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Process Re-engineering Can Produce Results, Lumeon Finds

Posted on November 19, 2018 I Written By

Andy Oram is an editor at O'Reilly Media, a highly respected book publisher and technology information provider. An employee of the company since 1992, Andy currently specializes in open source, software engineering, and health IT, but his editorial output has ranged from a legal guide covering intellectual property to a graphic novel about teenage hackers. His articles have appeared often on EMR & EHR and other blogs in the health IT space. Andy also writes often for O'Reilly's Radar site ( and other publications on policy issues related to the Internet and on trends affecting technical innovation and its effects on society. Print publications where his work has appeared include The Economist, Communications of the ACM, Copyright World, the Journal of Information Technology & Politics, Vanguardia Dossier, and Internet Law and Business. Conferences where he has presented talks include O'Reilly's Open Source Convention, FISL (Brazil), FOSDEM, and DebConf.

A rigorous look at organizational processes, perhaps bolstered by new technology, can produce big savings in almost any industry. In health care, Lumeon finds that this kind of process re-engineering can improve outcomes and the patient experience too–the very Triple Aim cited as goals by health care reformers.

A bad process, according to Robbie Hughes, Founder and CEO for Lumeon, can be described as, “The wrong people have the wrong information at the wrong time.” One example is a surgery unit that Lumeon worked with on scheduling surgeries. The administrative staff scheduled the surgeries based on minimal contact with the clinicians–a common practice throughout the industry that might seem efficient. But unfortunately, people who are uninformed about the clinical aspects of the surgery make sub-optimal plans, directly leading to poorer outcomes. The administrative staff don’t use rooms and other resources effectively, and stumble over risks that the clinicians could have warned them about. Lumeon uncovered the problem during a single morning meeting with this particular hospital. By enabling the clinicians to better coordinate with the scheduling staff, the surgery unit more than doubled its presurgical screening capacity without asking for increased funding.

I recently wrote about a controversy over patient loads that erupted into a major political controversy (rarely a formula for rational process engineering). Thus, when talking to Hughes, I was sensitized toward the importance of good processes. The health care field is stuck in the kind of blindness toward process seen in the fictional medieval setting of Monty Python’s Jabberwocky, but some of the more forward-thinking institutions are doing the hard work of streamlining their processes. These include:

  • Cleveland Clinic, which reorganized their recommendations for patient behavior before and after surgery, called Enhanced Recovery After Surgery (ERAS)
  • BUPA, a major British insurer that has a formal process model
  • U.S. giant Kaiser Permanente, which uncovered enormous waste when clinicians search for supplies

The higher you rise above the scene, and the more you can think about the system rather than one silo, the more efficient you can become. The Kaiser inquiry covered the entire supply chain for each hospital. BUPA is fortunate to possess actuarial information that help it assign a predicted cost and likely outcomes to cancer cases, where the company can assign caretakers to patients as needed throughout the whole recovery process.

Another useful scope is the sequence leading from a patient’s initial contact to a successful outcome, a process or “pathway” that goes far outside the hospital’s walls and beyond the time in the doctor’s office or surgical unit.

Typically, Hughes says, one day is enough to find process improvements. Through interviews and through observation–because staff misunderstand and misrepresent their own processes–Lumeon can develop a process map, expressed visually like the post-operative pathway in the following figure.

Typical pathway, describing post-operative process

*Click to see Full Size – Typical pathway, describing post-operative process

The best motivation for taking a longitudinal view, of course, is risk-sharing. A doctor who will be rewarded or penalized for outcomes will be willing to invest in producing better outcomes. Similarly, an insurer such as BUPA will be motivated to reduce readmissions if it has a long-term responsibility for patients. Bundled payments are a round-about, highly diluted approach to risk-sharing.

Fee-for-service models mean having to define a deliverable that everybody can understand and achieve. A bundled payments model is far from this. UK outcome measures truly place risk on the provider. In the US, bundled payments dilute risk.

But Lumeon can find ways to improve processes even within a fee-for-service model by enabling health organizations to guide patients more successfully through their entire health journey. For instance, with the company’s Care Pathway Management solution, doctors can remind patients to come back in five years for a colonoscopy, thus potentially saving lives while ensuring the institution’s own revenue stream under fee-for-service. Other simple goals can be to make sure the patient has a complete list of tasks prior to surgery (such as not to drink water in the morning) in order to eliminate late starts or last-minute cancellations, which are very expensive as well as frustrating. Predictably, Lumeon finds a certain set of common problems over and over, regardless of medical disciplines or institutions. Hospitals sometimes optimize within each department, but not across multiple departments. Usually this change comes down to maximizing compliance with a known protocol, rather than trying to use sophisticated artificial intelligence techniques to look for new approaches that theoretically offer benefits.

Lumeon also works to minimize disruptions to existing workflows. Large institutions such as Kaiser can tell everybody to adopt a whole new way of doing things, but staff within most institutions might be more resistant. The staff can still be trained to do things like create quality standards and follow them, or call patients at certain intervals or after a procedure, but these processes need training before they become reliable and predictable. Culture and habit, not technology, turn out to be the biggest barriers to process improvement.

Software, too, must be molded to current ways of working. We all experience little tolerance in our work or everyday lives for non-intuitive computer interfaces that appear to be putting barriers in our way. For instance, I have never forgiven my phone vendor for changing the most common activity I do on the device (turning airplane mode on and off) from a three-step process to an eight-step process.

The most effective persuasion is evidence-based. If an institution can get one department or doctor to adopt a new process, and can then collect data showing that it improves outcomes and cut costs, other departments are likely to follow along. In contrast, staff are likely to be oblivious to a study from a journal with statistics from clinical trials, no matter how scientifically valid the study may be. Hughes says that resistance to change is often attributed to doctors, but he thinks that this resistance is primarily caused by change being forced on them without evidence. With proper, objective data supporting a change, doctors are often the first to lead new initiatives in the spirit of delivering better patient care.

New kinds of records are needed to keep track of outcomes and make use of the valuable data they provide. Ideally, Lumeon would integrate with electronic medical records, but the EMRs are rarely set up to hold and provide such information. Instead, Lumeon installs software on top of the EMR, calling their addition an “agility layer.”

Hughes identified two common practices that can interfere with process improvement. The first is the growing focus around “patient engagement,” which can be as superficial as sending reminders for online check-ins or as fundamental as giving patients access to data.

However, patient engagement by itself is not sufficient to deliver meaningful process improvement. Patient engagement measures can make a difference as an integral part of an effective operational process. For instance, there is no point in getting patients to fill in data online if it’s not going to be used by the clinicians.

Second, the focus on documenting compliance with standards, such as meaningful use, often becomes a documentation exercise rather than a way of improving care. Unfortunately, this is a problem that is seen all over the world by well-intentioned governments and funders who want to offer incentives for good behavior by paying for better processes. But this all too often ends in additional costs and effort to administer the care, rather than actually focusing on the basics.

7 Strategies for Revenue Cycle Management Success

Posted on August 17, 2015 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Today I came across a whitepaper called 7 Strategies for Revenue Cycle Management Success. I continue to be amazed by how many practices can benefit from better revenue cycle management. So much so that hundreds of companies thrive on the back of a practice’s revenue. This is true for a number of EHR companies as well.

For those who don’t want to download the full whitepaper with all the details on the 7 strategies, here’s the list:

Strategy #1: Monitor Payments
Strategy #2: Perform Financial Clearance
Strategy #3: Collect from Patients
Strategy #4: Manage Denials
Strategy #5: Establish Employee Expectations
Strategy #6: Avoid the Snowball Effect
Strategy #7: Report on Key Performance Indicators (KPIs)

As I look through this list and read through the whitepaper, all of it just points to quality management of processes. There’s nothing on the list that’s rocket science. It’s just taking the time and effort to make sure that all of your practice’s processes are well organized and thorough. As you can imagine, that’s a problem for many organizations. That’s why so many practices outsource this work to another company.

When I consider where revenue cycle management is headed, I wonder how these new value based reimbursement models will impact revenue cycle management companies. My guess is that many of them will just see it as the same process applied to new clinical values and measures. However, I think that value based reimbursement is going to require companies to go much deeper with a practice. If the practice is now responsible for a population of users and not just the ones they’ve seen in their office, that’s going to take a very different skill set.

What is clear to me is that many practices are going to need some help from an outside company even in a value based reimbursement environment. I’m just not sure which companies will be providing those services.

The Fundamental Challenge of ACOs

Posted on March 31, 2014 I Written By

Kyle is CoFounder and CEO of Pristine, a VC backed company based in Austin, TX that builds software for Google Glass for healthcare, life sciences, and industrial environments. Pristine has over 30 healthcare customers. Kyle blogs regularly about business, entrepreneurship, technology, and healthcare at

I’ve been openly bullish on ACOs and capitated payment models. The only way to achieve the triple aim – quality, cost and access – is to create a system that is structurally incentivized towards those ends. The fee-for-service model will never be structured in a way that incentivizes the triple aim. On the other hand, ACOs do.

Early ACO data is mixed. Although some organizations succeeded in lowering costs and improving outcomes, about 1/3 dropped out of the ACO program entirely, and another 1/3 reported no significant cost or quality changes. Only 1/3 were “successful.”

Why? Why did some organizations succeed where others failed? What did each organization do differently? It’s been proven that some organizations can succeed under this model. But not everyone.

ACOs are disruptive to fee-for-service payment models. ACOs invert incentives. They invert how every employee should think about their job in the context of the larger care delivery system. In ACOs, healthcare professionals are implicitly asked to think about preventative care, which tends to lead towards both cost and quality improvements. On the other hands, in a fee-for-service model, healthcare professionals are only incentivized to simply treat the patient in front of them with no regard for prevention or cost.

When the board of directors of a given organization recognizes the need to change the course of a business, the board usually replaces the CEO. After a new strategy is devised, the new CEO typically replaces most of the executives and lays off a significant number of the existing staff. This accomplishes a few things:

1) reduces the burn, making the organization leaner and more capable of pivoting
2) replaces lots of senior and middle management, who were trained and wired around the old business model, and who may conspire against the new model if they don’t believe in it
3) sends a signal to the remaining staff that management is serious about change

Although this plan doesn’t guarantee success, it’s fairly common in large organizations because it can create impetus to break from the inertia of the status quo. The only thing worse than going after the wrong business model is maintaining one that’s failing.

This of course begs the question, how are providers adopting ACOs? Management at provider organizations that have adopted the ACOs are early adopters. They are pioneers. They are leaders. They can see a new, better, ACO-based future. The last thing management at these organizations is going to do is fire themselves after deciding to transition to an ACO.

In light of the above, I am particularly impressed by the early success of the ACO program. Only 1/3 dropped out. Given the fundamental change at hand, I would consider the early data a harbinger of better changes to come. I suspect that almost all of the remaining ACOs will see more significant improvements in years 2 and 3 as they mature and refine processes around value.

EHR Benefit – Eligibility for Pay-for-Performance

Posted on May 9, 2013 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

It’s time for the next installment in my series of posts looking at the long list of EHR benefits.

Eligibility for Pay-for-Performance
I think that this is a really scary topic for most doctors. It’s not that a doctor is afraid of being reimbursed for the way they perform. The problem with pay for performance (ACO if you prefer) is that we have no idea what that’s really going to look like. The unknown is scary and a real problem. A change as dramatic from fee for service to pay for performance is an enormous shift and we still have very little idea how that shift is going to happen.

However, as one person told me, “That train (the shift to pay for performance) has already left the station.” In fact, I was talking with the former CEO of a major EMR vendor and he suggested that the shift is going to happen a lot faster than most of us realize. If we assume that this shift is going to happen, then doctors and healthcare better be prepared.

I believe having an EMR will be the only way a clinic can participate in pay for performance.

I make this assertion, because how else are payers going to measure your performance if they don’t have the data on how you’re performing? I’ve never thought of this before, but the EMR could become the performance measurement tool for doctors. Trying to flintstone your performance in a paper world is just not going to happen. The data collected in an EMR (and possibly other software) is going to drive the performance metrics which will drive the payments.

Think about what that means to a clinic. If you don’t have an EMR, you will miss out on the pay for performance payments.

I imagine many that read this will discount the shift that’s going to happen. That’s a fair position to take, but one that I think will come back to bite you. If the shift in payments doesn’t happen, then you won’t have to worry. However, if the shift to pay for performance has left the station, then you’re going to be at a tremendous disadvantage.

Healthcare data is going to drive a lot of things in the future of healthcare. Pay for performance is one of those things. Physicians who don’t have that data available in an EMR or other electronic format are going to face stiff challenges.

ACO Model Risks and Rewards

Posted on February 29, 2012 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I haven’t heard a single person say that the ACO (Accountable Care Organization) model is not here to stay. In fact, everyone that I’ve talked to is completely confident that healthcare is heading down the tracks of some sort of quality care model and away from our current fee for service model. The only real question is what form these ACOs are going to take.

With this as background, let’s consider something about ACOs that I haven’t really heard many (if any) people talking about: the risks and reward profiles of being an ACO (or part of an ACO).

I’ll save the detailed list of risks and rewards for a future post, but instead want to highlight how the risks and rewards of an ACO are quite different from our current fee for service model. In our current model, when you provide a service to a patient you have a pretty good idea of what the reward for that service is going to be. Sure, there are intricacies of insurance billing, but for the most part you know what you’re going to be paid for the services you rendered. There’s not very much risk associated with providing that service since the fee for that service is known. We could argue about whether the reward is worth it or not, but in the current model the reward is pretty solidly defined. You don’t get paid more for doing a better knee surgery than someone else. The payment is the same.

The opposite turns out to be the case in a true ACO world. Providers that are caring for a community of people will be rewarded based on the quality of care that they provide that community (at least that’s the idea). That means that providers and ACOs are taking on the risk associated with the care they provide. Bad care = less reimbursement. Better care = more reimbursement. While the associated risk is higher for providers under an ACO, so are the rewards. A provider that provides better care for their community has the possibility of making more money for the care they provided.

As an entrepreneur I must admit that the idea of getting paid more for doing something better than someone else is beautiful. This is even more true in healthcare where I love the idea of a doctor getting paid to really improve my health as opposed to getting paid for services that I may or may not need. Although, I can understand how many doctors might not feel the same way I do. Many doctors aren’t entrepreneurs. They just love medicine and patients. What are these types of doctors to do with this new and evolving ACO model for reimbursement?

I think there is a clear option for doctors that just want to practice medicine without the risk or rewards associated with the ACO model. The way they’ll get around this is likely working for someone else. There’s little doubt that there will be many organizations happy to take on the risk and rewards of the ACO model while paying a physician a salary for their work.

One thing seems clear to me: Providers take on a greater portion of risk in an ACO, but they also have the opportunity to take home a significantly higher net reimbursement.