The federal government is phasing in the biggest package of procedural changes to hit healthcare in nearly two decades, requiring transformation of information management on a tremendous scale.
But the transformation may be slow to start and slow to advance to the A-list of executive initiatives, at least among providers and physician practices. Regulations may be falling from the sky, but these executives are preoccupied with other issues exploding around them.
The Health Insurance Portability and Accountability Act of 1996 includes measures to standardize and computerize the business transactions of healthcare billing, claims processing and reimbursement. The law also dictates that patient data be transmitted securely and handled confidentially, all of which will require fundamental changes in administrative operations and information systems for most providers.
HCFA continues to arm and launch regulations, each with a compliance timeline of two years from the date of final issue. In those two years, the effect of each rule on a healthcare organization has to be investigated, pinpointed and planned for, followed by the actual investment in information systems and administrative reorganization necessary to transform the way business is done.
But despite plenty of warnings from experts that the task is huge and the timeline short, getting HIPAA initiatives beyond the investigative stage could be an uphill fight this year because of other items needing management response.
When executives see HIPAA as yet another project, it competes for their attention with a host of threats to revenue and operating margins, including the Balanced Budget Act of 1997, HCFA scrutiny of billing practices, the transition to a prospective payment system for outpatient services, efforts to encourage efficiency in physicians' use of resources, and a varied and detailed list of managed-care contracting issues.
Vendors and consultants marketing HIPAA-related services will have to demonstrate the ways in which aspects of regulatory compliance serve immediate priorities.
For example, standardized electronic transactions can help providers cut the cost of claims processing and denials, eating less into net revenue and quickening cash inflows. And the secure transfer of patient information can remove obstacles to Internet exchanges of data with doctors, which can increase timely access to test results and lessen the propensity to reorder tests already on file somewhere.
Providers that take the HIPAA challenge to heart will fuel a miniboom in information services focused on claims processing and insurance-coverage details and perhaps data security as well. But these capital investments are likely to be at the expense of clinical systems that supply information for better patient treatment.