Mayo Clinic: Leading Nonprofit for Health Research and EHR Implementation - Research Paper

Introduction

Mayo Clinic remains to be among the leading nonprofit organizations as far as health research, medical consultation, and technological adoption is concerned. The internationally renowned medical group has more than 100 care units in the US and provides care services to an estimated 1.5 million patients (Sieja et al., 2019). Due to the growing number of patients and demand for medical services, the clinic has implemented the use of Electronic Health Record (EHR) systems for more comfortable and secure accessibility of health information. Indeed, in some cases, especially the complicated health cases, consultants share the system's information which increases the vulnerability of the organization to data privacy issues. Therefore, the adoption of the EHR systems puts the records of patient information at risks due to privacy level issues and data overloading. Consequently, Mayo Clinic has adopted epic EHR, a system that enables the organization to strip away any information considered unnecessary hence reducing the data overloading problem. However, the system's implementation, which has a total cost of $1.5 billion, can land the clinic in severe financial problems if appropriate measures are not implemented (Sieja et al., 2019). As Mayo Clinic's risk manager, I would like to recommend several risk financing options whose adoption will prevent the organization from suffering a possible financial crisis.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Legal and Ethical Financial Risk Obligations of an ACO

Regarding the legal and ethical financial risk obligations, Mayo Clinic operates under both financial risk and legal obligations being an Accountable Care Organization (ACO). Typically, ACOs are mandated with providing high quality care at a minimum cost to ensure the health of the entire population (Graber, Bhandary, & Rizzo, 2015). Undoubtedly, it is the responsibility of the clinic to protect the patient autonomy when it comes to cost savings while providing patients with information about the participation of their clinicians is an ethical requirement that all care providers should meet. Although it is the patient's right to choose their preferred doctor depending on their financial budget, sometimes, patterns of preferences control the cost-saving aspect. In the case where the decision puts an ACO into financial constraints, an ethical approach should be adopted to ensure that the patient's interest takes preference over the clinic's financial gain. ACOs have a moral obligation to ensure that their practices are in line with the signed agreements of limiting and reducing the cost associated with the health services offered (Graber et al., 2015). Nevertheless, some organizations may engage in unethical financial behavior by either raising charges for services provided or transferring the extra cost to outpatients. For instance, with epic EHR, Mayo Clinic can resolve to illegally ask for higher payments, particularly from private insurers, to increase profits. However, such practices are highly prohibited, and engagement in such may result in a legal action being taken against an ACO for violating antitrust laws (Jenkins & Jarrett-Pulliam, 2012).

Identification and Management of Risk Financing Issues

For proper identification and management of risk financing issues within Mayo Clinic, several strategies can be used. Precisely, the identification process begins with a breakdown of the organization's broader picture to consider each department individually to identify any existing weaknesses. Also, trying to get answers to insightful questions about the organizational departments can reveal flaws that may not have been considered (Kousky & Kunreuther, 2018). Conducting internal research would also be a helpful strategy that would help identify risks across Mayo Clinic. Internal analysis can detect problematic areas, such as those with abnormally high costs (Pugh, 2019).

Markedly, risks can also be identified by seeking employee feedback regularly. Employees in any organization are more likely to have some insight on risks encountered their day-to-day business practices (Kousky & Kunreuther, 2018). As stated earlier, the organization's adoption of epic EHR system comes with a financial risk in that the high cost of implementing the system might bring losses to the clinic. Undeniably, by adopting the system, Mayo Clinic does not get automatic assurance that the number of visiting patients will increase. Thus, it is possible to have a lower patient turnout than expected, which implies that the organization's cash flow can reduce instantly, causing a financial crisis. Again, with the adoption of the system, the organization is now exposed to cybersecurity issues which necessitate the need to have funds set aside to help in mitigating such threats. Besides, write-offs might occur if users in the clinic fail to adhere to the system's guidelines.

Key Performance Indicators

To keep track of the Mayo clinic's performance in the management of the possible risk financing issues, several measures can be applied. One of the crucial performance indicators is an improvement in the revenue cycle in the clinic. According to Remondino (2018), attention should be focused on claim denial rate, cash collection as a percentage of net patient services revenue, and account receivable days. Also, the organization can measure its performance in risk financing issues management by monitoring any improvements in safety and quality (Remondin, 2018). Evaluations should be done to establish the amount of time patient stay in the clinic after admission, which can be interpreted as a measure of the quality of services at the hospital. Indeed, an improvement in the quality of services offered is likely to result in an increased number of visiting clients, which translates to more profits for the clinic. Ultimately, with improved revenues, Mayo clinic will be in a better position to handle any risk financing issues that may arise.

Recommendations for Risk Financing Options

As a result of the risks linked to the system, it is paramount to have the success and continuity of the organization managed accordingly. To achieve this, we need to have a cost analysis of the EHR system to secure funds for maintenance and operations costs. Also, we will be required to set aside more capital for the organization's human resource department since there is the possibility of recruiting additional employees to adequately meet the medical needs of a growing patient number (Kousky & Kunreuther, 2018). Most importantly, we should be financially prepared for possible initial losses that Mayo Clinic might experience due to the project implementation, and this would be the most effective method of financial risk management.

Conclusion

In sum, for proper risk financing, enough funds should be channeled towards ensuring the effective running of the system. A sophisticated department should also be established to deal with all IT issues that might arise. Such a move will also necessitate the hiring of more employees (Pugh, 2019). Additionally, the clinic should ensure that there are alternative financial sources to cater to the organization's expenses before the adopted system starts generating revenue. For instance, the organization can consider the available credit lines to help the clinic run its daily operations until the generation of the anticipated returns. Although borrowing serves as a perfect strategy for risk financing, it should be short-term until Mayo Clinic starts making profits again. Admittedly, the adoption of epic EHR system is a brilliant move for the organization, and though it comes with a few risks, the potential benefits are numerous, and therefore the measures outlined herein should be applied to make the whole process a success.

References

Graber, A., Bhandary, A., & Rizzo, M. (2015). Ethical Practice Under Accountable Care. HEC Forum, 28(2), 115-128. doi: 10.1007/s10730-015-9280-x

Jenkins, M., & Jarrett-Pulliam, C. (2012). A Comparative of Magnet Organizations and Accountable Care Organizations. JONA'S Healthcare Law, Ethics, and Regulation, 14(2), 55-63. doi: 10.1097/nhl.0b013e31825c1a42

Kousky, C., & Kunreuther, H. (2018). Risk Management Roles of the Public and Private Sector. Risk Management and Insurance Review, 21(1), 181-204. doi: 10.1111/rmir.12096

Pugh, C. (2019). Electronic health records, physician workflows and system change: defining a pathway to better healthcare. Annals of Translational Medicine, 7(S1), S27-S27. doi: 10.21037/atm.2019.01.83

Remondino, M. (2018). Information Technology in Healthcare: HHC-MOTES, a Novel Set of Metrics to Analyse IT Sustainability in Different Areas. Sustainability, 10(8), 2721. doi: 10.3390/su10082721

Sieja, A., Markley, K., Pell, J., Gonzalez, C., Redig, B., Kneeland, P., & Lin, C. (2019). Optimization Sprints: Improving Clinician Satisfaction and Teamwork by Rapidly Reducing Electronic Health Record Burden. Mayo Clinic Proceedings, 94(5), 793-802. doi: 10.1016/j.mayocp.2018.08.036