Outsourcing & The Orthodontic Practice
Author: Charles A. Lewis
Although Fortune 500 companies have in recent years begun to utilize extensive outsourcing, it seems that most orthodontists have not discovered the valuable outsourcing services available to their practices. For that reason, this article describes some of the services offered, as well as the benefits derived from their use. All the services discussed involve automation and the practice management system.
What is Outsourcing?
Outsourcing is a management strategy whereby specialized outside service providers are used to efficiently and cost-effectively perform non-core tasks traditionally handled by internal staff and resources. In an orthodontic practice, these non-core functions could be just about everything except patient diagnosis and treatment. Some of the typical benefits from outsourcing can include:
Although some large companies are outsourcing functions offshore or to other countries, that is not being suggested here. In fact, 100% of the described services are available in the USA.
Outsourcing Services Available to Orthodontists
■ Payroll
■ Electronic Fund Transfers (‘EFT’)
■ Printing & Mailing of Statements
■ Insurance: Electronic Claim Submission (‘ECS’)
■ Hosting & Delivery of Management Software and Data
■ Data Backup & Archiving
■ Office Computer Network Monitoring & Updating
Payroll
Of the outsourcing services listed, this one is probably used by more orthodontic practices than any other. Anyone who has ever tried to prepare payrolls and to keep up with all the Federal, state and local laws, deposit requirements, etc. that pertain to wages, probably knows the value of using a payroll service. This service is available from accounting firms, banks, and large payroll companies such as ADP and Intuit. Because this service is widely used, no additional time will be spent discussing its merits.
Electronic Fund Transfers (‘EFT’)
Electronic fund transfers are what occur when automatic drafting services are used. The patient or billing party preauthorizes the debiting, on a specified date, of their checking, savings, or credit card account to make the monthly payment for treatment. The company doing the auto-drafting then debits the account and electronically deposits the collected funds directly into the practice’ bank account. Practice management software can integrate with some functions of the company doing the auto-drafting to enable the automatic crediting of payments to the patient account.
At a minimum, the following advantages are realized by practices using EFTs for the collection of monthly payments:
¢ Eliminates printing and mailing coupon books
¢ Eliminates printing and mailing monthly statements
¢ Mail handling is substantially reduced
¢ Eliminates preparing and making bank deposits
¢ Payment is received on the specified date
¢ This is a paperless process for the practice
Online and electronic payments are becoming increasingly popular in this country and orthodontic practices should take advantage of this trend to better serve their patients, while simultaneously improving on-time payments. Other payment-related services are often provided by the company doing the drafting, but the above benefits alone are highly desirable and cost effective for the practice. Serious consideration should be given to the use of EFTs.
Printing & Mailing of Statements
This outsourcing service has not been widely accepted partially because many orthodontists don’t know it is available. Another reason is that doctors think they can do statements more cost effectively in-house, since their practice management system produces them. However, a more in-depth look at this service tells a very different story.
The practice management program electronically transmits the billing data, in a predefined format, to the company providing the service. The company then prints and mails the statements to patients. Consider the following services offered by one company and reach your own conclusion as to whether this process is best accomplished in the practice – or through outsourcing.
Monthly statements containing the practice name, address and telephone number are printed. Statements are very professional in appearance and even incorporate color. The printed statement and a return envelope containing the practice address are then included in an envelope, sealed, and mailed using first class postage. The cost: (a) a $99 one-time setup fee and (b) $0.58 for each one-page (a second page adds $0.12) statement mailed.
Deduct the $0.37 cost of first class postage and then decide if you can print the statements (paper, printer, ink, electricity, staff time), purchase two envelopes, have the staff fold the statements and stuff them and the preaddressed return envelopes in the mailing envelope, seal the envelope, attach the postage, and take the statements to the post office, all for $0.21 each! A cost analysis for paper vs. electronic processing based on a data analysis conducted by the American Medical Association (AMA) several years ago, determined that it cost approximately $2.08 (reflecting today’s postage rate) per statement to produce and mail statements in-house. (Staff costs reflected pay scales in force at the time.)
If the use of EFTs is combined with outsourcing the printing and mailing of statements, patient billing becomes a paperless function for the orthodontic office.
Insurance: Electronic Claim Submission (‘ECS’)
Submitting insurance claims electronically is becoming commonplace in orthodontic practices that accept insurance assignments. While there isn’t any guarantee that all electronic claims will be paid faster, most offices say that electronic claims are paid within 7 to 10 days, while paper claims can take up to 6 weeks. That alone makes the inexpensive outsourcing of insurance claims to a clearinghouse worthwhile.
Although the delivery to the payer is definitely quicker with ECS, most claims must go through the same review process as paper claims at the payer’s office. The good news is that payers are constantly trying to give electronic claims advantages over paper claims. This could mean fewer required attachments, priority reviewing, or more frequent payment cycles. Other advantages include the fact that electronic claims are more easily tracked than paper claims sent through the mail and that many payers have specific departments to handle electronic claims issues.
Hosting & Delivery of Management Software and Data
This particular outsourcing service has been available to orthodontists since January 2003 and is only available from one company. It represents an extreme departure and definite improvement from using the typical local area network (‘LAN’) where the management software and patient data are located on a server in the orthodontic office and accessed by PC workstations.
With this service, the practice management software and the patient data are located on a powerful enterprise server in a data center that might be located hundreds or even thousands of miles from the orthodontic office. Access to the program and data is provided via the Internet and can be accomplished from any location with an Internet connection. The service provider is responsible for ensuring that the software and data are available 24/7 and that all the safeguards such as data encryption, firewalls, failover and backup systems, etc. are provided.
The following benefits are derived from using this relatively new outsourcing service:
¨ The data is bi-directionally encrypted (data in LANs is not) and the user has an encryption key.
¨ The speed of the office network is determined by the multi processor-equipped server and the office’s broadband connection, obviating the need for constantly upgrading workstations.
¨ Network workstations can consist of PCs, Tablet PCs, thin client terminals, or Macs and the program can operate on PDAs or Pocket PCs. Because workstation CPU speeds are not critical, users with almost any PC capable of connecting to the Internet can use it.
¨ Using the service means never having to purchase expensive servers or do time-consuming daily backups; data is constantly backed up on multiple servers at the data center.
¨ Servers in the data center are kept updated and use the latest operating systems.
¨ All updates to the management software are made on the server in the data center and are then immediately available to the user. No more loading program upgrades.
¨ The service provider’s data center uses multiple levels of system backup devices.
¨ The user’s electronic records are easily made available to clearinghouses, referring doctors, for interfacing with the practice website, etc.
¨ The management software and data are stored in the same location where the programming and support staff is based, simplifying support services.
¨ Having the software and data on a remote server can make it easier to get back to seeing patients after catastrophic events such as office destruction by fire, wind, water, earthquake, etc. If the practice operated in paperless mode, the doctor has access to all the patient records by using a temporary office, a Thin Client/PC/Mac workstation, and an Internet connection.
¨ Provides the ideal solution for operating multiple practice locations because all workstations connected to the central server use the same data, in real time, no matter where they log on from.
¨ With an Internet connection, the doctor has complete and instant access to all the electronic patient records. This can be extremely helpful for handling patient emergencies when the office is closed; the doctor is away on vacation, etc.
Data Backup & Archiving
One of the biggest problems for orthodontists who use a local area network in the office is the lack of consistent data backups; another is the permanent archiving of data, which very few offices do at all. Most offices do not backup their data regularly and even those that do rarely ever check the tape, disk, or other media being used to see if it is good and the data is actually getting backed up. Recently, a doctor in California purchased a practice and when the hard drive in the office file server crashed a month later, it was learned that the last usable data backup was more than a year old. What a horror story!
Daily backup and archiving services are offered by one service provider to offices with LANs and an Internet connection. The service provider’s backup system automatically connects with the office file server, queries the database to determine changes in data, backs up any changed data, and closes the connection. This is done after office hours and the entire process usually takes 15 seconds or less. In the event that the office needs its data restored due to a hardware failure, the data can be restored over the Internet by the service provider.
At the end of each month the backed up data is placed on a CD and mailed to the orthodontist for archiving. A second CD is prepared and archived by the service provider. In the event that legal action by a patient is ever taken, the practice has two copies of its data, one archived by an independent party, to prove that its electronic files have not been altered. Daily backup and archiving service can be a very important type of ‘insurance’ for the practice.
Office Computer Network Monitoring & Updating
Maintaining a local area network with all its connected hardware and operating systems can be a daunting task, even for a network specialist. Rarely are networks maintained by the orthodontist or a staff member; most rely on local technicians. Since a visit from, or a phone call to, a technician usually incurs a substantial fee, few networks are regularly looked after to keep the operating systems updated with the latest upgrades or service packs, to diagnose network problems, etc.
In addition, a rapidly increasing number of orthodontic offices with local area networks now have DSL Internet connections, which presents special problems in the form of viruses. A Worm or Trojan horse virus acquired by one workstation will rapidly spread through the network to the server and other workstations and it is not necessary to download a file to get one; ‘spam’ E-mail regularly contains viruses. The simple act of connecting to the Internet recently gave the Sasser Worm virus to everyone using Microsoft’s Windows 2000 or Windows XP software. The only exceptions were users behind substantial firewalls or those with the latest security service packs for those Windows operating systems. Even those who have anti-virus software will encounter problems if the program is not updated at least daily – because the viruses are. Depending on the nature and severity of the virus, an office network can become drastically impaired or even shut down; data can also be lost.
One provider offers unique services to address these mounting problems in LANs. The service categories include:
ü Complete monitoring – scheduled or continuous – of the network, server and all workstations
ü Operating system monitoring, management and upgrade installation
ü Automated virus protection, monitoring and update installation
ü Network and/or Bandwidth monitoring and optimization
ü Remote network control, performance optimization, and Help Desk
The list of services within these categories is far too extensive to describe fully, but overviews of two important services are provided below.
Operating system monitoring, management and upgrade installation. This group of services can provide scheduled or continuous monitoring and/or management of the network operating systems for the server and workstations. When Microsoft releases new service packs, patches, or security updates, the service provider automatically obtains and installs them on the client’s server and/or workstations. Management includes optimizing network performance to avoid network bottlenecks, collisions, or packet losses that are revealed through the monitoring process.
Automated virus protection, monitoring and update installation. The service provider installs anti-virus software, created especially for networks, on the server and each workstation. A fee for the software and its updates is paid on a monthly basis. The software is constantly running in the background and updates can occur as frequently as every hour. Viruses are automatically cleaned, in the background, without interfering with the user. Reports are automatically generated and sent to the service provider for determination as to whether router or firewall changes are needed.
Because these services are very preventive in nature, they can help the orthodontist avoid the network problems and crashes frequently experienced by many offices. And since the services are almost fully automated, they can be furnished cost-effectively and unobtrusively. As paperless operations become more common, having this type of protection will be even more important.
Summary
Orthodontists have many practice functions that can be outsourced; most of them were discussed here. (The outsourcing of imaging and lab services was not addressed.) Each of the services is provided by an expert in that particular field and can improve the efficiency in the practice. They also free up more time for patient treatment and interaction by the doctor and staff. Equally important, the described services can be obtained at costs that are probably less than what is currently being paid to perform them internally.
Improved efficiency, less stress, more time with patients, get paid faster and easier, and all at a reduced cost! So what is not to like?
About the Author: Charles A. Lewis is the Chairman and CEO of CPI Technologies Corporation and CEO of its subsidiary companies; Advanced Ortho Systems, LLC and Advanced Dental Systems, LLC. He has many published articles on paperless operations and practice automation. Charles lectures at seminars and colleges on increasing practice efficiency through paperless operation and on Internet-based delivery of management software. Orthodontists can contact him at 877.803.4412.