A client recently asked an Operational Readiness Assessment team leader at Impact Advisors why it was important to implement the team’s recommendations PRIOR TO the upcoming transition to Epic. What a great question that all systems should ask themselves before committing to such a substantial financial investment!
Before digging into the why, let’s start with a breakdown of the timing and resources needed to successfully implement Epic. The average implementation cost varies depending on the size of the system (ranging from $10M for a small community hospital to $100+M for a large multi-facility system). The cost typically includes software licensing fees, infrastructure upgrades, implementation services, ongoing maintenance and support, compliance requirements, and user training. Additionally, internal resources allocated throughout the process are estimated at 15-20 hours per leader per week (from Epic ARCR Playbook). The average healthcare manager’s annual salary is $73,230, which equates to around $48,057 for EACH leader throughout an 18-month implementation. Using an example of a 250-bed hospital, multi-specialty clinic health system with 25 department leaders involved, the cost to implement is approximately $36M. You can see how easily this project can become cost-prohibitive, especially considering most leaders already have full plates heading into the implementation and will need additional staff to assist.
There are a number of valid reasons to make operational improvements prior to an Epic implementation; we’ll focus on three:
1. Adjusting to Changes DURING the Build Process
Proactively aligning to Epic foundational workflows will ease the decision-making process and allow staff more time to adjust to the multitude of changes that come with implementation. Change management is easy to overlook as organizations focus on the technical aspects of implementation, but it can have a major impact on the process. Engaging every staff member in the how and why the change is being made will go a long way toward ensuring buy-in and acceptance of the new system.
Continuing with the example above, let’s assume the system does not have a dedicated Revenue Integrity team. Epic views this as a vital function and bases many revenue cycle workflows on two of the main components RI teams are responsible for – charge generation and reconciliation. Ensuring this team is fully staffed and trained and has facilitated training of all clinical teams on the importance of collaboration will set the system up for success heading into implementation.
2. Efficiency Can Help Avoid Delays and Rework
The second benefit of optimizing workflows prior to implementation is efficiency. Ensuring every process, from clinical to the entire revenue cycle, is operating as efficiently as possible can help avoid delays and rework throughout the implementation and stabilization periods. The phrase that comes to mind is “An ounce of prevention is worth a pound of cure.” Even modest improvements in several key areas could save the organization time and money down the road.
3. Financial Impact From an Improved Revenue Cycle
One of the most significant benefits of making changes prior to an Epic implementation is the financial impact from a revenue cycle perspective. Creating more efficient and standardized workflows leads to less revenue leakage, higher payer reimbursements, fewer denials, and mitigating compliance risk. This will help offset the cost of implementation and decrease the time to see a return on investment while protecting the organization. In our example above, let’s assume the system implements multiple operational improvements and can reduce the project time from 18 months to 12. This would equate to a savings of over $400,000 from leader salaries alone!
The Bottom Line
The sooner efficiencies can be implemented prior to an Epic implementation, the sooner benefits will be realized, and the more significant overall gains will be. In this tight margin environment health systems are experiencing across the industry, these benefits can’t come soon enough.
Impact Advisors partners with clients to drive engagement, adoption, and lasting change through our Revenue Cycle Operational Engagement Program.
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