To do our work, we have created a very sophisticated tool which we call the MAGNA/M4 system, the name that you see in our logo. MAGNA was our original system, one that in the 90s was used to provide Decision Support Services to Integrated Delivery Systems (Hospital + Medical Groups). As the healthcare market changes in the early 2000, and the large national Provider Practice Management Organizations became a thing of the past, IMOS decided to re-focus back to its roots, that of providing services to Hospitals. Hence MAGNA/M4 was born…
The right tool for the job
The original MAGNA system, while extraordinarily comprehensive in its capabilities (because it was built to accommodate Medical Groups as well as hospitals) made the maintenance of its structures somewhat time consuming to operate. In order for IMOS to be able to deliver the compelling value called for by our new business model, we needed a tool customized to help us speed up the implementation and maintenance tasks, all the while maintaining the power and flexibility of the old MAGNA Solution. Technology came to our rescue with new tools and better hardware to allow us to create a much more compact, versatile and flexible product. Based on an SQL compliant platform, retaining the wisdom, power and experience derived from MAGNA, and adding new features to reflect the evolution of healthcare management needs, this new product is designed with two focuses: 1) Hospital operations 2) Flexibility to address hospital business questions MAGNA/M4 has the following modules:
Staff Productivity Management
Business Line Management
Business Views Production
The Cost Accounting System is at the HEART of our ability to help you manage your financial information because it creates “costs” which is not a General Ledger Concept. It does what no other system can do: it allows you to see the “cost” (notice, not just the “expense”) of doing business … in the same manner in which you “market” and “manage” your business. Think of it this way: while the general ledger tells you your “expense” by account (say the labor expense for Registered Nursing in the ICU), the cost accounting system tells you the “cost” of an ICU day. This “Cost” includes a portion of the Registered Nursing Expense PLUS everything else that is done to the patient in the ICU (e.g., pharmaceuticals, respiratory therapy, equipment expense, building depreciation, information systems support, etc.). And, because of this, it can tell you the cost of a contract (very important when negotiating rates), or a disease process, or a specific kind of practice (e.g., a care protocol), etc… the answers are unlimited.
Our Cost Accounting System does this by calculating the item level cost of every service performed in your organization. This is powerful information not available from your existing billing or financial systems. With this cost information you can measure your specific costs for any “slice” of your business but, most importantly, you can identify, monitor and manage, the factors driving your organization’s cost performance.
Cost calculation for every billable item (and whichever non-billable you want to track) for every department
Re-distribution or consolidation of general ledger expenses for departmental assignment
Unlimited user-defined cost components
Default or user-defined assignment of expenses to specific cost components by department
Automatic or user-assigned RVUs by cost component by procedure by department
User-defined and system-generated array of indirect allocation statistics
True cost calculation at the procedure level
Provides an understanding of true business costs and profitability
Gives management the ability to know the “How” and “Why” of cost variances
The foundation for Productivity and Business Line Management
Staff Productivity Management
As a traditional service business, the productive use of your available labor is the key to a healthy bottom line. Labor in most hospitals accounts for approximately 50% of all the organization’s expenses and the productive control of this resource will make a drastic impact in the organization’s bottom line.
This expense is clearly highly susceptible to patient volume activity and its mix. The organization’s ability to react to this blend is key to the effective and efficient use of labor. Labor management and careful control presents an opportunity for significant profitability performance improvements within a framework of good quality of patient care and service delivery.
Our experience has demonstrated that savings to be achieved from implementing a performance-based staffing process, together with adequate monitoring tools, range between 7% and 15% of TOTAL labor dollars (and the larger the organization, the bigger the percentage savings potential because there is more opportunity for cross-training and flexing). This can be achieved quickly (within less than a year) and with an additional positive impact in terms of quality and customer service. Most importantly, savings to be achieved through the implementation of this process and system become annuities. As time goes by the savings continue to be accrued year after year, the present value of which will yield enormous returns on investment for the effort.
Good management of healthcare delivery services is based on a good understanding of the business coupled with the availability of appropriate information to validate the adequacy of actions. There are a number of variables that are being processed in the department manager’s mind in order to create the desired outcome of quality and cost effective service. Some of these variables are: volume and type of work, number of FTEs and the skill mix required to service this work, cost of the various employees, productivity of the employees, etc. No computer system can or will ever replace the human factor involved in this management task. However, the appropriate use and management of these variables is quantifiable and its reporting provides a significant measure of individual departmental productivity, cost and service performance.
Traditionally the management of these variables has been handled in the manager’s head with little or no systems support. This is mostly due to the inadequacy of traditional transaction systems to provide the information needed to manage (e.g., employees are not reported in the right department, hours are not booked to the right department, a new department is needed, two departments share staff, etc.) Most importantly, in traditional transaction systems like Payroll and G/L, the dollars or hours do not flex with volume or even if they do (like in some flexed budgeting systems), they say nothing about whether the volume was handled productively or not.
The challenge to meet is to empower line management by providing it the information to manage better. This information should indicate to department managers whether they are working productively or not in relation to the volume they are being asked to process. At the same time, this information should tell senior management if the organization as a whole, and each department individually, are meeting their productivity goals and what is the impact of not doing so. Further, it should tell us why we are not meeting our goals and what can be done to correct the situation. For this, a new process and the system to support it are required.
IMOS’s Productivity Management Process and System
IMOS’ s Productivity is a process that empowers departmental management and the chain of command at all levels by providing the information to productively manage labor resources. It does so by recognizing two important considerations: • Labor does fluctuate not just with volume but with the kind volume handled • These fluctuations are idiosyncratic, meaning industry standards may not apply to you.
The concept is simple: Through a process that understands that quality should be maintained, this new system and its process provide “Performance Reporting” based on volume fluctuations from your OWN historically demonstrated best practices. In other words, there is not need to fight over “industry standards”. Your average performance will help deliver ideal results from the start already without involving unappealing arguments over the adequacy of external standards (even assuming those external standards can be properly identified or even found) to your operation.
The key is that both, the process and the system have been designed with the specific goal of idiosyncratically managing labor productivity. Also, unlike other systems such as G/L, Billing, Claims Management or Payroll that have a specific purpose other than managing productivity, this new system merges the data from these other systems to provide “Labor Productivity Management” information.
Based on your hospital’s own experience. No need to use outside standards.
Bi-Weekly, no accruals, in synch with the payroll system.
Allows the use of manual statistics
Allows the creation of “derived” statistics, that is, statistics that are derived from other statistics or data on the system.
Simple and easy to understand
Minimal, if any, learning curve.
Intuitive reports designed for simplicity and completeness.
Focus is NOT on managing by the reports but in providing the managers the information for them to manage.
A few reports convey all of the relevant information required to manage Labor Productivity.
Business Line Management
At the heart of The Business Line Management System resides our Patient Level database. The Patient Level Database gives you a very powerful way to look at your information and your operation. Via “Views” of the Patient Level Database, you have complete flexibility in defining what data you access to define your business line. Thus, a business line can be defined as any segment of your operation or market. This can be very broad, such as a whole department, or very specific, such as specific services for a single payer.
The power to analyze business lines comes from having the true costs for each activity on each patient in the patient level database. This allows the Business Line Management system to identify the true profitability of a contract, the cost of treating a specific diagnosis, or the cost of a associated to a specific clinical department or ancillary service within a patient case.
Business Line Management offers the ultimate in flexibility to generate reports with complete control of the selection, aggregation and formatting of the information.
The heart of the Business Line Management system is the detailed activity database. This is the main repository of activity information. It includes information from the billing system. Reporting can be done at the procedure level detail, by account or in aggregate.
Patient Level Database
The “Punch Line” of the Business Line Management system is the ability to match the activity to patient demographic, financial and clinical data. That is the function of the Patient Level Database. It enables you to link critical information about the case. When this is matched to cost, the world of cost and profitability (by anything relevant about the case) is now open for your analysis.
Matched to our net revenue model, the ability to determine “true cost” by business line leads to the ability to tell true profitability by Business Line.
Among others, some of the detailed analyses that can be performed are:
Cost by product/business line
Cost by condition/diagnosis
Marginal cost analysis
Program Analysis (e.g., Industrial Health)
Business line profitability
Diagnosis cost ranking
Views are “slices” of the dataset created for a specific purpose and for a specific audience. Their goal is to afford their users the ability to “massage” data and create their own reports. This is IMOS’s response to the complexity of sophisticated report writing needs. Years ago IMOS realized that no matter how sophisticated, and how complete a report writing tool can be, if will always fall short in one of two ways: a) It will not write some report needed by someone … and/or … b) It may end up being too complicated to operate requiring itself a learning curve.
We solved this problem with the “Data Views”. Created with a “purpose specific” mindset, they address the need of providing the exact data needed to conduct the analysis and leaving the task of massaging the data to the user through the use of his/her own tools. With the advance development of office productivity software (Excel, Access, Crystal Reports, etc.) the users now have an array of readily available choices, tools they ALREADY KNOW, that they can use to mine the Views themselves.
These Views are delivered on those tools, thereby exempting the user from the need to figure how to migrate the data to them.
No learning curve
Quick ramp up and ability to start using the tools right away
Tremendous versatility by providing anything the user needs for their analysis.