we going to get one of those?  Figure another ten billion for that.

DC 2: I’ll email the DOD, they are supposed to know something about building national networks.

DC 1: Just to get things kick-started, let’s email the troops and tell them we’ll sweeten the state pots a little more.  Get them to build these extension centers on a region by region basis.

All these dollars, so little value.  Most of it focused on trying to figure out how to get millions of somethings from point A to point B.

How did all those millions of emails get securely from point A to point B?  For a lot less than forty billion dollars isn’t it possible to figure out  how to get my health information to whomever needs it?  Email me, maybe we can come up with an idea for a network.

If you’re still puzzled, we can play hangman.  It has eight letters, starts with an ‘I’, and ends with ‘ternet’.


Why is implementing EHR like getting kids to eat broccoli?

Do you ever wonder if perhaps you are the only person who was never photographed with one of the Kennedys?  That got me thinking about our presidents.  NPR interviewed the person who spent eighty hours interviewing Clinton during the eight years during which he was allowed to park freely anywhere in DC.  See how this is already starting to come together?

The interviewer mentioned that Clinton described the Lewinski episode as a distraction.  I also employed several descriptors of that affairs—and yes, the pun is intentional—but I must have overlooked calling it a distraction.  People on both sides of the aisle called the episode a stupid thing.  Perhaps we should define the term ‘stupid thing’—doing long division and forgetting to carry the one is ‘a stupid thing’; mixing a red sock with a load of whites is ‘a stupid thing’.  Sometimes politics can have us all screaming infidelities.

When I share my thoughts about these things, some look at me like they are staring at an unlabeled can of food and trying to guess the contents.  Perhaps objectivity is only for the truly unimaginative.

Here comes the segue.  All of that thinking about presidents got me to thinking about Mr. Obama, reform, and EHR.  A lot of the original economic reform discussion had to do with TARP monies being tossed at the banks.  It was almost like a reverse bank holdup as the feds made the banks take money.

Which now takes us to healthcare reform and EHR.  ARRA money and states like New York providing a stimulus to the stimulus.  What is so distasteful about EHR that it makes governments offer money to get providers to implement it?  How might we illustrate this?

Let’s say I offer my children a choice of two things to eat; broccoli and chocolate cake.  What happens?  My kids make a bee-line for the cake.  The broccoli requires an incentive to get any takers.  My children are prepared to suffer untold penalties instead of eating the broccoli.  There may be some financial incentive which will entice them to eat broccoli, but it will be pricey.  Telling them it’s good for them, or that they have to eat it makes no difference to short people—they need to be bribed.

Telling healthcare providers EHR is good for them, or that they have to do it makes no difference to tall people—they want to be bribed.  What does this signify?  What is it about EHR that requires incentives and some foreign force majeure to get the discussion underway?  It’s not as though the healthcare providers don’t want to do things that will improve their business.  What is it they know that we don’t?  What other than money would make them run towards EHR rather than away from it?

You don’t suppose it has something to do with broccoli, do you?

For those who enjoy Dana Carvey, here’s a link to his song about chopping broccoli.