Sunday, November 25, 2012

ICD-10 The HealthCare Transformation Engine

Before the avid reader or not, reads this blog it is important that I set the right context of what my opinion is about. 

This blog is not about ICD-10 or what it entails. 

This blog is not about current state and future state or fate of HealthCare in US. Nor do I explicitly or implicitly mention my opinions thereof. 

This is my opinion based on factual evidence about why I consider ICD-10 the engine that will transform HealthCare in US (definitely atleast US and maybe more). 

Neither new nor untried, the World Health Organization’s (WHO)1 International Classification of Diseases, 10th Revision (ICD-10) code set is the international standard for disease reporting, surveillance, and mortality. It has been in use by WHO member states since 1994 for classification of clinical, epidemiological,and statistical analysis and quality reporting, and is the basis for national mortality and morbidity statistics. When the United States transitions from ICD-9 to ICD-10, it will be one of the last major countries in the world to adopt ICD-10

There has never been a dispute about the obsolescence of ICD-9. The challenge has been in how to upgrade: the migration path to ICD-10 is no small project. ICD-9 codes have been in use in the U.S. for more than 30 years and are deeply embedded in claims processing, reimbursement, and numerous other business operations. Migration to ICD-10 is an expensive undertaking and will be a major project with widespread impact on all stakeholders in even the smallest healthcare institutions. 

It took a government mandate to force all stakeholders, including hospitals, ambulatory care providers, and health plans, to comply with ICD-10 reporting standards. The Final Rule CMS–0013,2 which was published January 16, 2009, by the Department of Health and Human Services (HHS), set October 1, 2013, as the deadline for replacement of the ICD-9-CM code sets with ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification for diagnosis coding) and ICD-10-PCS (ICD-10-Procedure Coding System for inpatient hospital procedure coding) code sets. In February 2012, HHS announced its intention to delay the deadline, but the complexity of ICD-10 remains a top priority for the HIT industry.

As I stated above, I will refrain from giving my opinions about why US HealthCare is facing such a daunting task with the adoption and driving the transformation using ICD-10. 

Significantly more complex than ICD-9, the ICD-10 classification system dramatically expands the number of codes to be used. Whereas ICD-9 has about 17,000 codes, ICD-10 has more than 150,000 codes. ICD-10 includes support for more precise medical concepts and specificity. It also includes codes for newer information types, such as genomics and biomedical informatics. Because ICD codes are essential to care delivery and business processes, migration projects will affect nearly all operational systems and procedures ranging from bedside (clinical documentation and decision support), to finance (billing, claims processing, and revenue cycle management), to administration (analysis and reporting). The transition will require investments in training, changes to legacy systems, and testing with partners, vendors, and payers. In addition, the migration to ICD-10 will necessitate either a crosswalk between ICD-9 and the new ICD-10 codes in order to ensure system compatibility during the transition timeframe, or a reimplementation of all the business rules using the new ICD-10 coding system. Regardless, it will be a laborious process, because often organizations will have to go back to the original intent of the rule and rethink how it should be configured in the new coding system.

In a very recent Healthcare Informatics Research survey, 367 hospital-based healthcare professionals shared their organizations’ migration strategies. These include key drivers for the project, budgetary allocations, leadership, and challenges, as well as anticipated benefits and opportunities. All hospitals represented in this online survey plan to migrate to ICD-10, but migration plans differ in rationale and expectations.

Key ICD-10 Migration Strategies

Among the organizations that have not begun work on their 
ICD-10 migration projects or that are in the planning stages, most 
(58%) plan to embark upon the actual migration work in 2012. At 
the time of the survey, about one in five (19%) planned to start in 
late 2011, with a near equal number planning to delay their start 
until 2013. Some organizations are waiting for their vendors to 
get started, and some are hoping the deadline will be extended.

The ICD-10 Migration Team

More than half (57%) of hospitals surveyed are relying on the 
collaboration of both internal resources and a vendor to handle 
the migration to ICD-10. Teaching and academic institutions are 
most likely to take this approach. A significant group (41%) of 
those surveyed is relying on internal staff and resources to fulfill 
the migration. Very few organizations (2%) are relying solely on 
a vendor.

Health information management (HIM) professionals in medical 
records departments were most frequently cited as the lead for 
ICD-10 projects. They lead projects in nearly half of hospitals 
represented in the survey (43%) and most often reported leading 
projects in specialty care facilities, hospitals with fewer than 
200 beds, and hospitals in rural locations.

Importance of ICD-10 Migration Milestones

When asked to evaluate the importance of key ICD-10 migration milestones, most survey respondents ranked all key project milestones as “very important” to “extremely important” on a scale from 1, “not at all important,” to 10, “extremely important.” Recognizing the breadth and pervasiveness of the changes, more than half (55%) of those surveyed rated education and training on ICD-10 as “extremely important.”

Meeting ICD-10 Migration Challenges

Consistent with the overwhelming majority of survey respondents who rate education, awareness, and training as “very important” to “extremely important” to ICD-10 migration projects, survey respondents rate staff training as the migration’s biggest challenge,
with costs, specifically those related to remediation, a close second. Survey respondents rate support from executive management as one of their least important ICD-10 migration challenges, which may speak to hospital executives’ understanding of ICD-10 and the general support they have given ICD-10 project teams.

For the most part, the need to migrate to ICD-10 is understood throughout healthcare organizations. More than half (55%) of staff members understand the value and benefits. But among those surveyed, more than a quarter (27%) report that their staffs perceive
ICD-10 as a major issue and resent the mandate to change. This is understandable, as ICD-10 will result in extensive changes for clinical documentation, billing, and workflow in most hospitals, and staff may first perceive the migration as simply “more work.” But staff perceptions of ICD-10 and resistance to change are tied to level of awareness about the value that can be derived from moving to ICD-10 coding. For organizations that have not
begun migration work, or that are in the early stage of ICD-10 awareness and education, respondents are more likely to say that most of the staff perceives the migration as a major issue and resents the mandate to change. Organizations that are further along in the process, having progressed at least to the planning stage, find that levels of staff resistance decline. At later stages, once most staff members have received education, awareness, and/or training, they are better able to understand the need for change and the benefits of ICD-10.

Financial Concerns Related to ICD-10 Migration

The financial concerns related to ICD-10 implementation are widespread. Nearly all hospitals, no matter where they are in the migration cycle, say that the ICD-10 migration will strain their budgets due to the need for more personnel, application upgrades, education and training, and remediation costs.

Additional budget problems are expected to result from temporary reductions in cash flow due to more claims requiring additional documentation, increases in denied claims, and
slower turnaround times on reimbursements. Costs to educate and train staff are a major concern—an area of challenge that survey respondents expect will result in productivity losses as staff members come up to speed using the new coding system.

In addition, the vast majority of respondents expect to encounter coding backlogs due to migration. Sixty-three percent plan to combat this backlog by providing staff with computer-assisted coding tools, while 52% plan to hire interim staff. Fewer anticipate
outsourcing any or all of their coding operations.

ICD-10 Benefits and Opportunities

At an organizational level, an overwhelming majority (96%) of those surveyed think ICD-10 will improve quality care and patient safety initiatives, but they don’t always agree on the specifics.
Two out of three respondents see benefits directly related to the more detailed clinical data codes that will support meaningful use requirements and quality care initiatives, and more than half point to guidelines for clinical decision support.

The greatest organizational opportunities identified by three in four survey respondents are in health information management, where coding and medical transcription and abstraction will garner the greatest benefits. When migration, including ICD-9 to ICD-10 crosswalks and remediation, is complete, the IT department and its systems are also expected to benefit from a more streamlined workflow.

At a departmental level, 41% of survey respondents expect the finance department to derive the greatest benefits from ICD-10. Because of the wealth of improvements offered by ICD-10, those surveyed expect the finance department to benefit from more
accurate reimbursements and payments; support for performance improvements; the ability to create efficiencies and contain costs; support for business intelligence; and improved revenue cycle financials. Luckily, these benefits provide a strategic business advantage for all.

In Summary

Although nearly all hospitals (93%) have begun work on migrating to ICD-10, most remain in the planning stage or have just started assessments. Very few have reached the remediation or testing stages. Although one in three say they are only transitioning to
comply with the regulatory requirement, it is possible that as they move along the migration path and become more aware of the benefits and opportunities that ICD-10 can provide, they will incorporate plans that leverage the coding system into their organizations’ strategy and business processes.

The migration process for all hospitals will require an investment — both financial and on the part of hospital staffs. Organizations report the need for education and training, additional personnel, application upgrades, and remediation costs. Until all the systems,
including those of business partners, are fully implemented, the budgetary strain will be compounded by reductions in cash flow due to more claims requiring additional documentation, an increase in declined claims, and slower turnaround on reimbursements.
But once implemented, hospitals are expected to benefit from improvements in quality of care, patient safety, business processes, workflow, and financial positions.


1 World Health Organization, Geneva, Switzerland,

About Healthcare Informatics Research
Like Healthcare Informatics magazine, Healthcare Informatics Research provides expert insight and analysis on topics of major importance to the healthcare information technology (HIT) community. By conducting research with information technology professionals at care provider organizations of all types and sizes, and the companies that serve them, Healthcare Informatics Research provides objective, primary source information that serves as the basis for research reports, white papers, webinars, and presentations. Members of the Healthcare Informatics Research Panel are recruited from the reader base of Healthcare Informatics magazine to share their observations, opinions, and experiences.

To better understand progress and plans, along with challenges and opportunities faced by hospitals as they migrate from ICD-9 to ICD-10, Healthcare Informatics Research, in cooperation with other F500 company(ies), conducted an online survey. Drawn from 3,441 eligible members of the Healthcare Informatics Research Panel, a total of 504 healthcare providers completed the online survey. Of this group, 367 were hospital-based care providers. The survey respondents represent a diverse group of healthcare executives and managers employed at a broad range of hospital types, sizes, and care delivery locations. All are in the process of planning for or migrating to ICD-10.

Dare I challenge Gartner's Report on CRM

Market Overview According to Gartner

What Happened?
Over the past 10 years, CRM-related services have focused on the strategy and deployment of CRM software to support the sales and marketing operations of enterprises. Services to plan, customize, integrate and deploy these solutions were large, time-consuming and expensive initiatives. Typically the cost of consulting, implementation and management services was three to six times the cost of the software licenses, and Gartner has occasionally observed projects being as large as 10 times the cost of software. In addition to the services for initial deployment, there are also software maintenance fees (typically 16% to 22% of license fee) as well as ongoing application management services, with multiyear contracts being similar to the initial deployment fees. Thus, the total service fees over the life of the software have often been 10 to 15 times the initial license fees for the software. This investment has also had limited flexibility due to the level of customization of the implemented solution, along with the complexity of the business and technical environments.
Business executives have become the primary drivers for CRM solutions, and they have become less tolerant of large-scale software implementations and are also looking to CRM solutions to drive revenue growth. There has been a shift from the focus on large-scale CRM software deployments to a holistic view of the customer from an enterprise perspective. This focus shifted the consulting and system integration efforts related to CRM from software deployment to how the information related to the customers is integrated into the operational fabric of the enterprise.
What's Happening?
The CRM services market is estimated to be $30 billion, with robust growth forecast for enterprise application services from 2010 through 2015 (7.1% compound annual growth rate), which is significantly higher than most other application services (for more information, see "Forecast Analysis: Application Solution Services, Worldwide, 2010-2015"). During the past one to two years, disruptive forces — such as social CRM, mobility and cloud computing — are catalysts to force organizations to rearchitect their CRM strategy and integrate the sales and marketing components in a more holistic way that redefines the front-office operations and also integrates these with the existing back-office processes and systems. This requires an increased emphasis on enterprise architectures and information architectures that integrate the CRM applications into the business operations and with other operational systems (that is, ERP, supply chain management and electronic commerce). The architectures and integration will be different for each vertical and each enterprise, so this shift also requires much more of a business-centric consultative approach, with some level of vertical expertise, technology consulting, design and system integration efforts than stand-alone CRM software deployments. This shift encompasses data warehouse, analytics and BI competencies to derive maximum usage of the CRM analytics as part of sales performance improvements, customer service and enhanced marketing campaigns.
SaaS-based CRM and customer analytics are now part of most CRM solutions, and early leaders have found great return on these multidimensional initiatives that increase the richness and pervasiveness of the customer experience. Led by, SaaS now accounts for 31% of the CRM software market and is growing at 36% annually, which is three times the rate of on-premises CRM solutions. This rapid shift from large on-premises CRM to SaaS is having a dramatic impact on application services. Service providers are faced with maintaining the revenue streams from large on-premises CRM as the transition to the new multidimensional CRM solutions are taking place. Therefore, while traditional on-premises CRM solutions will still be the core for most CRM service providers, to compete effectively, providers must also offer multidimensional solutions that involve SaaS, mobile, business process management (BPM), social CRM and customer analytics that are integrated around CRM information. A more detailed discussion and marketplace implications can be found in "Competitive Landscape: CRM Service Providers, North America and Western Europe" and "Competitive Landscape: CRM Service Providers, Asia/Pacific."
How to Use This Magic Quadrant
Selecting the right CRM service provider requires focused and deliberate evaluation. The market for CRM services is maturing, but the ability to address complexity from business perspectives as well as achieve complex technology integration will be highly differentiating for the next few years. These factors have led providers to re-establish their CRM strategic focus, market strategies and competitive aims, forcing new approaches to differentiation and, thus, leading to changes in positions of providers included in the 2012 results. This year's Magic Quadrant saw notable shifts in the positioning of vendors, including:
  • The first offshore heritage provider positioned in the Leaders quadrant
  • Realignment of the Leaders
  • Separation of "India-centric" providers
  • Emergence of consultancies as CRM visionaries
While positions are helpful to understand the relative strengths and weaknesses, this research reflects providers whose focus on CRM produces scalable breadth and depth for this blend of business and technology skills. Use this Magic Quadrant to help inform your thinking, recognizing, however, that Leaders — as indicated by position — may not be the right fit for your business simply because of that positioning. Gartner offers an array of IT sourcing life cycle research, insight, tools and templates to assist your decision making for simple or complex project needs.

According to Gartner ®:

CRM implementation services continue to be in high demand and integrate many competencies, including CRM software, analytics, business consulting, mobility and social. The Magic Quadrant positions CRM service providers and assists enterprises in identifying providers that best fit their needs. 

Following is the infamous Magic Quadrant for CRM Service Providers, Worldwide:


Ability to Execute

Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills, etc., whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the sub-criteria.

Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the  overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all pre-sales activities and the structure that supports them . This includes deal management, pricing and negotiation, pre-sales support and the overall effectiveness of the sales channel.

Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, custom er needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of program s designed to deliver the  organization's message in order to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities.

Customer Experience: Relationships, products and services/program s that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, custom er support program s (and the quality thereof), availability of user groups, service-level agreements, etc.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure including skills, experiences, program s, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. 

Completeness of Vision 

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, custom er programs and positioning statements.

Sales Strategy: The strategy for selling product that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the custom er base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including verticals.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or preemptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.

My position is that the new fate of CRM is "CRM Plus" 

Gartner ® in my opinion has either failed to realize the invaluable "Plus" component or has included that in aforementioned evaluation criterion such as Strategy, Innovation or Product/Service. 

It has been noticed in multiple industries (healthcare, supply chain, banking and financial services) that seamless integration with existing business processes and enterprise assets is what F500 clients are looking for - is what they really need. Out of the box customization and mere knowledge of application of product development skill-sets are no longer sufficient - infact relying solely on those is most often or not proving to be a major disastrous (CRM) engagement. 

The demand is a purely personalized CRM implementation by:
(a) Leveraging commercial out-of-the-box products (like Oracle, Microsoft, SalesForce, etc. or even Zoho for that matter), and
(b) Designing and building a scalable enterprise wide CRM platform that integrates into existing business processes and IT assets without compromising performance, quality and security - three NFRs that are not only domain but also organization specific. 

That is what I call "CRM Plus". 


  1. Gartner ® publication: "Magic Quadrant for CRM Service Providers, Worldwide", 20 September 2012, ID:G00238208
  2. Gartner ® Analysts: Patrick J. Sullivan, Ed Thompson
  3. Gartner is a registered trademark of Gartner ®

Table 1. Ability to Execute Evaluation Criteria
Evaluation Criteria
Overall Viability (Business Unit, Financial, Strategy, Organization)
Sales Execution/Pricing
Market Responsiveness and Track Record
Marketing Execution
No rating
Customer Experience
Source: Gartner

Table 2. Completeness of Vision Evaluation Criteria
Evaluation Criteria
Market Understanding
Marketing Strategy
Sales Strategy
Offering (Product) Strategy
Business Model
No rating
Vertical/Industry Strategy
Geographic Strategy
Source: Gartner

Quadrant Descriptions


Leaders are performing well today, gaining traction and mind share in the market; they have a clear vision of market direction and are actively building competencies to sustain their leadership position in the market.


Challengers execute well today for the portfolio of work selected, but they have a less-defined view of market direction. Consequently, these service providers may be the "up and comers" of the future, or they may not be aggressive and proactive enough in preparing for the future.


Visionaries articulate important market trends and direction. However, they may not be in a position to fully deliver and consistently execute. They may need to improve their optimization of service delivery.

Niche Players

Niche Players focus on a particular segment of the market as defined by such characteristics as functional area (that is, sales, marketing or service), vertical industry, client size or project complexity. Their ability to execute is limited to those focus areas and, therefore, is assessed accordingly. Their ability to innovate may be affected by this narrow focus.