Identifying the Healthcare Industry’s Differentiating Business Processes

To some extent, hospitals and healthcare provider organizations are like other businesses. They offer services and sometimes products and have employees caring for their customers.

Like other industries, they need solid software solutions for all functions and lines of businesses as they are typically provided with ERP systems: Financial Management, Cost Accounting, Materials Management, Procurement, HR Management, Asset Management, and Billing.

The unique aspect of the healthcare business is that the customers are patients and a large portion of the staff consists of highly educated and well-trained health professionals. Patients and health professionals are not typical customers or typical staff, which impacts the services and the focus and purpose of the entire organization.

Examples of healthcare business process specifics:

• All patient-related processes covering the entire cycle from patient care to receiving reimbursement require the integration with Electronic Medical Records (EMR) and other systems to ensure seamless operations.

• In procurement, medical equipment and devices are ordered. They require a good forecasting. Any lack can have serious consequences for human life.

• In materials management, standard materials must be managed, but also pharmacies be supported. They have specific requirements such as managing expiration dates.

• In HR management, the key challenges are hiring highly specialized staff and managing their training and performance. HR management also includes shift planning and retention–a huge topic for many regions.

• The cost accounting process, especially the account closing, is often complex in healthcare due to disparate systems. In cost center planning, adjustments in budgets for specific departments or cost centers must be possible. Case-based costing is appreciated.

• The financial management process also includes receivable´s management with health insurance companies or self-payers.

Besides process specifics, there are specific social, ethical, and legal aspects of the healthcare business that must be considered when providing software solutions for this industry. For example:

• Compliance

  Healthcare organizations must comply with local data protection legislation such as HIPAA (Health Insurance Portability and Accountability Act) in the U.S. or GDPR (General Data Protection Regulation) in the EU. It´s crucial that all processes and systems meet these regulatory requirements.

• Patients as Customers

  The customer model in healthcare introduces challenges related to quality, transparency, and ethical considerations. As patients often find themselves in a vulnerable position, relying on healthcare providers for assistance, this creates a dependency unlike the free choice customers enjoy in other contexts. Patient well-being must be safeguarded against the pressures of profit-making.

• Health Literacy

  Increasing health literacy is vital for patients to make informed decisions and participate actively in their treatment. This requires targeted communication and a shared decision-making process.

• Holistic Approach

  Healthcare providers must consider medical treatments and social, psychological, and environmental factors in care. Collaboration across disciplines is key to ensuring comprehensive patient care.

Overall, these industry specifics must be seen in context of the running business transformation summarized in the following image.

When talking about healthcare business processes and how software solutions can support the healthcare industry at the best, it is also important to understand the specific requirements and challenges of the ministries of health as a key stakeholder above the healthcare organizations.

A ministry of health (also known as department of health in some countries) defines health policies and provides services at national, state, or regional levels. The following graphic shows an example of its organizational structure.

A ministry of health usually consists of the following departments:

• The health research department ensures that the latest treatments and research outcomes are available for care.
• The health education department provides health information to citizens, including healthy living, nutrition, disease prevention, and pandemic guidelines.
• The department for elderly care focuses on services and policies for the elderly.
• Healthcare services is the biggest department including the following sections:
  • Public hospitals - in the preceding example, three different hospital groups.
  • Residential homes for senior citizens.
  • Shared services providing IT services, finance, and procurement to all departments and hospitals.

In the example, the shared service team is responsible to provide IT services to all hospitals and units, to consolidate and optimize IT delivery, and to provide a platform for scale. They also provide services like finance, procurement, and others centrally to all departments and hospitals within the ministry of health. When creating an integrated SAP system landscape, shared service teams can help to provide an overview of which systems are currently used, which core business processes are supported by shared services, which areas run in the individual groups or clusters, and which strategic areas that we plan to improve or introduce.

• Hospitals and healthcare providers function like businesses, requiring ERP systems for functions like Financial Management, HR, Procurement, and Billing, but with a unique focus on patient care and highly educated health professionals.
• A specific Healthcare business process is, for example, the Patient-to-Reimbursement process that must be integrated with Electronic Medical Records (EMR) for seamless operations from patient care to reimbursement.
• Healthcare business processes must fulfill specific social, ethical, and legal requirements that must be considered when implementing software.
• Healthcare providers are shifting to business models focused on value-based, patient-centered care, emphasizing transparency and end-to-end business processes.
• The Ministries of Health are an important stakeholder in defining policies and managing healthcare services, including research, education, elderly care, and public hospitals.
• Shared service departments usually play a significant role when implementing scalable, integrated system landscapes as they provide services cross the various departments to optimize healthcare delivery.