by Ralph Whalen
Recently, we held an online focus group with CHIME to discuss the patient impact of an ERP system. The goal of the focus group was to get a CIO’s perspective on ERP, and to better understand if, and how, it is being used. During the discussion, we quickly began to draw parallels with the EHR, as it is easily one of the most significant technological contributions to improved patient outcomes, much of that driven by the promise of ‘one patient, one record’. However, the EHR does not provide a consolidated view of the organization – from staffing, to resources, to payroll and more, leaving providers with an incomplete understanding of their patients’ records.
Diagnosing or treating a patient without a complete understanding of their health record has inherent, and sometimes extreme, risks. As we progress further towards value-based care models, we’re going to continue to see a business demand for improved patient outcomes. This means the health of both the primary focus of your organization, the patient, and your organization itself, are going to be dependent on improved direct and indirect outcomes. The ERP aims to address this, as it offers the promise of “one enterprise, one ledger.” It is the means of connecting, coordinating, optimizing, and often replacing systems used in capacities from tracking supplies to personnel management.
An ERP is broken into several core modules:
- Finance & Accounting
- Management Accounting
- Human Resources
- Supply Chain Management
- Project Management
- Data Services
As we could have spent hours discussing each of these, we concentrated on Management Accounting, Human Resources, and Supply Chain Management and focused in on scenarios where we’ve seen ERP contribute or pose the potential to contribute to improved patient outcomes.
ERP systems can address everything from recruiting, to payroll and benefits, to scheduling, and more. The strength of ERP systems managing HR functions is its ability to automate activities managed across departments and current state systems. One benefit is a tight and consistent process but another byproduct of that is increased data integrity. By adopting an ERP for this standard operating procedure you’re creating a database where all department and system information is consolidated. In silos, it’s not as easy to realize someone hasn’t complied with training or that their job position hasn’t been appropriately updated as they’ve been promoted and given more system access. In an ERP system, these discrepancies are made rare and obvious when they occur.
- Think about how training is handled in cases of promotion. If an individual is promoted to a role where a new level of system access is necessary, a whole cascade of events are required. The employee must be trained on elements of the system required for their new role, once training is complete, the employee’s security access must be appropriately documented, their compensation and benefits need to be updated to match the new position, and their role needs to be updated in the HRIS system. This can happen either through a barrage of person-to-person communication or it can be autonomously communicated through an ERP as a cascade of actions set up to initiate with a certain trigger.
You might be wondering how this impacts patient care? Think about our what happens when you have non-integrated systems operating in silos with our previous example. Your HRIS system isn’t connected to the scheduling system, and neither system is fully aligned to clear organizational roles. Now you have a call-off. How can you guarantee the backfill suggestion is appropriately aligned to existing patient acuity levels? If they’re not, best case scenario is that you’re overspending on patient care, worst case scenario, you’ve got a patient without the appropriate care provider.
| Things to consider when approaching automation of your ERP’s Human Resources module:
Supply Chain Management
Implementing an ERP system and integrating that system with your EHR allows you to run a lean supply management process while anticipating end user / patient demand before the impacts of deficit are felt in the field. ERP’s enable coordination of the purchase and maintenance of instruments, tracking of the expiry period and reorder status, and finding economical suppliers through enterprise cost analysis. That same organization we worked with ended up further integrating their Supply Chain with their ERP system and all issues previously mentioned, provider frustration, reduced case load, decreased revenue, were significantly improved after implementation.
- The first time we were exposed to the benefit of an ERP system’s supply chain management was in a provider efficiency engagement where we were monitoring provider efficiency and noticed a department that was struggling to complete procedures in times comparable to their peers. We deployed Physicians Workflow observers to determine whether the issue was driven by improper system build or lack of provider adoption. It turns out it was neither. The providers were highly proficient in the EHR using a module that had been well built to align with industry best practices. The issue was actually the lack of appropriate supplies needed by the providers at the time of procedures. The delay was driving provider frustration higher, reducing case load, and ultimately decreasing revenue for the organization.
| Things to consider when implementing ERP Supply Chain Management to optimize efficiency:
Management Accounting & Cost Savings
An ERP enables rapid and seamless application of data intelligence to a tremendous number of business issues. Think about what you’re doing, you’re taking numerous systems and datasets and combining them all into one, uniform, analyzable location. Think about the situation where the question is asked: Should we build additional ER rooms? or the question: Should we build additional surgical suites? To effectively answer that question you need to understand your current utilizations and your current costs to understand an accurate potential for ROI. That can be a hefty analysis across facilities, supplies, personnel. With an effectively implemented and adopted ERP, that data is consolidated, cleaned, and at the ready for you.
| Things to consider when leveraging your ERP to apply data intelligence to business decisions:
To learn more about trends in the industry, and what our team learned through this Focus Group, please email us at firstname.lastname@example.org.