Medical Economics

Medical Economics® Archive May 24, 1999

A shopper's guide to practice management software

By Brad Burg
SENIOR EDITOR

Maybe you're getting ready to automate your practice's scheduling and billing. Or perhaps you're thinking about replacing the software you're now using to make appointments and process payments. What should you buy?

Remember that your task is to get what you need, not what someone wants to sell you. You can do that best by following a systematic approach.

First, define your requirements. "Don't focus on computer concepts and terms," says Michael J. Wiley, a practice management consultant in Bay Shore, NY. "Instead, concentrate on what you need to run your office."

Think about your current system--whether manual or computerized. What's good about it? What needs fixing? What do your colleagues and staff like and dislike? Work out a wish list, and a list of problems you'd like solved.

Then start doing research on ways software can help. You're likely to find that today's systems can handle more problems than you suspected. Everything can be improved, from scheduling to coding to billing to collection. (For highlights of what practice management software can do for you, see below).

Even if you've been computerized for years, it's probably wise to talk to a practice management consultant with expertise in this area. "Because the technology is changing so fast," says Wiley, "and because many doctors underutilize the software they already have, they likely won't know all the questions to ask about a new system." Moreover, most doctors also won't know which vendors have good or bad reputations among those acquainted with the territory.

See how the other guy does it

Once you have some idea of what you're looking for, arrange to see it in action. "Try to visit practices that are similar to yours in setup and size," advises David C. Scroggins, a Cincinnati practice management consultant. "Sit down, peer to peer--doctors with doctors, managers with managers--and have your counterparts show you how the software works. Move through the screens and enter data yourself, if possible."

It's not necessary to stick to offices in your specialty, says Neil Bauman, president of ComputerTalk, a publication covering medical software. "What works in a dermatologist's practice can often work for a cardiologist, if they have a comparable number of doctors and patients, and a similar payer mix."

In fact, Baltimore medical-software consultant Ron Sterling argues that the same-specialty approach can backfire. "Suppose you're an orthopedist who does sports medicine. An orthopedist who does workers' compensation might have a very different kind of practice," Sterling says. "In fact, almost everything--from scheduling to coding to billing--could involve different issues. So look for a practice whose business side is similar to yours."

If you have trouble finding practices willing to let you try out their software, check out ComputerTalk's Web site (www.computertalk.com). It provides names and Web sites of vendors who'll put you in touch with doctor-customers willing to share information about their systems. Or you can simply contact local vendors. Of course, they'll send you to satisfied customers, but while you're getting a rundown, you're likely to learn about drawbacks, too--especially if the vendor's not present at the time.

At under $1,000, MediSoft's software includes searches by any patient field, complex transaction entries, and a custom report writer.

Be cautious about following the leaders

Cardiologist David Cislowski, of Visalia, CA, has used Medical Manager software for years. He doesn't consider the popular system perfect, and he knows it isn't cheap. But, says Cislowski, "I don't mind paying $20,000, plus several thousand every few years for upgrades." His reason? "You're safer with a well-known brand."

Many consultants agree. First, the software with thousands of installations today is likelier to be around tomorrow. With computer software, that's critical. No acquisition affects as many aspects of your practice, or requires more of your time and energy. You really want to avoid starting over. And of course, the bigger players will probably be best positioned to integrate their products with other software packages as the health care field continues to grow and change.

But well-known vendors don't necessarily carry worry-free systems. For example, Physician Computer Network (PCN) may have more installations than most vendors; but you can't simply take that as a gauge of popularity, Wiley says. "Actually, PCN's customer base reflects its purchase of other systems--some of which, we expect, the company won't be supporting anymore."

So make sure you check on the current situation. In the past, Medic software's report function--a crucial part of every system--wasn't very flexible, according to consultant Ron Sterling. But the vendor, Medic Computer Systems, says it now offers an add-on that allows great flexibility in data selection and reporting.

All told, Sterling advises skepticism about software in general: "You can't assume that any company is necessarily right for you, even when it's an established player."

Support and training are as important as the software

The most significant factor in choosing among practice management software packages, the experts say, often isn't the software itself; it's support. And support varies not just by vendor, but by location.

Opting for a big company doesn't guarantee great support. The Medical Manager system, for example, has often relied heavily on local dealers to assist customers. "And some of that help has been criticized as inadequate," says Scroggins, "though the company is evidently becoming more centrally organized."

Practice management consultant James A. Kimble, meanwhile, notes that Medic hasn't always gotten high marks for service in every locale. "You have to investigate the reputation of companies in your area," stresses Kimble, who's based in Toledo. Software analyst Vincent J. Hudson of Menlo Park, CA, adds this caution: "If you don't have a system that's well-supported, you don't have a system."

You won't get full value, either, if your system's underutilized. So don't scrimp on training. "Many vendors include only 30 to 40 hours of training with a software package, but I'd recommend at least 100 hours," says Wiley.

It's also wise to postpone much of the training until after the software has been in place for a while. "Staffers can't learn a system all at once," says practice management consultant Mary Jean Sage of San Ramon, CA. "When the training is all done at the start, fine points usually aren't covered. And if they are, they're forgotten by the time everyone has mastered the basics."

You can keep costs down--to a degree

What can you expect to pay? High-end software costs up to $20,000; hardware and training could easily double that price. A soloist might not pay much less, since every physician's office requires at least the basic elements of practice software. (For more on the subject, see chart below.)

If you prefer to go low-budget, there is an approach available. "MediSoft produces software whose priciest version costs under $1,000," says Vicky Tuttle, a practice management consultant in Lansing, MI. Though the support offered isn't as extensive as what some other vendors provide, Tuttle notes, she has clients who have run practices for years with this product. MediSoft even has some advanced features, including the ability to handle multiple payers.

For more expensive packages, haggling over price is a time-honored way to save money, notes Scroggins. He also advises letting vendors know you're shopping around.

"Electronic claim filing not only is fast, it can be very cost-effective compared with paper processing," says Tuttle. Software systems often charge per claim filed, but, of course, claims submitted manually incur expenses--for paper, postage, labor, and so forth.

If you decide to go electronic, comparison shop; that per-claim charge varies from about 25 cents up to $1. And some vendors don't charge for submitting to major payers, like Medicare and the Blues. There are other variables, too. With InfoSys, for instance, you pay either 32 cents per claim or a flat rate of $50 per doctor per month.

A shopper's checklist: some must have features

Today, software can do just about everything connected with the business side of running a practice. Despite some differences among successful packages, all of them have the basic features that doctors need. Here's what to look for:

Billing

Coding. "Getting control of coding is essential for a practice system," says Toledo practice management consultant James A. Kimble, "especially in today's fraud-and-abuse climate." A good system might alert staffers that they've checked inappropriate procedures for certain diagnostic codes, so corrections will be done early.

But be cautious about assuming a system's information is accurate, especially if it hasn't been recommended to you by a user or a consultant who knows it well. "Some packages are blatantly incorrect," says Patricia White, an associate of Kimble. "In dealing with office-visit coding, one referred to 'review of symptoms' instead of 'review of systems.' "

Billing. When an office visit ends, the software should allow you to print a charge slip indicating what the patient owes, including prior balances, says White.

Multiple insurers. "Some software can handle only two insurers per patient, which is simply inadequate," says practice management consultant Mary Jean Sage, who's based in San Ramon, CA. People change private insurance, so you may need to bill two companies, not to mention Medicare and workers' compensation. You probably need a program that can handle multiple payers per patient. Medical Manager, for example, can accommodate nine.

Batched entry. You want a software package that allows "batched entry" of payment, meaning that all the posting can be done at once when a payer sends a large check for several claims. When software doesn't allow batched entry, Sage notes, "you have to re-enter the check number for each patient whose claim is part of the payment."

Open-item posting. It's essential today to track charges by item, especially when several payers may be involved for one patient. "By focusing on the item, the software lets you trace exactly what happened," says Cincinnati practice management consultant David C. Scroggins. "Some older software packages track charges by total patient balance, not by item."

Scheduling

Data entry. Diana McCracken, head of billing in a Sicklerville, NJ, internal medicine practice, notes that some software packages require a lot of screen-jumping simply to enter a new patient. "That annoys employees and makes errors likelier," she says. "You shouldn't have to access more than a screen or two to get the job done."

And don't underestimate the importance of the irritation factor. A staff that finds a system difficult to work with may not use it fully.

Counting visits. "Suppose an HMO says a referral permits only three visits to a dermatologist," says White. "Programs like Medical Manager will alert that specialist on the second visit, so the patient can be cautioned."

Juggling visits. Some scheduling software can print out appointments by doctor, patient, or day. Some allow double-booking, for doctors who want that, Sage notes. Some will refuse to schedule appointments during a doctor's regular Tuesday hospital meeting at 12:30. "Some software even tracks which staffers have made which appointments," Sage adds, "so that if errors occur you can quickly find out who needs more training."

Recalls and reminders. "The best systems print postcards or labels automatically, to send to patients needing return visits," notes Lansing, MI, practice management consultant Vicky Tuttle. "That's a huge help, especially for practices that schedule many six-month follow-ups or annual checkups." Some systems, Kimble notes, can even remind patients by automated phone calls; the recorded voice of a staffer may be used to create the calls.

Practice Analysis

RBRVS work units. "Using work-unit figures, a system should be able to compare reimbursement patterns for different sorts of patients, including those from various plans," says Mark H. Spohr, a former ER physician who's now a software developer in Tahoe City, CA. "Doctors are often surprised to find they're making less than they think from a plan--or even losing money on it." If your software package doesn't offer every report you'd like, Spohr notes, "find out whether you can put the numbers into a spreadsheet and generate the exact report you want."

"Aging" reports. Software should be able to break overdue bills down by payer, or even by patient. "At one time, some systems couldn't provide good reports on balances owed by individual patients," says White. "But now you should expect that."

Productivity. You might want to see how many level 3, 4, or 5 visits are being generated by the practice--and perhaps by each doctor. "Then you can compare these with HCFA figures for physicians in the same specialty," says White.

Summaries. Complexity may be impressive, but simplicity is more practical, so look for it. "Good systems can often boil things down to one summary sheet," notes Spohr.

Be sure to take a careful look at the reports and see that they provide the information you need. Indeed, practice management consultant Michael J. Wiley of Bay Shore, NY, recommends you refer to these specifics in your contract with a vendor. "Otherwise," he cautions, "you may have to obtain expensive 'customized' reports later."

What about the new world of EMR?

How concerned should you be, when shopping for practice management software, about electronic medical records?

If you're smart, you'll be very concerned. Many consultants emphasize that the EMR will one day become standard. So even if you're not ready to make that leap, you should be anticipating the day when you will.

If you buy your software from a major vendor, it will most likely be compatible with an EMR package from that vendor and perhaps with others as well. But it might not be able to accept billing codes or other data from the EMR or send patient demographic data to the clinical system. So keep electronic medical records in mind, and make sure that whatever you buy now will give you a leg up when you go shopping for an EMR system. The chart below will give you some pointers.