Enterprise-wide Business Apps Show Popularity
THE EXPLOSION OF BUSINESS SOFTWAREapplications for multi-unit healthcare facilities has been a financial boon for a handful of non-healthcare specific companies that have entered the competitive IT market over the last four years.
Skyrocketing revenue and client growth for such companies as Lawson Software, PeopleSoft, SAP America and Ross Systems has left such market leaders in the healthcare information system industry as HBO & Company, Atlanta, and SMS, Malvern, Pa., to play catch-up in business application development, says Ron Johnson, president of R.L. Johnson & Associates in Tracy, Calif.
"The traditional systems are 20 years old and are not designed to meet the needs of integrated delivery systems," Johnson says. "The newer companies to the industry have systems that meet the needs of multiple sites, can distribute payroll and benefits to several settings and can provide reports far exceeding the old two-tiered systems."
One of the newer IT buzzwords, enterprise-wide application programs are designed to capture payroll, track employee benefits and manage inventory across multiple business units. For example, nurses may work at several facilities under common ownership but under different cost centers. Enterprise-wide applications allow payroll and benefits to accumulate in one central data processing storage bank.
PeopleSoft’s enterprise-wide business application has allowed the University of Wisconsin Hospital and Clinics in Madison to improve data retrieval and analysis, says Dennis Dassenko, vice president and CIO. "It was a plus that they (PeopleSoft) weren’t a healthcare vendor," he says. "We thought vendors successful in other industries could bring a fresh perspective to managing costs for us. We are pleased with the tool and think it will really help the hospital manage the business side, purchasing, hiring and expense management."
PeopleSoft has experienced remarkable growth the past several years, says John Brooke, director of healthcare solutions for the Pleasanton, Calif.-based IT company. With more than 150 healthcare clients, PeopleSoft’s healthcare revenue in 1996 was $63.4 million, a 667 percent increase from 1994 revenue of $9.5 million, Brooke says.
Like most of the newer IT players, Lawson Software, Minneapolis, has formed a dedicated healthcare division to market and develop business application products, says Tony Marzulli, a Lawson spokesman. Since 1994, healthcare revenue has grown from approximately $3 million to more than $50 million in 1997. Marzulli predicts that by the year 2000, the company will derive about 40 percent of its total revenue from healthcare. Currently, Lawson has about 180 healthcare clients: Forty percent are hospitals, 30 percent medical groups, 16 percent IDS and 6 percent managed care organizations.
Ross Systems healthcare business doubled from 1996 to 1997, increasing to $3.6 million sales from $1.8 million, says Anne Wyatt Browne, vice president of marketing. The Atlanta-based software vendor also provides business application software to manufacturers and public organizations, she says, but the healthcare business has been growing at a faster rate than other sectors, amounting to 12 percent of total revenue of $31 million in 1997 compared with 8 percent of $24 million total revenue in 1996.
At SAP America, Larry Sincular, product manager in Atlanta, says the company has been targeting healthcare the past two years. Even though healthcare software sales have been brisk, the German company grosses $3 billion in worldwide revenue and healthcare amounts to only 1 percent of SAP’s total business. "IDS are going to be focusing more on business applications," Sincular says. "We expect to triple our healthcare revenue over the next year."
Paying Claims in Real Time
REALMED CORP. CONTENDS THAT SMART CARDS,which contain admission and health plan coverage and eligibility data, can save providers and patients time while reducing annual claims processing costs by 30 percent.
The Indianapolis-based claims processing company has signed partnership agreements with MCI Telecommunications, Digital Equipment Corp., Gemplus and Microsoft to create an electronic network for claims verification, processing and payment that links providers to insurance companies and HMOs. "We will completely eliminate paper to process health claims," says RealMed spokesman James Woelburn. "When you go to the doctor’s office, you carry a smart card with health plan information encoded on it."
Under the agreement, MCI will provide the secure private data network, Digital will provide personal computers and maintenance, Gemplus will supply the smart cards and smart card readers and Microsoft will install the office productivity software on the computers. RealMed is in contract negotiations with several HMOs to pilot the project, Woelburn says.