Vertical Market Information Center Healthcare Market 2005 Toshiba America Business Solutions, Inc. Training and Dealer Development Group
Hospital Market Overview General The U.S. continues to spend more on health care than any other developed nation, whether measured as total spending, spending per capita or spending as a percentage of GDP. Per capita expenses were $6,167 in 2004. National Health Care Expenditures 2004 - $1,794 billion. Expected for 2010 - $2,751 billion (Copyright Plunkett Research, Ltd) (Copyright Plunkett Research, Ltd) Healthcare Market Final 11-28-05 1
(Copyright Plunkett Research, Ltd) National Health Care Expenditures for Hospitals in 2004 - $551.7 billion (Copyright Plunkett Research, Ltd) Number of All U.S. Registered Hospitals - 5,764 (American Hospital Association News) Ambulatory Surgery Centers 2004 3,735 Medicare-certified facilities Most procedures performed in such centers are covered under Medicare or by most major health plans. Medicare paid $2 billion to surgery centers in 2003. (MedSource Appraisal and Advisory Services) 2 Final 11-28-05 Healthcare Market
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Hospital Product Line by Type of Business Type of business and product line Home health care services Home hospice care Inpatient hospice care Nursing home service Intermediate care for the mentally retarded Hospital inpatient services, except nursing care services Ambulatory surgical center receipts Hospital outpatient services, except ambulatory surgical center and nursing care services Contract research Merchandise sales Prescription drugs Nonprescription drugs, vitamins, supplements, and herbal remedies Durable medical equipment All other merchandise sales, not specified by type Sales of food and beverages Rental or lease of goods and/or equipment Rental or lease of medical equipment Rental or lease of all other goods and/or equipment All other receipts Contributions, gifts, and grants: Government Contributions, gifts, and grants: Private Investment income, including interest and dividends Rents and commissions from departments and concessions not owned and operated at this institution Appropriations from general government revenues and intergovernmental transfers All other revenue Establishments with the product line 1,394 536 233 951 41 6,279 675 5,588 128 2,147 1,181 231 237 1,294 3,818 966 247 780 2,994 1,143 2,473 3,516 798 677 2,414 (U.S. Census Bureau) 4 Final 11-28-05 Healthcare Market
Hospital Market Trends (IDC) Aging Population The U.S. population is aging rapidly as the baby boomers move into their senior years. At the same time, the life expectancy of seniors is increasing. The growing senior population will place a significant strain on the healthcare system in coming years. Healthcare Market Final 11-28-05 5
Healthcare Costs Rising Healthcare costs have risen rapidly for years and are expected to continue to increase. Total U.S. healthcare expenditures are projected to increase from $1.8 trillion in 2004 to $2.6 trillion in 2010. Health spending in the U.S., at over 16 percent of Gross Domestic Product (GDP), accounts for a larger share of GDP than in any other major industrialized country. Biotech Era We are entering the Biotech Era. Breakthroughs in diagnostics and drug therapies are occurring at a rapid pace, creating financial and ethical challenges along with opportunities. Attempts to regulate controversial procedures are resulting in new state and federal laws that increase reporting and compliance requirements. 6 Final 11-28-05 Healthcare Market
Medical Savings Accounts President Bush is expected to continue pushing the use of Medical Savings Accounts, which are used by only a small number of Americans at present. Two types of accounts are the Health Savings Account (HSA), which combines a tax-free savings and investment account, somewhat similar to a 401(k), with a high-deductible health coverage plan, and a Health Reimbursement Account (HRA), which is a form of healthcare coverage provided to employees by their employer. These new methods of paying medical expenses greatly increase the tracking and reporting required to implement the new payment plans. (Plunkett Research, Ltd) Group Purchasing Organizations Approximately 800 Group Purchasing Organizations (GPOs) collectively contract for about 65 percent of the supplies and equipment purchased by healthcare institutions. The advantage of GPOs is their ability to obtain lower prices, price protection, improved quality control programs, reduced contracting cost, and monitoring market conditions. Approximately 72 to 80 percent of every healthcare (acute care setting) supply dollar is acquired through group purchasing. Estimates place the GPO market for hospitals growing to $257 billion per year and for nursing homes growing to $287 billion per year by 2009. (Knowledge Source Inc.) Electronic Document Filing Only a small percentage of hospital organizations have fully implemented clinical records systems that create true electronic medical records (EMRs). Recent reports show 72 percent of hospitals have no EMR, with only 21 percent having a full EMR1. This data implies that 80 percent of the organizations are using a mix of electronic information systems alongside a combination of computerized and paper-based patient records. These disparate systems, which result in multiple databases, paper files and inconsistent formats, make patient information retrieval inefficient and costly. (Information Management Research) Healthcare Market Final 11-28-05 7
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Patient Involvement Due in part to the amount of health information on the Internet and the rising costs of healthcare, many patients are demanding more involvement in their healthcare decisions. To satisfy these demands hospitals must provide more information on services and procedures and provide carefully itemized bills. They are also increasing their awareness of the types of information and web sites patients are accessing, in order to discount sources providing more disinformation than information. Lack of Qualified Nurses The nursing shortage has a significant effect on the healthcare industry. For example, The Joint Commission on Accreditation of Healthcare Organizations recently reported that nearly 25 percent of all of the medical error reports they receive can be traced through ineffective staffing. (Joint Committee on Accreditation of Healthcare Organizations) Healthcare Market Final 11-28-05 9
Hospitals Regulatory Issues The Health Information Portability and Accountability Act The Health Information Portability and Accountability Act (HIPAA) was enacted in 1996 to provide standards for protecting the privacy of personal health information. It also provides standards for electronic transactions and protects the health insurance coverage of workers when they change or lose jobs. Deadlines for compliance with various aspects of these laws stretches from its inception to April 2006, and understanding the requirements and complying with them is a concern for every health organization. (Centers for Medicare and Medicaid Services) The following terms are often used in HIPAA-related discussions: Patient Health Information (PHI): Any information gathered during the registration, diagnosis, or treatment of a medical condition Covered Entity (CE): Any entity that handles patient health information, including providers, health plans, employers, public health authorities, life insurers, clearinghouses, billing agencies, information systems vendors, service organizations, and universities. HIPAA Rules Privacy Rule: This HIPAA rule requires CEs to take all reasonable measures to ensure the confidentiality, integrity, and availability of individually identifiable patient health information. It applies not just to electronic information, but also to paper and oral information. The Privacy Rule was finalized in August 2002 and became effective for all health plans and healthcare providers as of April 2004. Security Rule: This rule sets standards to provide a uniform level of protection for all health information that is stored or transmitted electronically. It also includes proposals for the use of electronic signatures. This rule was finalized in February 2003. Most health plans and healthcare providers had to comply with the new requirements by April 2005. Transaction and Code Set Rule: This rule standardizes the formats and protocols used for electronic data interchange (EDI). EDI allows medical, billing, and other information to be exchanged and processed quickly and cost effectively. This rule became effective October 2000. Identifier Rule: This rule proposes standards for National Standard Health Care Providers, National Standard Employers, and National Health Plan identifiers. This rule became effective July 2002. (ecopy white paper ecopy and the Health Insurance Portability and Accountability Act ) 10 Final 11-28-05 Healthcare Market
Joint Commission on Accreditation of Healthcare Organizations The Joint Commission on Accreditation of Healthcare Organizations (JACHO) evaluates and accredits more than 15,000 healthcare organizations and programs in the United States. This accreditation is necessary for reimbursement of Medicare and Medicaid expenses. An independent, not-for-profit organization, the Joint Commission is the nation s predominant standards-setting and accrediting body in healthcare. Since 1951, the Joint Commission has maintained state-of-the-art standards that focus on improving the quality and safety of care provided by healthcare organizations. The Joint Commission s comprehensive accreditation process evaluates an organization s compliance with these standards and other accreditation requirements. The Joint Commission s evaluation and accreditation services are provided for the following types of organizations: General, psychiatric, children s, and rehabilitation hospitals Critical access hospitals Medical equipment services, hospice services and other home care organizations Nursing homes and other long term care facilities Behavioral health care organizations, addiction services Rehabilitation centers, group practices, office-based surgeries and other ambulatory care providers Independent or freestanding laboratories The Joint Commission has accredited hospitals for more than 50 years and today accredits approximately 4,500 general, children's, long term acute, psychiatric, rehabilitation, and surgical specialty hospitals, and maintains a unique accreditation program for critical access hospitals. Approximately 80 percent of the nation's hospitals are currently accredited by the Joint Commission. Besides examining the quality of patient care, JACHO also rates the quality of information management for each institution. (JACHO web site) Healthcare Market Final 11-28-05 11
Hospital Resources American Medical Association http://www.ama-assn.org/ American Hospital Association http://www.aha.org/aha/index.jsp List of the 100 Most Wired Hospitals http://www.hhnmag.com/hhnmag/jsp/articledisplay.jsp?dcrpath=hhnmag/pubsnewsarticle/d ata/0507hhn_coverstory_winnerslist&domain=hhnmag List of state hospital associations http://www.americanhospitals.com/resources/hospassns.htmhttp:/www.pohly.com/assoc.html Society of Hospital Medicine http://www.hospitalmedicine.org//am/template.cfm?section=home 12 Final 11-28-05 Healthcare Market
Success Story Medical Information Management Company Business Problem: A medical information management company processes medical claims for various medical services providers. These forms are filled out by hand and sent by courier or fax to the centralized processing service. Implementing a faster and more efficient way of processing these documents could lead to quicker payments for the firm s clients, improving customer service and providing a competitive advantage. The Toshiba Solution: ecopy provides the connecting link between the digital copier and the company s e-mail system, enabling employees to move these scanned forms between offices. The staff can now send and receive paper documents quickly, easily, and inexpensively. They are also able to fill out paper forms directly on their PCs, avoid long waits at busy fax machines, and effectively archive all of their paper-based communications. (ecopy) Healthcare Market Final 11-28-05 13
Selling Tips for the Hospital Market All healthcare organizations deal with massive amounts of paper-based documentation. Patient medical histories, enrollment forms, and claim forms are constantly being sent, received, archived, and retrieved. At the same time, HIPAA s privacy rules require healthcare organizations to implement appropriate administrative, technical, and physical safeguards to protect the privacy of patient health information, whether in electronic form or hardcopy. Your questions should help discover solutions that can accomplish the following: Maintain the privacy of patient records Provide for convenient transmittal of data to appropriate offices Allow for additional information to be added to documents and additional documents to be added to patient records Ensure the staff s ability to maintain accuracy in patient records Provide for quick access to medical records. 14 Final 11-28-05 Healthcare Market
Key Questions for the Hospital Market Document Management 1. Are you looking for a solution that will meet the requirements of the Health Information Portability and Accountability Act? 2. Do you use fax to communicate with outside concerns (labs, doctors, patients, etc.)? > What is the average daily number of outbound fax transmissions? > Do you often need to retransmit faxes due to busy signals or complaints about image quality? > Are your employees often waiting for access to the fax machines? 3. Do you have a plan for security and confidentiality of electronic health information? > Are your paper documents secured from unauthorized access? 4. How are you communicating patient records: > Between departments? > Between healthcare institutions/providers? > Between your facility and insurance companies? 5. What is your average daily volume of documents sent via UPS/FedEx/Airborne, U.S. Postal Service, or other courier service? > What is the average monthly expense for courier and carrier services? > Do courier/carrier pickup schedules create challenges in providing timely communication with your patients or healthcare partners? 6. Do you have a mailroom staff that manually delivers letters and documents to employees? If so, how much time is invested each month in the sorting and delivery functions? Healthcare Market Final 11-28-05 15
Toshiba Solutions for Hospitals HIPAA Compliance Business Need When the transfer of patient health information is involved, organizations must ensure that they comply with HIPAA s privacy and security regulations. This concern is the biggest driving factor in the need for a comprehensive and secure document scanning and distribution solution within the healthcare market. Toshiba Solution Toshiba e-studio MFP with ecopy and Questys software connected to the client s network. For large scanning requirements, a dedicated scanner should also be added. <graphic note text will pop up as cursor moves over boxes in the flowchart> Benefits Electronic storage and backup of documents with protected access Keycode access to multifunction devices Tracking and reporting MFP usage by user or department Private Print feature Fax-to-email feature 16 Final 11-28-05 Healthcare Market
The security benefits meet all privacy protection requirements of HIPAA by restricting access to personnel with keycodes, faxing secure documents directly by email to users, and tracking copier usage by department. ecopy integrates real-time with Outlook and Notes, and uses LDAP. Sent emails show up in the users' email sent folders. And emails that get bounced back show up in users' email inbox. These two functions provide a valuable audit trail for sensitive medical documents, thus allowing medical concerns to comply with HIPAA regulations. Healthcare Market Final 11-28-05 17
Toshiba Solutions for Hospitals Managing Medical Records Business Need According to the American Hospital Association, every 30minutes to one hour of patient care results in one hour of accompanying paperwork that must be properly documented and communicated. Often, the staff must pull a patient file, copy and forward it to an affiliated office across town and ask the patient to wait days, if not weeks, for the process to be completed. Toshiba Solution With an e-studio MFP and Questys and DocForm software, all records can be managed electronically; medical staff can type in a simple query (the patient's name and social security number, for example) into the powerful search engine, and pull up all of the records instantly. They can then simply send retrieved files directly by fax or email to the appropriate medical office. Additional documents can be added to a patient s file at any time, and existing documents edited and updated as needed. 18 Final 11-28-05 Healthcare Market
Benefits Increased speed and savings in the distribution of critical patient documents Cost reduction through more efficient use of medical records storage space Higher productivity from staff based on faster processing of patients due to immediate document availability Healthcare Market Final 11-28-05 19
Toshiba Solutions for Hospitals JACHO Accreditation Business Need The Joint Commission on Accreditation of Healthcare Organizations evaluates and accredits more than 15,000 healthcare organizations and programs in the United States. This accreditation is necessary for reimbursement of Medicare and Medicaid expenses. The Joint Commission s comprehensive accreditation process evaluates an organization s compliance with its standards and other accreditation requirements. Management of information is included in on-site surveys necessary for accreditation. All hospital records must be maintained in a manner that ensures accuracy and security for patient records. Toshiba Solution An e-studio MFP with Questys, ecopy, and Re-Rite software can maintain patient records and billing information safely and efficiently. 20 Final 11-28-05 Healthcare Market
Benefits ecopy enables index values to be sent directly into document management systems, such as Questys, at the time of the scan. This reduces labor and errors. Confidentiality of records is maintained through access codes. Efficient, electronic storage of documents reduces costs and improves productivity. Availability of documents for editing or transmission increases productivity. Accurate OCR translation of documents reduces errors and labor. Healthcare Market Final 11-28-05 21