Top 10 Selection Criteria for Outsourced Electronic Medical Billing Software as a Service (SaaS)

Software as a Service (SaaS) is the new generation of ASP models designed to reduce the exorbitant cost of specialized medical practice management software. The SaaS model is available for all aspects of medical practice management, including scheduling, billing, and electronic medical records (EMR) that are mission-critical to quality clinical service, business operations, and regulatory compliance. The SaaS model extends the benefits of the Application Service Provider (ASP) model, which in turn evolves from the traditional client-server model. This article briefly defines key concepts and outlines a set of guidelines for selecting SaaS providers.

Client-Server (CS) model

The CS model includes central servers for database and application logic as well as several client modules that are connected to the central servers via a local network. This architecture allows significant application logic to be mapped to the client computer.

Application architects considering the CS model must balance performance and security benefits against increased maintenance costs. CS benefits come from local control of application logic and data. CS deficiencies also stem from logic and data localization, as local disposition requires the user to take responsibility for application maintenance, including data security, redundancy, disaster recovery, upgrades, backups, etc.

The medical practice using the CS model needs to develop in-house expertise and manage numerous services including

  1. Internet connection, bandwidth and router
  2. Servers for web server software, email and firewalls
  3. database management
  4. Management of data feeds
  5. capacity management
  6. redundancy management
  7. Application upgrade management

From a financial perspective, CS models require the software user to make significant upfront investments in hardware and licensing, and to justify the business case with ROI-based arguments that make little sense given the pace of software and hardware innovation.

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Application Service Provider (ASP) model

The ASP model insulates the medical practice from high costs for specialized software and data maintenance obligations, but not from upfront investments in hardware and software licenses. Early ASP applications were built from traditional CS applications by offloading centralized data and application servers to a third-party hosting service provider and subsequently allowing the application to be accessed through an HTML user interface. The external hosting service provider would take responsibility for application maintenance and data protection.

The medical practice using the early ASP model manages two costs:

  1. Licensing and monthly support fee for the software provider
  2. Software hosting fee to the hosting provider (usually a pay-as-you-use model)

Software as a Service (SaaS) model

The SaaS model extends the ASP benefits from outsourcing system maintenance to simplified financial responsibilities. SaaS providers eliminate upfront medical practice costs by making the upfront investment in hardware and licensing on behalf of all medical practices using the application.

In order to make such a financial commitment, the hosting provider must develop in-depth expertise in application maintenance and new feature development. Such a requirement has become feasible with recent technological advances in security (128-bit SSL encryption) and browser-based client performance along with AJAX coding methodology. The new generation technology now compensates for the shortcomings of previous CS models and justifies network-native SaaS software development by design.

The higher specialization allows the SaaS provider to focus on customers’ business needs, resulting in more responsive service and greater customer satisfaction.

Selection of the SaaS provider

Medical practice when looking for SaaS providers needs to focus on the following issues:

  1. functionality: Does the application offer all the required functions? Have you documented functional requirements against the practice’s business goals, including financial, practice workflow, and staffing goals? Have you thought about integrated practice management features including patient scheduling, SOAP notes and billing?
  2. training schedule: Does the provider provide adequate training? What drives the training process: are you practicing workflow changes or available software features?
  3. Third party application interface: Does the application work with existing applications already deployed in the office? Which data exchange requirements must be met if you later decide on another application?
  4. perfomance: How do you measure application and service performance? Are formal performance metrics continuously available?
  5. HIPAA compliance: What controls are in place to allow access only on a “need to see” basis? Is every access logged via a secure mechanism?
  6. Service Level Agreement: What minimum service levels does the provider guarantee the customer? What are the penalties for violating SLA?
  7. Troubleshooting: Is there a formal process for communicating problem identification and resolution? How is it tracked?
  8. Data Access and Ownership: Who owns the data? Remember that according to HIPAA, the patient is the ultimate owner of health information. How secure and private is the connection? Does it have role-based access control (RBAC)?
  9. disaster recovery: How long would it take to recover from a disaster? Is a secondary data center available 24/7?
  10. demerger procedure: How long is data available after the relationship ends? Who is responsible for the data transfer to the new provider?
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