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Information technology can support the hospital revenue cycle by facilitating management of clinical, administrative, and financial information within the hospital, and with external partners. In recent years, IT has played an important role in managing and coordinating health services (Chiasson and Davidson 2004). Although the use of IT in healthcare has lagged behind other industries (Menon et al. 2000; US Congress 1995), application of IT in healthcare has grown in recent years (Thompson and Dean 2009). This trend has the potential to improve cost- effectiveness, quality, and accessibility of healthcare services (Chiasson and Davidson 2004; Devaraj and Kohli 2000; McCullough et al. 2010; Schoen et al. 2006), and there are increasing calls to further exploit emerging IT to improve healthcare delivery (Tuttle 1999). IT has also opened up new possibilities of “e-health” through telemedicine and remote patient monitoring, thus allowing delivery of health services beyond the traditional physician’s office or hospital settings (Chiasson and Davidson 2004).

To discuss IT’s role in healthcare delivery in general and in the hospital revenue cycle in particular, we use Davenport’s (1993) framework that discusses the various ways in which IT can improve an organization’s performance. He suggested nine categories representing areas of opportunity for IT-enabled process innovation (Davenport 1993, p50). Using this framework, Table 2.4.1 provides examples of the role of IT in the hospital revenue cycle.

Singh | Dissertation | THE HOSPITAL REVENUE CYCLE 38 Table 2.4-1: The Role of IT in the Revenue Cycle

# Role of IT Description Examples (Related Revenue Cycle Stage/s)

1 Automational

Eliminating human labor from a process

• Electronic prescribing by physicians for outpatients, and delivered directly to pharmacy (patient encounter)

• Computerized checking for possible harmful drug interactions (patient encounter)

2 Informational

Capturing process information for purposes of understanding

• Digitized X-Ray, CT-Scans etc. through picture archiving and communication systems (patient

encounter) 3 Sequential Changing process sequence, or enabling parallelism

• Transformation from paper-based case record to EMR, allowing simultaneous viewing and real-time processing (entire revenue cycle)

4 Tracking

Closely monitoring process status and objects

• Remote monitoring of post-acute and chronic patients in home or community settings (patient encounter)

• Around-the-clock care for critically ill and injured patients in ICU, monitored and managed by remotely located intensivists (patient encounter)

5 Analytical

Improving analysis of information and decision making

Clinical decision-making systems, integrating a medical knowledge base, patient data and an inference engine to generate case-specific advice (patient encounter)

6 Geographical

Coordinating processes across distances

• Telehealth systems, delivering medical services over distance, facilitating knowledge sharing, and distributing complex diagnostic processes and medical decision making across healthcare organizations (patient

encounter)

7 Integrative

Coordination between tasks and processes

• EMR systems, allowing clinical and non-clinical hospital staff to view and exchange patient care related

information (entire revenue cycle)

8 Intellectual

Capturing and distributing intellectual assets

• Centralized health portals, allowing healthcare professionals and patients to share and analyze information, complete transactions and workflow, and collaborate using email and other internet applications (entire revenue cycle)

9 Disintermediating Eliminating intermediaries

• Personal health records, allowing individuals to maintain and control access to health and medical history

Singh | Dissertation | THE HOSPITAL REVENUE CYCLE 39

from a process (registration, patient encounter)

• Self check-in and registration by patients in dedicated kiosks in hospitals (registration)

• Self-service appointment scheduling by patients (registration)

Gurbaxani and Whang (1991) suggested a similar framework outlining five roles of IT in any organization: 1) operational, 2) transaction processing, 3) decision support, 4) monitoring and performance evaluation, and 5) documentation and communication. One can also draw upon their framework to describe the role of IT in the hospital revenue cycle. As frameworks like these suggest, IT can play an important role in information management in the hospital revenue cycle. For example, most EMR systems have built-in or add-on modules that facilitate information management. Some of these EMR systems may have linkage to a diagnosis-related grouping application to facilitate the documentation and coding activities. A coding clerk can use this application to identify appropriate codes to charge for a particular procedure (for example, a knee arthroscopic surgery). IT-enabled information management can also support the organization of the revenue cycle by sharing activity-level information across different stages of the revenue cycle and identifying opportunities for improvement of the overall revenue cycle. For example, the billing clerks can use an IT application (which could be a module in the EMR system, or a dedicated application) to share exceptions identified in specific claims (such as missing or incorrect payer information) with the registration clerks. This sharing of information across the revenue cycle can reduce delays in processing of claims, improve cash flow (by reducing rejected claims), and thus improve overall hospital performance.

The increasing role of IT in health delivery is also represented in the growing literature on health-IS (Chiasson and Davidson 2004; Cho 2007; LeRouge et al. 2007). A recent special issue in the Journal of the Association of Information Systems (February 2011), a forthcoming special issue in Information Systems Research, and focused journals on health informatics such as the

Journal of American Medical Informatics Association represent this increasing focus on health-

IS. However, the main emphasis of existing literature has been on improving clinical IS, including EMR (Davidson and Chiasson 2005; Hanseth et al. 2006; Lapointe and Rivard 2005), CPOE (Davidson and Chismar 2007), PACS (Paré et al. 2005), clinical decision support (Devaraj and Kohli 2000), and telemedicine (Cho and Mathiassen 2007; Paré et al. 2007; Paul

Singh | Dissertation | THE HOSPITAL REVENUE CYCLE 40 and McDaniel Jr. 2004). The preponderance of clinical IS (mostly related to the patient- physician encounter) in the examples shown in Table 2.4-1 also support this observation. A recent study of hospitals in Florida may point to the reason for this emphasis of IT on clinical decision-making systems. In this case, Bhattacherjee et al. (2007) found that adoption of IT in healthcare had differential performance effects and only clinical IT had a significant positive impact on the hospitals’ operational performance.

The literature on non-clinical IT-enabled information management is sparse. Despite the fact that automation of billing activities was among the first IT application in hospitals (Fisher 1984; Lindberg 1979), and billing remains among the most commonly used IT applications by physician offices and hospitals (Audet et al. 2004), it is unfortunate that littleattention has been paid to IT-enabled information management in the revenue cycle in the health-IS literature. While most EMR systems have functionality relating to the revenue cycle (such as billing, registration, and automated payment posting) that is built in or available as add-on modules, few applications integrate the entire revenue cycle or enable re-organization through identification of improvement opportunities in revenue cycle workflows. In addition, although Davenport’s categories about the role of IT in organizations apply to clinical as well as non-clinical information management in the hospital revenue cycle, we did not find any studies that focus on such applications. Because of the under-emphasis of current health-IS literature on information management in the hospital revenue cycle, there is no comprehensive view of using IT to support or reorganize the revenue cycle.