Hospitals Outsource Transcription, Coding Despite New Technology

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As hospitals implement electronic health records and prepare for the impending transition to the ICD-10 diagnostic code set, many hospital information management (HIM) departments are outsourcing transcription and coding services for a variety of reasons, according to a recent survey of HIM executives conducted by KLAS Research. However, the reliance on these outsourced services is expected to decline, in contrast with hospitals' growing use of outsourcing in other areas.

The introduction of EHRs has not yet reduced the need for transcription in most hospitals, Graham Triggs, the KLAS consultant who authored the report, told InformationWeek Healthcare. That's because physician documentation is usually the last EHR function to be rolled out in most institutions, he said.

The KLAS report found that 11% of respondents predicted their use of transcription would increase; most of those executives worked in hospitals that were adding new physicians or new facilities to their organizations. A slightly higher percentage of respondents (21%) planned to decrease or eliminate transcription due to the use of speech recognition, consolidating transcription services to one vendor, or EHR implementation.

[ Practice management software keeps the medical office running smoothly. For a closer look at KLAS' top-ranked systems, see 10 Top Medical Practice Management Software Systems . ]

The majority of hospitals still outsource at least a part of their transcription, and most of those facilities plan to maintain or increase the use of these services, the report found.

One reason is offshoring: It's often less expensive to outsource transcription to firms that have offshore contractors than to hire transcriptionists, Triggs observed. Labor is cheap in a country such as India, and turnaround time might actually be shorter than for in-house transcription. Although the quality of offshore reports has been a problem in the past, medical transcription services outsourcing (MTSO) firms have improved their quality assurance, and complaints are down, he said.

Meanwhile, the approach of the ICD-10 deadline in 2014 is heightening hospitals' focus on HIM departments, Triggs said. "Until recently, the HIM department was a critical function in hospitals, but things like EHR deployment were taking center stage. Now that the ICD-10 deadline is coming, it seems like the HIM department is becoming a primary focus of hospitals to make sure they've got the correct tools and outsourcing arrangements available to help them meet that deadline."

Moreover, coding professionals are in short supply, and KLAS noted that coding consultants were hiring away some experienced coders from hospitals. Seventeen percent of respondents cited staffing as their top concern, right behind regulations such as ICD-10, and Meaningful Use (27%) and technology (34%).

For all these reasons, the report said, nearly a fourth of providers plan to increase use of coding services, and almost half plan to purchase computer-assisted coding (CAC) software. Meanwhile, Nuance and M*Modal, the leading MTSOs, are offering the use of CAC with transcribed reports, Triggs noted.

The report also covered "release of information" (ROI) services that specialize in helping hospitals comply with regulatory and legal requirements when they release patient information to other healthcare providers and authorized parties. KLAS found that many more providers are outsourcing ROI than not. The top company in this field, with more than 50% of the market, is HealthPort.

The report also rated MTSOs by performance. Precyse, Transtech and Acusis were highest ranked overall, beating market leaders M*Modal and Nuance.

In the near term, the KLAS report said, "HIM departments are planning to invest much more heavily in technology than in services. In large part due to the switch to ICD-10, nearly half of those interviewed indicated they were planning to invest in CAC in hopes that this technology will enable them to make up for the lost productivity and gain the additional firepower needed for ICD-10."

In addition, over 30% of the HIM executives said they were planning to invest in EMR and speech recognition to help reduce costs and increase efficiencies. Just 18% viewed investment in scanning, coding and transcription services as a way to reduce costs and improve efficiencies. Nevertheless, the report concluded, many hospitals will continue to rely on services firms to help them meet new challenges related to lower reimbursement and new regulatory requirements.

Clinical, patient engagement, and consumer apps promise to re-energize healthcare. Also in the new, all-digital Mobile Power issue of InformationWeek Healthcare: Comparative effectiveness research taps the IT toolbox to compare treatments to determine which ones are most effective. (Free registration required.)