Restarting a Provider Organization
Wallace, Jim, Behavioral Healthcare
IT is an important part of a West Virginia provider's turnaround
The story of Northwood Health Systems, a behavioral healthcare provider serving three counties in northern West Virginia, could have ended in failure a decade ago.
The organization was a mess. Patient care had become substandard with serious regulatory compliance problems. Facing more than $ 5 million in debt and three-year operating losses of $3 million, the board of directors was close to filing bankruptcy and shutting Northwood down. Northwood's entire management team had resigned or been laid off.
Since then, Northwood has made a remarkable turnaround - largely built on skillful leadership and strategic investments in technology. Instead of giving up, the board hired Pete Radakovich as CEO in April 1997. It was a bold move, because he had no experience in healthcare. But ludid have 27 years of diversified executive management experience in threee distinctly different industries.
One of Radakovich's first steps was to invest in technology. Prior to 1997, Northwood wasin the "darkages" of computer and information technology. It had 570 employees, who were essentially computer illiterate, working at 20 locations with fewer than a dozen functional computers. Few processes were automated. The computer department consisted of two unskilled technicians. Parts and services for the obsolete central computer were scarce and expensive.
Three technologic developments were central to Northwood's transformation:
* designing a customized electronic clinical scheduling system;
* implementing an electronic medical record (EMR) system; and
* using thin-client technology.
Building a Customized Scheduling System
Before Northwood developed its own electronic scheduling system, nine full-time schedulers maintained dozens of paper appointment books. They were unable to schedule more than one clinician or patient into an appointment, such as for treatment team nieetingsorgroup therapy. Fven basic management tasks were difficult, because there was no ability to measure accurately the number of scheduled hours, patient no-shows, and staff cancellations.
An extensive search failed to yield scheduling software that met Northwood's needs. So, after beefing up its IT staff, Northwood designed its own software that gives schedulers access to scheduling information from any of Northwood's 19 locations at any time.
Integrated into the scheduling system is an automated appointment reminder system that phones patients automatically before their appointments, thereby reducing appointment no-shows and improving productivity. The clinical scheduling system allowed Northwood to reduce its administrative scheduling staff from nine to three people. Clinical staff productivity increased by as much as 30% and client no-shows decreased by an estimated 25 to 30%, resulting in an annual savings of more than $500,000.
Implementing an EMR System
An additional return on investment awaited Northwood upon implementing in March 2000 an EMR system, which won the Process Innovation Award later that year at the Solutions World ( 'onfeienee and Expo in Philadelphia. Prior to that, 12 employees struggled to manage millions of paper medical records for thousands of clients at 19 outpatient and residential sites. In no one location could a patient's entire medical record be reviewed. Misfiled paper records were common. Consequently, quality of care and patient safety were compromised.
Radakovich realized an EMR system was essential. Northwood purchased the MEDItrieve system from The IDP Companies, Inc., and then significantly modified and enhanced it to integrate it into many other systems developed internally. For example, the MKDItrieve system was integrated with patient and employee databases, billing and collect ions systems, and thecustom-designed scheduling system, among others.
Clinicians with appropriate credentials now can retrieve records I rom any of the organization's 19 locations. This remote access ensures that Northwood 's 3,000 patients receive high-qualitycareno matter where they seek services. The system was so successful that Northwood expanded it to financial, human resources, and regulatory compliance functions.
Electronic digital signature capture, a technology for putting original handwritten signatures on electronic documents, was added, eliminating the need for paper printouts just to gei signatures. Northwood then combined the electronic digital signature capture technology with an internally developed two-dimensional bar-coding system to almost eliminate the need for human intervention in records management.
Prior to the bar-coding system, the computer often misread identification data on paper documents. Some paper documents from external sources, such as insurance companies, had to be scanned into the computer. "Header" information put on the documents was used to ItIe them in the electronic system, but they sometimes were misfiled. Lor example, the computer might read the number zero on a document as the letter "O," or an "8" might be read as a "B." The bar codes allow the computer to file the documents flawlessly, and medical records are maintained efficiently and accurately within the EMR system. This modification alone permitted Northwood to eliminateone full-time medical records technician, who spent most ol her time reviewingdocuments that had been misread by the computer.
The results have included reductions in errors, speedier access to records and, most importantly, improved quality of care. The return on Northwood's investment in the KMR system has been more than $2 million to date.
Using Thin-Client Technology
There was another important step in Northwood's transformation: the switch to thin-client technology. The organization's initial, significant upgrade in computer systems resulted in a network of PCs that were costly to maintain and inefficient. A minor problem with a PC at a remote site could require an IT staff member to dedicate a full day to repairs and trawl. In addition, Northwood's full integration ot technology meant that computer downtime could severely hamper the productivity of clinicians and other staff. Even when computers functioned properly, clinicians at remote sites cou Id expect delays of up to 15 minutes to load necessary server-based clinical documents, such as assessments and treatment plans, because of low broadband capacity.
The facilities' geographic separation created a considerable challenge to provide access to centralized information at all 19 siies, especially in rural areas with limited broadband capacity. It became apparent to Northwood leaders that a traditional network of PCs would not be the most effective use of resources.
After considerable research, Northwood decided to use a centralized computing model based on thin-client computers and terminal-server technology, along with Web-based intranet tools. A thin client is a network computer without a hard-disk drive. The bulk of the data processing occurs on the server, so thin clients connected to it can be especially small. Without many operating parts, such as fans and hard drives, the need for maintenance on thin clients is reduced. Another advantage is that work done on a thin client won't be lost because of a brief power outage or network glitch because it is saved on the server.
I he low cost and portability of thin-client technology have allowed Northwood to store backup units at each location. It a thin-client unit fails, a new one can be pulled out of storage to return the workstation quickly to operation. This eliminates the need for immediate IT support and increases the productivity ol both the clinical staff and the IT staff.
Before switching to thin clients, Northwood's IT staff needed weeks to complete minor upgrades to applications and software on hundreds of computers at the 19 disparate locations. The IT staff now can perform such routine tasks in just hours from the server at Northwood's central office. This remote-access iechnology allows clinicians to have access to their computers' personalized desk tops and document s Irom workstations at any Northwood facility.
Because the thin-client terminals only reflect images from the main server, which handle-sail the processing, they don't requirelarge quantities of data to be pulled back and forth across the network as would be the case with PCs. Therefore, even in locations where broadband access is not sufficient for a network of PCs, the bandwidth is enough for a terminal services network using thin clients.
Another major benefit from the conversion to an EMR system and thin-client technology is better protection of patient information, which helps ensure HIPAA compliance. Standardized medical forms have been converted into electronic forms, eliminating the need to produce paper copies. Using thin clients allows Northwood to avoid storing data at each facility, helping to prevent data thefl and unauthorized copying of files.
Northwood is now financially successful with annual revenue of $23 million. Independent reviews twice have found Northwood to be the top-performing comprehensive behavioral health center in West Virginia. State audits since 2003 have resulted in many perfect scores for its facilities. Although technology accounts only partly for Northwood's turnaround over the past decade, it has played an important role in that transformation.
A 'cash bridge' to an IT-based turnaround
The benefits of Northwood Health Systems' technologic transformation are readily apparent today. But figuring out how to make those IT improvements happen at an almost bankrupt organization was not so obvious a decade ago - except (or a turnaround specialist like Pete Radakovich. who came from a for-profit background with skills for using technology to help an organization achieve its mission.
It takes money to make improvements, but when Radakovich took over as CEO at Northwood, the organization was more than $5 million in debt and had been incurring operating losses of more than $80,000 a month. Based on his decades of executive management expérience, he realized that Northwood's future depended on stabilizing its finances and developing a "cash bridge."
Radakovich worked 393 days in a row, including weekends and holidays, often 18 to 20 hours a day. He renegotiated contracts with some vendors, severed relationships with others, eliminated positions that were not vital to the organization, cut excess costs and waste throughout the system, and implemented a for-profit business paradigm.
"I let the board and employees know what I was going to do," Radakovich says. "I told them to hold on tight. It's going to get worse before it gets better."
One of the key changes Radakovich had to make was to persuade the board not to think of Northwood as a social service agency, which implied that it was dependent on government funding, but to think of Northwood as a business with a strong social conscience.
"The minute you think of yourself as a business, it's up to you to figure out how to survive and how to continually improve the performance of your organization," he says. "It's an unusual paradigm in the not-for-profit world, certainly in not-for-profit behavioral health."
Northwood's turnaround was more difficult than previous turnarounds Radakovich led in the private sector, but it worked. He was able to improve finances enough to free up money to reinvest in the organization, largely in IT infrastructure improvements and upgrades in IT personnel. IT had to be reengineered twice. There were two almost complete turnovers in IT staff. The IT system went from fewer than a dozen computers to about 120 PCs in three years, but then switched to more than 250 computers, mostly thin clients. Northwood also progressed from one outdated server that tended to overheat, to a few servers, and then to 27 servers.
Those improvements added to Northwood's efficiency and productivity, as well as the quality of care and, in turn, contributed to the organization's excellent financial performance. The EMR system alone has saved Northwood about $300.000 a year - or more than $2 million since it was implemented in March 2000. High-quality patient care and financial performance have transformed Northwood from an organization on the brink of bankruptcy to a worldclass healthcare provider.
Jim Wallace is a freelance writer. More information about Northwood's technology and management infrastructure is available at www.northwoodhealth. com. Northwood is a member of the Mental Health Corporations of America.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Restarting a Provider Organization. Contributors: Wallace, Jim - Author. Magazine title: Behavioral Healthcare. Volume: 27. Issue: 8 Publication date: August 2007. Page number: 26+. © 2009 Vendome Group LLC. Provided by ProQuest LLC. All Rights Reserved.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.