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June 1, 2011
This past tax day my son texted me that he had received an electronic receipt the day after he had e-filed his tax return. He appended the text with ..."that's pretty creepy!”, referring to Big Brother. My reaction was more amazement. I hadn't really been following the IRS's e-filing initiative nor had I until that point realized that this was essentially a portal adoption success story.
Digital Dance Lessons
Let's look at the IRS's experience with e-Filing and how it learned its digital dance. Many aspects are applicable to the challenges of digital medical record keeping and meeting the communication burdens of Meaningful Use (MU). Besides, the IRS's success story has certainly not been missed by its sibling federal agencies that will be policing the Hi-Tech Act's provisions. If nothing else, there should be little doubt that there will be follow through on the goals of MU stages one, two and three.
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Paul C. Seel, MD, MBA
Vice President & Medical
Director
Sophrona Solutions
Minneapolis, MN
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Yes Virginia, Elephants Can Dance
First a little history. In 1986, the first year it was offered, 25,000 intrepid early adopters e-Filed their tax returns. Only those requesting a refund were eligible. By 2003, as the eligibility requirements were loosened, the number of e-Filers had grown to 53 million. In 2009, realizing the serious limitations both on the cost of processing paper returns and the limitations to data mining returns for compliance, Congress mandated the IRS receive 79% of individual's tax returns (about 145 million) electronically by 2015.
By The Numbers
The business case is clear and applicable to medical practices facing similar problems with cost and maintaining revenue as they manage the burdens of data entry in the MU era. Let's look at the cost side first. The IRS calculates processing cost of $2.87 per paper return vs. $.35 for one e-Filed. e-Filing achieves an 88% reduction in cost. In addition the IRS notes a reduction in errors from 25% for paper vs. 2.5% for electronically filed returns. Errors are reduced both at the point the IRS transfers the data from paper to key board as well as with software within the portal that will require the tax payer to fix 600 common errors before it can be filed. The IRS doesn't calculate a cost of the resulting rework from these errors, other than to comment that this is significant.
There is also a case to be made on the revenue side. Currently due to clerical limitations, only a small percentage of data is transferred to their data base. Once the entire return is in an electronic format, all of the data can be easily mined for tax compliance. Now that's creepy!
Adoption By Carrots and Sticks
The IRS has successfully used a system of carrots and sticks to drive e-Filing adoption. Most individual filers (vs. professional tax preparers) see the carrots. It's easier to file, a click of the mouse by 11:59 pm on April 15th vs. the midnight run for the last mail pick up. No postage and less wood pulp as well as an e-Receipt and paper trail and a refund in as little as ten days. Professional tax preparers are increasingly seeing mandates for e-Filing, but they will reap the cost benefits of a paperless and postage less system as well.
This Should Sound Familiar
By this point, this should be sounding familiar to medical providers facing their own challenges with data entry and the transition to digital record keeping. Following the IRS's lead and implementing a portal can be just as successful. Although there are many more benefits to portal communication between providers and with patients, I will focus only on the direct comparisons from the e-Filing story. On the cost side, data entry, and rework associated with data entry errors and complying with the communication demands of MU (which could just as well have been named the Medical Provider and Patient Communication Act) can be reduced if patients are enabled to enter their own data and to receive appointment reminders, clinical summaries and health histories electronically. On the revenue side, being able to easily include and mine data on patients' unmet needs and desires can enhance revenue. Mining this data can reveal unmet needs for everything from recall for follow up to enabling targeted marketing for discretionary services such as refractive surgery, premium IOL's and cosmetic procedures. A similar system of carrots and sticks can also be used to help patients adopt portal usage just as they adopted e-Filing. Mostly carrots for the patients; more convenience, no phone tag, targeted education and fulfillment of unmet needs to name a few. Providers see both from the government; the carrot of HiTech Act subsidies, the stick of reduced reimbursement after 2015.
Anyone care to dance?
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