Electronic medical records save time, money and paperwork

Star Tribune (Minneapolis) (MCT) - Mike Walsh left the operating room and made a bee line for the computer.

The orthopedic surgeon at TRIA Orthopaedic Center in Bloomington, Minn., had just finished fixing a patient's shoulder and now entered information into the computer that will allow the hospital to get paid by the insurer.

In the past, Walsh would have had to dictate his notes, get them transcribed, enter the proper Medicare reimbursement codes for each procedure in the operation, and fill out mounds of paperwork. Now, thanks to ProVation software, made by Minneapolis-based Wolters Kluwer Health's Clinical Solutions unit, the hospital can bill the insurer even before the patient leaves his room.

"The turnover is quite quick," said Walsh, noting it would normally take the hospital several days to figure out how much to charge payers for its services.

Health care information technology is not exactly the stuff you see in the television drama "ER," but the complex process of documentation, billing and reimbursement are the wheels that alternatively drive (and often stall) the cumbersome health care system in the United States. The country may boast some of the best and most innovative medical technology in the world. But in most cases, patient records are still pieces of paper clipped to a folder and stored in a filing cabinet.

Only 15 to 20 percent of physician offices and 20 to 25 percent of hospitals use electronic medical records, or EMR, according to a study by the Rand Corp., a think tank based in Washington, D.C. The study estimates that EMR could save more than $77 billion in efficiency costs a year by reducing patients' length of stay and the amount of time doctors and nurses devote to administrative tasks such as billing and updating patient records. About $900 million comes from reducing the need for transcription services.

President Obama's recently passed stimulus package devotes $20 billion to health care IT and pushes government agencies, doctors and hospitals to adopt EMR. The Information Technology & Innovation Foundation estimates a $10 billion investment in health care IT a year could produce 212,000 new or retained jobs.

"We're pretty confident that we will be a beneficiary of the stimulus," said Sean Benson, a co-founder of ProVation who is now vice president of consulting. The bill "wants to ensure quality (in health care) and eliminate redundancy. That's what we are trying to do. We anticipate a very large boon to our business."

The Twin Cities could also greatly benefit from this emerging industry, given the presence of medical device companies, an experienced IT workforce and large insurers like UnitedHealth Group, Medica and HealthPartners, said Vance Opperman, chief executive of Key Investment Inc., which invests in health care start-ups. Over the past decade, several companies specializing in health care IT and EMR have formed in Minnesota, including Ingenix, a division of UnitedHealth, VisionShare, Mednet and Kardia Health Systems, a Mayo Clinic spinoff.

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Wolters Kluwer might seem an odd member of that group. The Dutch-based company, known mostly for publishing textbooks and reference materials for lawyers and accountants, has moved aggressively into health care IT. In 2006, Wolters Kluwer paid at least $40 million to acquire ProVation Medical. The company was founded in 1994 by a University of Minnesota medical student who saw the need to move from handwritten notes and error-prone transcriptions to one-stop software and Internet files that could be updated easily and economically.

"As a private, venture-backed company, we were able to quietly develop the product to the point now that the market has become much more mainstream. We are at the right place at the right time," said Arvind Subramanian, president and CEO of Wolters Kluwer Health Clinical Solutions.

The ProVation software acts as a sort of TurboTax for doctors, guiding physicians step by step in documenting medical procedures, updating patient records and entering the right reimbursement codes. Errors in coding can cost hospitals a large amount of revenue, because doctors, fearing compliance problems, tend to be conservative with reimbursement, said Chris George, CEO and founder of Think First, a health care IT consulting firm in Topsfield, Mass.

Coding "is hard," George said. "Doctors don't go to school for business or coding. It has become increasingly burdensome for doctors."

Before using ProVation, Walsh said hospital audits of his coding, which is done before billing, estimated his accuracy rate at 80 percent. That means 20 percent of his codes were wrong. Now, he says his codes are 99 percent accurate.

The faster the hospitals complete billing, the faster patients can go home, and the quicker beds would become available to new patients, Walsh said.

ProVation has become an increasingly important product for Wolters Kluwer. The company won't release specific sales figures, but Benson said ProVation has been growing at a double-digit rate every year since its introduction. In 2005, the year before it was purchased by Wolters Kluwer, ProVation broke even on $13 million in sales compared with $4 million in sales in 2002.

Last year, Klas Research, a widely respected research firm that surveys health care professionals across the country, ranked ProVation as the best software in clinical procedure documentation.

ProVation "has delivered in line with our expectations, not just from a financial perspective, but it also has been a critical piece in the puzzle in terms of our strategy for driving leadership in this area," said Nancy McKinstry, CEO of Wolters Kluwer, in an interview.

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Last year, Wolters Kluwer purchased UpToDate, which publishes evidence-based reference information that helps doctors diagnose and treat disease. Benson said Minneapolis-based Clinical Solutions, which will oversee the new acquisition, is working to offer UpToDate and ProVation in a package for doctors. The unit is also expanding into Australia and New Zealand. Clinical Solutions employs 130 people at its offices in downtown's Warehouse District.

"We're very excited about it," McKinstry said. "Minneapolis has become a bit of a hub, one of our key cities in the U.S."

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