Accounting and Financial

Index - Major Sections
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Index - Same Level Subject

Assessing HIS
Change Management
Healthcare Processes
Certification Process
Accounting and Financial
Human Resources
Information Management
Management
Data Analysis and Data Mining
Error detection and Fraud Prevention
Surveillance
Research
External Communication and Reporting
Marketing
Safety and Security
Software and Programming
"Bells and Whistles "
Client and Household Care
Quality of Care
Education and Training
Administrative
Government and Political
Employee Efficiency

Index - Child Subjects

Introduction

Financial in this section refers to the financing of the organization through external funding. This is relevant for
(1) Private organizations looking for investors and/or seeking loans from financial institutions.
(2) NGO seeking funding for there projects
(3) Government organizations looking to renew their charter on life.

Many use the excuse that installing IT systems is too expensive and that there are not enough skill personnel to maintain or use these systems. InHCc does not believe this. InHCc believes that the cost in human life, sickness, time, and resources far outweigh any cost for equipment or training that may be involved in installing these systems. The threat to the world population in not being able to monitor and control the newly emerging diseases is too great. It is time to put into place a long term solution instead of just trying to patch the holes.

Accounting

Although accounting is considered the "information system," in many organizations, in reality it is only a very small part of the organizations resources.

Standard Unit Costing (and comparisons between units) is made possible by the standardization of all events and coding.
Time value components allows for the analysis of the flow of services and costs
Allows analysis of demand and budgets built on demand…not on a arbitrary "what do you think we will do this year?" or even better "last years budget + 10%"
There is a difference between cost cutting and increasing efficiency….in most cases, cost cutting may actually decrease efficiency and increase cost…
Price list can be updated automatically throughout the organization and can be based on location, and patient profiles

While many other vendors will list all the Costs and Expenses that their system will offer, in fact most all applications will deliver these benefits. Here some are some of them...and personally, I do not believe that these are the real benefits of a good HIS system...and I will try not to list the really stupid ones like "save paper"!

Reduces Transcription cost (automatically create notes)
Eliminate coding costs (the codes are automatically entered by the system when the HCP clicks on the item description.)
Eliminate fraud
Eliminate inefficient processes (through better cost accounting and monitoring)
Reduces the cost of looking for reports
Reduce the cost of caring for patients by better care practices (References, Alerts, and Protocols are built into the system)
Faster through-put of patients with the same or better care
Eliminates or reduces much of the manual processes.
Faster and more accurate billing
Ability to view the entire household balances to determine if there is an outstanding balance
Ability to effectively use "like kind payments" (payments made in units other than money - food, work, products, etc)

Accurate cost-benefit analysis way be performed over time

Medical care does not consists of only the “physician consultation record” but rather all of the coordinated actions taken by each and every Health Care professional who comes in contact with the client.

The InHCc System provides detail information on every action taken in the health care setting. By providing this detail data not only can processes be evaluated but also each individual health care professional

A simple example is the change in the system at a local clinic from the physicians taking the vital signs and the initial history, to having “triage” nurses collect this initial data. The physicians were able to increase the number of clients seem from 3 per hour to 4 per hour while giving the same quality of care.

The InHCc system made it possible to measure the cost-benefit of this change accurately.

Proof of Value

Demonstrate the value of products and services to the community, regulatory agencies, and the health industry.

It probably goes without saying that because of the benefits that the Information System offers, the project will be more sustainable, but we will say it anyway.

If stakeholders clearly see that a project is being operated effectively and efficiency then they will feel that the project has a "value."

Too often the reason that projects are unable to obtain financing is because the people with the money see no reason to finance a poorly run organization or an organization that is not producing a product that the people want at a price they are willing to pay.

A good example of this philosophy is the higher use of clinics and hospitals run by NGO's over those run by the government.

Another example is that of insurance investments. If risks cannot be measured, there will be no investment.

(see Health Economics)

Increase Funding Potential

External communication to the Public and Enhanced fund raising efforts

Although it will not be a major contributor to the raising of funds, the Internet and email can be very effective for follow-up and external communication to the Public. “Lists” can be developed and used to send to all potential and interested parties the current activities of the Organization. This can be done on a regular and consistent basis without much cost or effort.

Improve Commercial Potential of Research Findings

The Organization will explore ways for their staff to share in any royalties that may ensure in commercial development. The staff should be trained to “think in terms of the business of research.” It is only when the researchers think in terms of selling their product, research, will the Organization be competitive. This does not mean that the staff will always think about actual money profits, but rather how to raise money to actually fund the research that they want to perform. In order to get funding, the researcher must be able to deliver a better product to the donors then any other researcher. If the researcher does not deliver a better product, he will lose those funds to another researcher. Gone are the days that funds were handed to research organizations without a clear cost-benefit analysis done on the use of those funds and gone are the days that funds are given to research organizations that are producing a clearly inferior product.

In order to keep aware of the changes in types and priorities of Donor Organizations funding, email and Web searches can be easily integrated into an organization funding department. If an organization understands a donor's requirements, it minimizes stress and the time spend by both parties.

Since donor confidence in project planning and operations is increase, donors will be more willing to commit their funds.

Accounting for funding

It has been estimated that over fifty percent (50%) of the accounting effort that is undertaken by an organization (governmental or NGO) is performing accounting processes for reporting to external agents (non-productive management). With a good HMIS, the data that is used for the monitoring and management of the organizations can be adapted to provide the accounting for external agents at the same time.

Determining Eligibility

It is widely believed that "benefit leakage" is an area that is a major problem. It was reported by a CEO of a municipal healthcare organization that he estimated that over 30% of his clients were not eligibility for services due to the inability to identify the clients (even with photos, the "Real" beneficiary would sign into the clinic and then give his "ticket" to another individual), age limitations, inability to identify dependent children, and not having an up-to-date Master list of members.

Cost Centers

In research in developed countries it has been shown that between one-fourth to one-third of all medical care is either inappropriate or offers no benefit to the patient (Brook, 1989).

In previous systems a very large percent of the staff's time was spent either collecting data (writing it in registrars and summarizing the data), and in attempting to analyze this data.

An Information System reduces the time to collect data (it is done automatically during the interview with the client); in analyzing the data (it is done automatically).

A base-line for measurement of performance can be easily calculated in order to have indicators to improve processes.

By Defining “cost canters” and areas of responsibility, costs can be allocate to the responsible cost Center and management can be held responsible for their own units.

Only the service provider is directly involved with the raw data.

Results are simultaneously returned to the user of the information as well as the government data collection agency.

If the program can be operated more efficiently, the chances that the program can be sustainable is increased.

Costs can be controlled by using the management system called “management by exception”. Data will be monitored and key indicators will be used to signal possible problems. Instead of every piece of data being reviewed, only the data that appears to represent problems will be investigated. By using this technique, managers will have more control, mis-management can be detected earlier, and managers will have more time to manage.

By having more data, more options and alternative strategies can be explored in order to make changes such that the program will become sustainable.

Address issues of Improved resource control and Improved asset utilization

Reduced administration expenses by having reporting and routine management tasks automated.

Calculate “bottlenecks” in the flow of inputs and outputs (Time, cost, labor, education, skills, physical space). These bottlenecks can be managed for a more efficient operation

Reduction in the time it takes to order and process that order (Laboratory, Imaging, Medicines, Supplies, etc)

Standard Unit Costing

Estimated costing of products and services sever no purpose unless they are accurate to a reasonable degree.

Standard Costing is the ability to be able to accurately determine unit cost.

Updating of information in real time.
Ability to report detailed resource utilization studies for every classification of expense for all organizational units, including:
direct and indirect costs, restricted and non-restricted costs, fixed, variable, and semi-variable costs
Costs are easier to calculate
Ability to model “what if costs.”
Ability to allocate all costs to the very smallest service level.
Ability to have the flexibility to draw on different methods for allocating costs and to be able to develop what-if scenarios.
Ability to adjust budgets manually by each period as well produce variance reports –reports comparing standard and actual costs and corresponding variances
Ability to perform comparison analysis not only within the same classifications of units within the organization but also outside the organization such as industry averages
Ability to “drill down” through multiple dimensions (departments, units, employees, service costs, etc) as well as the time dimension

Resource Management

Resource use can be monitored in real time. Provides for historical detail data on demand and from any location.
By giving the suppliers direct access to clinical and national inventories, it is possible to move inventory directly from the supplier to the clinic. This will reduce reorder times and reduce inventories in the national warehouses. It will eliminate extra transportation costs and shrinkage.
Possible to move staff where they are most needed. Staff can be more closely monitor by using digit signatures and time coding.
System scales to fit the organizations needs. Computer technology is getting smarter and cheaper.
Stock turnover increase due to real-time stock control.
Stock "shrinkage" is reduced with better inventory control tracking from the warehouse to the patient.
Reduction in the number of staff required to produce a unit of work (Administrative staff)
Identify abnormal events
Identify wasteful practices
Create better inventory management by providing "predictive" forecasting of product and service requirements

Appointments

Appointments are currently used to schedule the physicians time for the Client Encounter (consulting or medical procedures.) However, Appointments can also include the following:

Scheduling of the space (examination room)
Scheduling of all team members required for the Encounter including the nurses and any specialist staff members
Scheduling of the procedure required
Scheduling of the physical equipment required (allowing for inventory control)
Scheduling of support services (Laboratory, Imaging, etc.)

Benefits

Staff and equipment are more efficiently used
Resource control (inventory control) will be better controlled. The reasons the resources were used can be determined.
Resource requirements can be projected.
The right resource can be assigned.

Inventory Control

Inventory control is a big issue and computer systems help, but they do not eliminate the shrinkage problem. Even with bar-coding, a nurse can scan the patient's band...but she can still pocket the drug.

Computers help with units of measures, list available inventories, on order, reorder points, max and min order levels, vendor with best price, shortest delivery time, and many more wonders...and they can all be used to improve the organization and patient care...if the management knew how to use the data!
Based on predictive inventory levels, automatic reorders can be implemented.
Fraud detection data mining techniques can help prevent shrinkage. One way that computers can help in inventory control is to ensure that the drug ordered was the correct drug for the condition of the patient. Drugs ordered that are not related to the condition should raise a red flag.
Prevents out of stock
Prevents obsolete inventory
Prevents shrinkage
Creates the ability to move inventory to those locations in need.

Investments in Resources

A good HIS System provides sufficient data that breakeven analysis may be easily undertaken. By knowing the optimum investment amount, the benefit-cost can be increased.

As an example, a very low percentage of the “proportion of health facilities that did not experience drug stock-outs” is a sign of very poor management. It is impossible for every facility to carry every drug at all times and they should not be expected to do so. This is a waste of resources (overstocking of inventory requires additional money).

Another example is “what is the best size of clinic to build”. Are organizations building clinics that are too small? Even though individuals may be nearer to the clinic, very often these clinics are not viewed as providing quality care (they do not have in house labs, x-ray machines, or medical specialists). With proper analysis, based on the target population, the clinic that best serves the needs of that population can be built, equipped, and staffed.

Cost Accounting

Evaluation of the risks and costs of providing health care services

A good HIS System provides sufficient detail information about each disease occurrence, its treatment, and its outcome that accurate costs estimates can be made. It evaluates very visit, the services that the client received during that visit, the diagnosis, and the treatments prescribed. The System provides information regarding processes in such a way that fix cost and variable cost data are easily derived. By separating costs into both fix cost and variable cost an accurate evaluation can be obtained as to the amounts of money needed to reach a targeted goal.

Different management plans can be evaluated to determine the most effective health care solution. By comparing processes across all locations, the solutions that have shown to be more effective can then be used to develop “evidence based medicine” for the target population.

Donors may access the System (their data) “over the Internet” at any time and view all events as they happen. If there are any abnormal events or conditions, action can be taken immediately without having to wait until the end of the project.

Insurance companies can identify its complete relationship with a client or supplier of services and easily identify those that may abuse the relationship or need more services.

Accurate cost-benefit Analysis may be performed over time

Medical care does not consists of only the “physician consultation record” but rather ALL of the coordinated actions taken by each and every Health Care professional who comes in contact with the client. Only looking at the "physician's" work and time is missing about 80% of the costs involved in providing care.

A good HIS provides detail information on every action taken in the health care setting. By providing this detail data not only can processes be evaluated but also each individual health care professional that is involved in the care of the individual.

(See Accounting)

Security of Data

Data Backup is easily performed. A Backup system internally or off site is easily affordable for disaster recovery.
Remote monitoring and automation system operational reports helps detects any problems.
Fallover clustering can be easily implemented such that a backup system will immediately come on line if there is any problem with the main system.
Coding "Numbers" are not available to the user. All data selection is by the description of the entity required so that there are no data entry errors.
Data can be easily stored in any location. Backups can be made with a frequency determined by the volume of active data
Data can be stored "forever" with very little cost
System records the time and name of the user for every access and data entry.
System prevents individuals from either "deleting or destroying" any documentation

Patient Data Protection

Client Privacy.

Any and all data can be "locked down" so that only authorized individuals can "see" or access the data. Data can be encrypted so ever in a unauthorized person tries to view the data, they would not be able to read it.
Working staff can only see the data that pertains to their patients.
System records the time and name of the user for every access and data entry.
A confidential code can be placed on either the Client where he is treated as a "unknown individual", on a healthcare subject, or on individuals data entry records.

Evaluates the risks and costs of providing health care services

The InHCc System provides sufficient detail information about each disease occurrence, its treatment, and its outcome that accurate costs estimates can be made. It evaluates very visit, the services that the client received during that visit, the diagnosis, and the treatments prescribed. The InHCc System provides information regarding processes in such a way that fix cost and variable cost data are easily derived

By separating costs into both fix cost and variable cost an accurate evaluation can be obtained as to the amounts of money needed to reach a targeted goal.

Donors may access the InHCc System (their data) “over the Internet” at any time and view all events as they happen. If there are any abnormal events or conditions, action can be taken immediately without having to wait until the end of the project.

Insurance companies can identify its complete relationship with a client or supplier of services and easily identify those that may abuse the relationship or need more services.

Evaluates alternative methods of health care Financing

Evaluation of alternative ways of financing can only be made if sufficient data is collected and compared on an equal scale. The InHCc System provides data to create demand functions for services and provides the social data of the participants in each alternate proposal.

Vendor Analysis

There are good vendors and bad vendors....so how do you know when you can depend on a vendor for providing the services that he promised. We can calculate a "Vendor Performance rating" over sever selected indicators.

We need the true costs of the products (freight, lead time, return rate and policy, defects, package size, cost of capital for storing the product...vs. "just in time" deliveries)

Economics of scale

By the triage nurse having the ability to view all of the patient's information on line, the cost in treating the patient can be minimized

Less errors means that less labor is needed to make corrections.

The heart of the system can be anywhere in the world. The investment in programs for analysis and in the skill personnel to do this work is only done at this one location. There is no need to decentralized and incur the additional costs that this brings. Each and every individual user has the same level of expert help as any other.

Indicators perform a function of motivating people to "beat" the averages. An example of where indicators along are used to motivate staff is in Cuba.

Instead of all the manuals and brochures having to be printed out in advance, they can be printed as needed. All new changes and new additions will be included immediately. No information will be given to managers or to the clients that is outdated or has conflicting information regarding services. They is no need to continue to use "old stuff" just because you haven't ran out of it. There is no need for a manager to "run out of" any documents that he may need.

Access through the Internet allows donors and interested organizations access to the database where they can view their own "projects" without compromising security. It has been estimated that over 50% of the time spend by the accounting department in a funded organizations, is spent in preparing for auditing by donors. By having the ability to remotely access their accounts, donors no longer have a need to spend their funds or yours on expensive audits. Donors may "audit" the books remotely, at anytime, all the time, and will only need to have actual access to "certain" items in which they can request before they arrive. By having all the information the donors need "before" they arrive at the organization, organizations can more effectively use their time.

The cost to deploy and maintain analytical applications on every decision maker's desktop would be so high as to be prohibitive. By having all statistical applications in one location, Licensing fees will be minimized. This will allow the purchase of a more advance statistical application than otherwise would be possible.

Simpler systems at the lower levels eliminate the need to have highly trained technological support, these systems will have fewer breakdowns and "crashes."

Project sponsors, top level management, and other interested parties can have access to the day-to-day operations of the organization without having to be physically present. Tremendous savings in travel expenses can be achieved by accessing this data remotely.

Software policies and virus detection applications can be downloaded in place to prevent user installed programs and other unauthorized programs. [disk imaging]

Services can be expanded since each individual service has been made more efficient and this gives the staff more time to spend on other objectives.

By having collective data, different health care organizations (and levels of management) can work more closely together eliminating duplication of effort and overlapping of services. This will prevent the dissemination of inconsistent and contradictory information that produces confusion and "dis-education" among the population.

Compliance with Coding Requirements is easier. Usually when forms or registers are filled out, coding must be added to the original data. Staff must memorize the coding, and there is always the possibility that the codes are incorrect as entered. In many cases a second person must verify that the codes were entered into the system correct. With a "lookup" system this is not necessary. Codes are entered automatically and without error when the staff member selects his choice in his own language.

Data storage and indexing is no longer a problem. Storage rooms do not have to be maintained, staff do not have to "look" though records to find the items that they need, and there is no worry about the environmental conditions or the rats.

Although the Research Review Committee and Ethical review committee are usually well organized, most Organizations have no formal method of “budget preparation review.” There should be some way to evaluate projects on a cost-benefit analysis first, before they are initiated. A formal “budget preparation” protocol can be implemented using a tool such as “Microsoft Project”. This program help prepare “time lines” activities using either Gaunt or PERT methods and “cash flows” of the project.

It has been estimated that up to 50% of the time of the accounting department is taken up with the task of accounting for funds for the Funding agency. By implementing an improved “Financial System” through a data warehouse, donors will have “on line” information of their projects at anytime they care to access that information. The accounting staff need not even know that the donors are “doing an Audit.” By letting the donors have access to this information, they will have faster information, and they will have it in the form they want. When the auditors do come to the project for their audits, they and the project will already know what they want and will be able to provide that information easily. By using group programs such as “MS Outlook” or “Lotus Notes” all projects can be “bundled” into one file; updates, notes, data, financial, etc.; All can be made available over the Internet. All information will be obtainable quickly, easily and at a low cost.

Manual Labor

All data should be collected once and only once. It is extremely costly to have many different organizational units collecting the same data. Instead of having each organizational level, summarizing their data and sending it up to the next level, a data warehouse can be used to collect all raw data directly from the lowest level. The warehouse could then summarize the data for whatever level that requested the data and send it down to that level. No detail information would be lost. For management purposes, for example, if a higher level needed to know the details of why a certain “clinic” had data that was not within a certain range of values, the higher level could “drill down” to the very detail of the clinic. This is management.

Data is entered once and once only. Errors due to bad hand writing is eliminated.

Redundant information (duplication of data or aggregate totals) will be eliminated.

Reduction in the number of forms and registrars that must be filled out.

Contain costs

All expenses of the Organization can be examined more closely. What is important is that funds used by the Organization be viewed as any other investment. . “Containing Cost” is not the issue. Maximizing the benefit of the use of funds is. If those funds that are “spent” return more in the way of benefits, then those funds are considered a worthwhile investment. For example, if $1.00 is spent and it can save the Organization $2.00 then that $1.00 should be spent. That is a 100% return on the investment.

Audits

Develop audit trails for internal documentation and external auditors.

Preserves all history data in is original form such that there is no lost information from summing...a key problem when a summary reporting system is used.

Fraud Detection. The immediate access to detailed information made available by the system provides invaluable support for detection of fraud. Information about a HCP activities down to the level of a single patient event is readily available. A HCP’s treatment patterns can also be displayed in any desired combination needed.

Consolidate Audits Donors' ability to “audit the books” will be greatly enhanced by implementing an information system. This will save significant amount of time and labor expense.

Links:

InHCc Cost Accounting

InHCc Managerial Accounting

InHCc Auditing

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