Magazine article Risk Management

How UMass Memorial Hospital Cut Claims Costs with a New RMIS: One of Massachusetts' Largest Hospitals Invested Its Money and Time into Building a Risk Management Information System (RMIS) from Scratch-And Is Now Enjoying the Savings

Magazine article Risk Management

How UMass Memorial Hospital Cut Claims Costs with a New RMIS: One of Massachusetts' Largest Hospitals Invested Its Money and Time into Building a Risk Management Information System (RMIS) from Scratch-And Is Now Enjoying the Savings

Article excerpt

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With eight hospitals, 1,125 beds and 12,350 employees, UMass Memorial Health Care is the largest healthcare institution in central and western Massachusetts. In 2002, the Worcester-based hospital decided it would expand further. But not physically. Instead, it would undergo an ambitious venture to begin to self-administer its self-insured workers compensation program. At this point, one thing became clear: UMass Memorial would need to purchase a risk management information system (RMIS) to handle its vast claims load.

The hospital put out a competitive bid that included a list of key functions and technical requirements. It needed a system capable of handling workers comp claim administration, aggregating claims data into a single database, reporting injuries and incidents, and writing checks. After a request for proposal process, UMass Memorial opted to purchase a system from the Chicago-ased CSSTARS, a large RMIS provider.

Enter Denise Nadler.

As head of the occupational injury management department, she had the dual responsibility of managing the new program and the RMIS tool. Together, Nadler and her team began to navigate the sometimes-rocky currents as they sought to control workers compensation costs within a notoriously complex, regulation-laden state.

It wasn't all peaches and cream at the beginning. Like many clients, UMass Memorial assumed that a RMIS would immediately solve all of its problems out of the box with minimal configuration. But buying a RMIS is not like buying a simple application where you simply push play and it does all the work. It is not Microsoft Office. Instead, it is a highly complex, but adaptable, system that requires careful integration into a company's existing operations.

It didn't take long for Nadler to find out that tailoring a system to the data and workflow requirements would take some real effort on the part of her team. To begin with, she and her staff had to look at all of the medical codes to identify which were needed to create the best structure for analyzing losses.

It was a significant challenge. There are more than 200 eye diseases alone that could be coded, for example. The system certainly had the capacity and ability to code all those eye diseases. The real question was: what would make sense from a business standpoint? After all, a RMIS is supposed to enhance a risk manager's ability to do her job, not confuse it with unnecessary details.

Designing a proper coding scheme, organizational structure and reporting system is a time-consuming--but critical--function. No vendors have the capacity, nor the specific medical training, to do this out of the box; their expertise is in system and database design. A RMIS vendor is much like a general contractor following the lead from the project's architect. If the vendor acted as the architect, everybody would be forced to live in the exact same type of house.

In this case, Nadler was the architect. And in order to build the right structure, she had to get over some growing pains in the first few years with regard to the hospital's relationship with its vendor. "Learning the ins and outs of our client's business processes is the key," said Pat O'Neill, managing director of CSSTARS Americas. "Making sure we've got the right people and personalities to create a good team dynamic helps make the overall process successful."

There were also some early vendor support issues. Just as important as system functionality is the team that supports a client. …

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