Telecom and wireless expense management (TEM) and (WEM) solutions offer healthcare providers effective means to meet the challenges borne from today's tremendous growth in wireless technologies.
At a Glance
Steps to implementing an outsourced telecom or wireless expense management (TEM or WEM) solutions should include:
- Review of the organization's prior experience with these solutions
- Promotion of the approach across the organization
- Assignment of an internal owner of the TEM or WEM functions
- The decision as to which activities to outsource
- Due diligence in sourcing the TEM or WEM solution
In 2010, U.S. healthcare and social services organizations spent almost $16 billion on fixed and mobile communications. According to industry analysts, some healthcare providers are paying as much as $1 million annually for their telecom needs.a And as the technological transition in health care continues, encompassing telemedicine, telehealth, wireless, and advanced networking services designed to reduce costs and improve patient care, so too will healthcare telecom spending.
Contributing significantly to this rise in spending is the growing need for more sophisticated mobile services, especially those that can accommodate the conversion to electronic health records (EHRs) required by the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009. Consider that, currently, use of smartphones is commonplace among physicians, and a growing number of physicians are using these devices to access healthcare information in EHRs. Security on mobile devices becomes an even greater priority when they are being used in this way.
Other factors contributing to the increase in fixed and mobile telecom costs, to various extents, include inaccurate and out-of-date inventories; overlooked billing errors; poor management of invoices from multiple carriers; inefficient manual payment processes; and nonoptimized services, costs, contracts, carriers, and technologies.
All of these factors underscore the challenges that have inevitably accompanied the tremendous growth in wireless technologies. The simple reality is that, as health care shifts to wireless as the primary or default communications tool, like other major industries, the industry is finding that costs, security, device, applications, and policy management are far more complex and variable with mobile services than they have been with fixed or landline services.
These circumstances raise two important questions for providers: Given the demand for ever-more sophisticated wireless and fixed telecommunications, can healthcare organizations find ways to decrease their costs while still keeping pace with new regulations and demands? And can they reasonably rely upon internal IT and administrative staff to effectively analyze and manage communication assets on an ongoing basis?
In some instances, healthcare organizations can meet these challenges through their own efforts. But for those organizations that lack sufficient internal resources, comprehensive telecom and wireless expense management (TEM and WEM) solutions are available as outsourced services to assist in dealing with these complexities. The aim of these telecom (fixed) and wireless (mobile) management solutions is to provide improved control and visibility into all areas of telecom expenses, while generating significant cost savings throughout the organization. Moreover, these solutions have capabilities that extend beyond just expense management to management of connectivity, mobile devices, security, and applications.
TEM and WEM at a Glance
TEM and WEM services aim to help organizations manage fixed and wireless communication expenses and business processes through software that is designed to handle the complexities of millions of dollars in telecom charges each year. The two solutions do much more than just processing large invoices more efficiently and paying bills on time; they also can manage telecom resources more holistically and in real-time. The solutions can help an organization to organize, analyze, and optimize expenses, thereby simplifying budgeting, forecasting, and planning processes. They can allow an organization to reconcile inventory changes and validate contract rates. And they can help decrease fixed and wireless expenses by optimizing carrier plans, uncovering savings, and eliminating waste, which in turn promotes more informed decision making, controlled costs, and improved efficiencies.
TEM and WEM providers can perform expert auditing and implement automated processes to identify excess billing, oversubscribed services, and opportunities for savings, thereby enabling more efficient management of costs. Drawing upon its in-depth knowledge of carrier rate plans, for instance, a TEM or WEM provider can identify a hospital's usage patterns and recommend plans that reflect the hospital's specific requirements based on these usage patterns. The focus is on "right-sizing" each plan feature, which may include scaling back or eliminating some services, such as texting plans, and negotiating discounts on essential services, such as voice and data plans, international and long distance features, and other features.
The TEM and WEM partners also can provide increased visibility into total fixed (wireline) and mobile (wireless) communication spend by performing onsite quarterly business reviews analyzing spend and policy effectiveness and providing online access to reports on spend analysis ranging from high-level views to drill-down detail.
Bill payment also can be simplified through an arrangement in which all monthly bills are consolidated to allow the hospital to make a single payment to one source. The TEM or WEM provider then handles the individual payments to each carrier.
With the expansive growth in mobile devices, WEM may free up budgeted spend to tackle mobile technology initiatives that may enhance communication among physicians, nurses, and other employees. Newly identified funds can be used to invest in tablet devices, such as iPads, and mobile device management software to extend out, secure, and streamline personal health information, and facilitate research and treatment, script writing, and billing at the point of care. Typically, TEM and WEM solutions are customized for each organization, offering levels of support tailored to meet the business needs of each healthcare provider, thereby helping to ensure the effort will achieve the greatest possible ROI.
Deciding Whether to Outsource
As with any decision to outsource a business process, a healthcare organization's leaders need to perform an assessment to determine whether outsourcing TEM is really what the organization needs. This assessment should seek clear answers to the following questions:
- Are we prepared to spend the time and energy required to manage an outsourcing relationship?
- Have we fully evaluated which processes can be outsourced and the benefits of outsourcing them?
- Have we determined the real costs of doing work in-house (i.e., what the costs of not outsourcing TEM will be)?
- Do we understand how the costs of performing TEM in-house compare with the costs of outsourcing the work?
- Have we verified what the ROI would be if TEM were outsourced, and identified financial metrics and results?
- Have we determined specifically how outsourcing TEM will improve our efficiency and/or service?
- Will business, including patient care, suffer by not investing in the expertise or tools that an outsourcing TEM partner can provide?
As they weigh the considerations supporting a decision not to outsource TEM or WEM, however, the organization's leaders also should keep in mind the advantages of outsourcing:
- By addressing day-to-day telecom problems, the outsource partner frees staff to focus on other mission-related activities.
- The outsourcing partner is likely to be capable of delivering tools, expertise, and resources dedicated to overseeing the healthcare organization's telecom needs that are much more highly sophisticated than those of the healthcare organization.
- The TEM partner should be able to manage innovation and technology changes, thereby reducing the time and resources that the healthcare organization must devote to this task.
Of course, through due diligence, the healthcare organization's leaders should verify the extent to which the prospective outsource partner can deliver these benefits. The organization may decide that outsourcing is not the best option if, for example, it already has made a substantial investment in a help desk and procurement staff to manage its mobile workforce, its staff are knowledgeable enough to perform accurate optimization reviews, or it determines that ROI projection and savings from the vendor are too low.
When considering whether to outsource TEM or WEM activities, the healthcare organization's leaders also need to balance the "opportunity cost" of this type of effort with that of other projects that may have a more direct impact on patient care. Outsourcing TEM and WEM presents an advantage in this respect, in that the need for substantial involvement by the healthcare organization in the actual effort is minimal. The organization will need to participate in the initial effort to gather data required to secure contracts and other contractual rate tables. Beyond this initial step, however, the TEM or WEM provider's audit team uses the data to audit all billing items without the need for further participation from the healthcare organization. Once the audit is complete, the healthcare organization's leaders simply review the findings for accuracy and then, again, defer to the outsource partner to assume responsibility for opening disputes and working to closure. Thus, although the healthcare organization remains engaged through status updates, it requires only minimal time and effort to realize the benefits of the arrangement.
Tips for Successful Implementation
Whether TEM or WEM are new to an organization or the organization already has certain initiatives in place, due diligence is required to ensure that the best solutions are prescribed. This assessment should include the following steps.
Review the organization's prior experience with these solutions. Because TEM and WEM are cross-organizational applications, it is important that all key players be consulted before undertaking such an initiative. Although most finance leaders will know what, if any, TEM or WEM function may already be employed, IT leaders also may be able to provide additional insight. Also including procurement and HR in the discussion can help in identifying the best approach.
Sell the project internally. The decision to outsource TEM and WEM may meet with pushback from members of IT, HR, finance, and procurement who might be reluctant to change business processes. The organization should actively seek to reassure these individuals by showing how outsourcing expense management will actually improve their control over telecom services, while driving increased savings across the organization and allowing everyone to meet their business goals. To this end, the organization should point to the benefits of outsourcing that can assist internal staff in managing telecom services, including the outsource partner's experience and technological expertise, tools for analysis and reporting that the outsource partner can provide, and relationships that it enjoys with manufacturers and carriers that enable it to negotiate the best savings options for the organization.
It also is important to include all relevant administrative and management areas in the planning for the project, especially operational personnel, to ensure that the complete transition process is understood and can be managed.
Identify an owner of the TEM and WEM functions. Once all key players are on board and in support of implementing telecom and mobile expense management solutions, the organization should appoint someone (or some division) within the organization to oversee the TEM partnership. A representative from IT might be the best candidate, because IT has the necessary tools to procure and maintain the correct network. However, if no one in the IT division is available to take ownership of the TEM solution, the finance group would be the next best place to look.
Determine which activities to outsource. Options to be considered for wireline services typically include bill-processing, audit of bills, carrier dispute resolution, asset inventory, and expense optimization. For wireless services, the options considered are more likely to include-in addition to bill processing and expense optimization-help desk management and procurement.
Source the TEM and WEM solution. The senior finance executive should play a lead role with IT leadership to define the organization's needs and identify the vendors to include in the process. At this point, organizations may consider bringing in a consultant to help with this task.
In assessing prospective TEM and WEM partners, the group charged with this effort should ascertain the extent to which each outsource firm provides the following support staff: client support experts, dedicated account managers, optimization specialists, technical advisers, help desk professionals, warranty services, and global support.
It also is important to inquire with the vendor regarding long-term security, which is a critical part of any outsourcing relationship.
In sum, when sourcing a TEM or WEM outsourced solution, the goal always should be to find a TEM provider that can deliver solutions to meet the healthcare organization's specific business goals with expert support services every step of the way. There are as many options available as there are healthcare organizations.
Benefits of TEM and WEM: Case Examples
Although total savings will vary from enterprise to enterprise, and from TEM provider to provider, merely by using TEM solutions that raise cost awareness (e.g., automated cost reports and analytics), a healthcare enterprise could quickly save between 10 and 15 percent on telecom spending. And a comprehensive WEM solution could save an organization as much as 20 to 40 percent on overall mobile communications expenses.
For example, Merial, a leading international animal health company, which employs about 5,600 people worldwide, needed greater visibility into its mobile spending and a total solution for TEM and WEM. Already using a TEM provider for its landline communications, Merial decided to broaden the coverage to include WEM. The company quickly identified redundancy with unused circuits and excess wireless inventory. From overseeing contract negotiations, tariffs and fees, inventory, and invoice management, comprehensive help-desk support services, wireless needs for global travel, and utilization of a mobility management portal, the WEM solution helped Merial cut overall telecom spending in half, reducing monthly costs, on average, from $70,000 to $35,000.
As is typical with such a review, once the initial data gathering had been completed, the WEM provider required about six weeks to assess Merial's performance on mobile spending. After this analysis, the WEM provider met with Merial to determine which locations warranted traffic studies to identify additional opportunities for cost savings. The disputes opened with the carrier were closed within three billing cycles.
The benefits of TEM and WEM go beyond simply cost savings, however. One healthcare company that administers a contract rehabilitation services business secured a WEM solution provider to develop and deploy a mobile system that would improve operational efficiencies and revenue management-and ultimately, cash flow-with more accurate billing and reporting. The mobile system eliminated the need for therapists to spend hours each week reentering their timekeeping and treatment information into desktop PCs for transmission to the centralized systems. The WEM solution also helped the company to meet compliance requirements more efficiently than had been possible using paper processes. As a result, the organization was able to secure more rehabilitation contracts from healthcare facilities. Further, its employment of the solution became a valuable recruiting tool for new therapists.
Pittsburgh-based UPMC, one of the nation's leading not-for-profit health systems, with 20 hospitals, 4,000 physicians and more than 50,000 employees, is an example of a large organization that has enjoyed success in working with a WEM provider. Within 60 days of implementing its WEM solution, UPMC had uncovered enough savings to make the initiative ROI-neutral. The TEM project paid for itself in just two months, and the ongoing savings continue to mount-well beyond expectations. UPMC reduced its telecom spend by $25,836 monthly, or 11.6 percent. Activity such as reviewing device usage and recommending disconnection after three months of inactivity resulted in about $10,000 of immediate savings. Another cost-saving measure of corporate pool reduction resulted in an additional $15,836 savings. The WEM solution also automated many previously manual processes, including manual entering of all invoices received, which required painstaking entry of all billing elements, cost center and general ledger coding, remittance information, and location specifics. As a result, UPMC staff were freed to focus on more critical, satisfying work, which also added to the ROI.
A Broad-Based ROI
TEM and WEM solutions are a well-tested means for healthcare organizations to manage their growing reliance on mobile devices, obtain more visibility into how mobile devices are being used across their facilities, negotiate contracts and update rapidly changing applications, decipher incomprehensible invoices from carriers, and uncover and resolve billing errors. Moreover, an organization has the potential of reaching its ROI within as little as 60 days of implementing such a solution, in some instances reducing telecom costs by hundreds of thousands of dollars annually. Yet this potential for savings does not tell the whole story. The greatest value to be gained from a TEM or WEM partnership may be in the benefits of time, support, automation, technological advances, and security that it can provide.
Michael Lustig is CEO, Movero Inc., Atlanta (firstname.lastname@example.org).
a. This statistic is based on internal data collected by Movero, Inc. It is based on three metrics the company uses to approximate annual telecom spend: average annual telecom expense per bed = $2,500; telecom spend as a percentage of net patient revenue = 4 to 5 percent; total number of corporate liable mobile devices = >300. The third measure refers to wireless lines of service (voice, messaging, data) that are billed to an account established in the hospital's or company's name and for which the hospital or company has responsibility to pay.
Publication Date: Monday, July 02, 2012