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Dr.s invest in things & then give it no more thought. [2008-04-11]
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Management? [2008-10-29]
I've been in this a good long while too and hear what you are saying about organizing. Many of us believe there has to be a better way.
Oneparadox in the MT-landthat has always puzzled me in the 10 or so places I worked: Why does any promotion from within a company result in less pay? I am a highly efficient producer of quality, so I have often been targeted for management, proofing, QA type positions, only to need to turn them down when I learn it involves at least a$5/hr pay CUT! I suppose the plus side is not having the pressure of production, but does this mean all the slowest, least efficient producers are in the lead positions? This is one of many things that does not make sense in the MT industry.
How can we sell the value of what we do? What magic PR would work? The bottom line is companies and hospitals need to cut corners, but if we could somehow convince them the corners they are cutting could be patient lives based on documentation errors, that would be key. We all have a stake in the nationwide shortage of MTs currently pegged at 40,000 and HIM supervisors pegged at 10,000.
Yet under current conditions of wages literally staying the same for the past decade despite credentialing, continuing education, and high quality, I think it will take a huge top-down or bottom up approach toenforce nationwide standards that really include MTs at the table.
Part of the problem is way bigger than us--the fragmented nature of healthcare in the US in general, and health documentation specifically. Can you imagine if every hospital, clinic and MT company had the same QA standards? Used the same IT network?Literally every place I have worked has a different system for QA, a different software platform, a different judge of what is adequate.
I am considering education inHIM because I want to: 1)Earn more and collaborate with others to solve problems, 2) Use my years of experience as an MT to benefit other MTs, 3) Not throw the baby out with the bathwater by neglecting years of education and proficiency in order to become a waitress and earn more in tips than I can transcribing my fingers to the bone!
There has to be some value in our collectiveexperience, and I have tried to support AHDI but with the down-spiraling economy, I cannot afford to renew my membership this year and will be paying off my state AHDI convention costs on my credit card for the next year. There has to be a better way!!
IC work [2008-07-23]
Snowbunny:
Thank you for your information - one of the things I was concerned about is the scheduling...i prefer working the graveyard shift because i am a night owl, and I don't like working evenings and absolutely deplore working '9-to-5'..
VR is here to stay [2008-07-03]
I think it serves any professional to keep up with any technology affecting their chosen profession. A medical Transcriptionist who refuses to learn editing of voice recognition files will end up being left behind. Having said that, if you're thinking about transcription work, then choose a school who isn't afraid of current technology and includes it in their curriculum.
I love voice recognition. Working with it on a high-end technical level has made me understand that there isn't now, nor probably ever will be, a substitution for the human element. Trained editors will ALWAYS have job security. Because any speech rec system is only as good as the people behind the scenes writing the software. It's not an unlimited technology, and it simply cannot interpret certain things. I love reading some of the gobbledegook it spits out, and snicker while I edit it.
Please stop being afraid of technology. Learn it, embrace it, get good at it, and secure your own future.
Physical line count [2008-06-27]
I recently started a new job at a Florida hospital. I was told the line count incentive was 7 cents for lines over 1000. Well, after my first few days at work, I would note that I had typed 50 to 60 reports and my physical line count was only 1500 lines per night. When asking my boss, she was very vague about how physical line count was calculated. By the way, this is supposedly dictaphone's calculation of line count. Can anyone out there explain things a little better to me? I would think that spaces are not counted nor headers...... I feel like I was misled during the interview definitely. Thanks for your help!
you get what you pay for - [2008-06-20]
I attended M-TEC, graduated in 2001, and have been working at home doing acute care ever since. I cannot say enough good things about their program or about Kathy and Susan (who were reallythe only instructors back then, not sure about now). I had recruiters banging down my cyber door to test when they learned where I had gone to school. I tested with a few of them and had job offers within a few days of graduation. Many, many companies will waive the 2-year experience requirement if you graduate from M-TEC. I hear Andrews is also very good. You cannot go wrong with either of them. Remember, cheap, quick, and easy will not sustain you in the long run because you will be ill equipped for work in the real world. Best of luck.
You're right but ... [2008-04-11]
Yes, absolutely, the suits and middle managers have no clue at all, nada, zip, zilch about medical transcription. However, many doctors actually invest in offshore MT companies .... according to Wall Street Journal. It was, oh, maybe 10 years ago that there was a caption or article about medical transcription being where the money is, as in investments, etc. You're right. Typically the MDs don't know and don't care who transcribes their dictation. Most do care, however, about quality at least to some degree. I'm just glad someone came up with a study as to cost effectiveness for whatever reason. It's like they're thrown us a crumb. Hope we get the whole cookie soon.
can't find message i left [2008-04-01]
left a quick message for an article I just read and I have no idea where it is. All I can find our these chatty things.??????
I would tend to somewhat agree [2007-05-11]
If you have a family you certainly cannot be working the hours that one must to earn a decent living. I myself work 16 hours and its ridiculous. I have to work this many hours to make what I used to make about 10 years ago. Things have changed much.
Definitely depends a lot on the doctor [2007-03-30]
We had one doctor at a hospital where I worked whose dictation was so wonderful we compared typing it to playing a piano. You just sit back, relax, and go. Fantastic!
And then there are others who have the long pauses, the constant changing of mind, the dreaded, Transcriptionist, please go back up to where I said..... I had one doctor who added so many things to one report after he said end that I actually lost count - at about seven sentences!
Also depends on the dictator [2007-02-27]
I have found that certain doctors when dictating, I can type right along with them. Others who are not so certain about their words or are constantly changing the way they word things or dictate take much longer. Also if I have to stop, backup and listen for a while to make sure I hear something correctly, I note that is why a report could take me longer.
MedQuist Announces Unaudited Financial Results, 6 Million in Operating Loss [2006-05-11]
MT. LAUREL, N.J.--(BUSINESS WIRE)--May 11, 2006--MedQuist Inc. (Pink Sheets: MEDQ.PK) announced today certain preliminary, partial and unaudited financial results, and provided updated information regarding previously-announced litigation and governmental investigations and proceedings. Once the Company completes the financial assessment and review of its billing practices disclosed in the Company's previous filings with the SEC, KPMG LLP, the Company's independent registered public accounting firm, will complete the audit the Company's financial statements. The Company is continuing the process of working toward becoming current in its periodic reports pursuant to the Securities Exchange Act of 1934. The Company's review of its current and prior period unaudited financial statements, as well as KPMG LLP's audits for those periods, may identify adjustments or reclassifications which may be reflected in the periods to which they relate. At this time, the Company cannot estimate the total costs of (i) the billing review, (ii) defense of the class action matters, (iii) the SEC investigation, and (iv) compliance with the Department of Justice investigation, all of which have been previously disclosed in either the Company's filings with the SEC or the Company's press releases. Accordingly, the only costs related to the defense of these matters that have been included in the results below are actual costs incurred through March 31, 2006 by the Company. Because the completion of the billing review and resolution of the litigation and governmental investigatory matters are pending, the Company is not certain whether any changes to the accounting treatment of any component of its consolidated financial statements will be required and, if any changes are necessary, whether any such changes would have a material impact on its current or prior period consolidated financial statements. Accordingly, the financial information set forth below is preliminary, unaudited, and subject to change based on the completion of the financial assessment and review of the Company's billing practices, resolution of the class action matters and governmental investigations and proceedings, and the completion of the review and/or audit of its financial statements, as appropriate.
The financial information and related narrative discussion set forth below is derived from the Company's internal books and records. The Company cautions investors not to place undue reliance on the financial information presented below. As a result of the developments described above and in the Company's previous SEC filings, the Company's financial statements have not been audited or reviewed by KPMG LLP, its independent registered public accounting firm. The financial information contained in this press release also has not been audited or reviewed by an independent registered public accounting firm. Such information is not a substitute for the information required to be reported in the Company's Forms 10-K and Forms 10-Q that have not yet been filed. There can be no assurance that the results of the billing review, and resolution of the litigation and governmental investigatory matters will not have a material adverse effect on the Company's revenue, results of operations and financial condition.
Legal Proceedings
Investigations and Proceedings Commenced by the SEC and the Department of Justice
As previously announced, the Securities and Exchange Commission (the SEC) is currently conducting a formal investigation of the Company. The Company will continue to fully cooperate with the SEC.
As previously announced, the Company received an administrative HIPAA subpoena for documents from the United States Attorney's Office for the District of Massachusetts on December 17, 2004. The subpoena sought information primarily about the Company's provision of medical transcription services to governmental and non-governmental customers. The information was requested in connection with a government investigation into whether Medquist and others violated federal laws in connection with the provision of medical transcription services. MedQuist continues to cooperate fully with the Department of Justice.
Shareholder Securities Litigation
As previously announced, a shareholder putative class action lawsuit was filed against the Company in the United States District Court District of New Jersey on November 8, 2004. The action, entitled William Steiner v. MedQuist, Inc., et al., Case No. 1:04-cv-05487-FLW (the Shareholder Putative Action), was filed against the Company and certain former Company officials, purportedly on behalf of an alleged class of all persons who purchased MedQuist common stock during the period from April 23, 2002 through November 2, 2004, inclusive (the Class Period). The complaint specifically alleged that defendants violated federal securities laws by purportedly issuing a series of false and misleading statements to the market throughout the Class Period, which statements allegedly had the effect of artificially inflating the market price of the Company's securities. The complaint asserts claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. Named as defendants, in addition to the Company, were its former president and chief executive officer and its former executive vice president and chief financial officer.
On August 16, 2005, a First Amended Complaint in the Shareholder Putative Class Action was filed against the Company in the United States District Court District of New Jersey. The First Amended Complaint named additional defendants, including certain current and former directors, certain former Company officers, the Company's former and current external auditors and Koninklijke Philips Electronics N.V. (Philips). Like the original complaint, the First Amended Complaint asserted claims under Sections 10b and 20(a) of the Securities and Exchange Act of 1934 (the Act) and Rule 10b5 of the Act. The Class Period of the original complaint was expanded 20 months and now includes the period from March 29, 2000 through June 14, 2004. Pursuant to an October 17, 2005 consent order approved by the Court, Lead Plaintiff Greater Pennsylvania Pension Fund filed a Second Amended Complaint on November 15, 2005. The Second Amended Complaint dropped Philips as a defendant, but alleges the same claims and the same purported class period as the First Amended Complaint. Plaintiffs seek unspecified damages. Pursuant to the provisions of the Private Securities Litigation Reform Act, discovery in the action is stayed pending the filing and resolution of the defendants' motions to dismiss, which were filed on January 17, 2006, and will be fully briefed by May 26, 2006. The Court has not set a hearing date on the motions. The Company believes that the claims asserted in the Second Amended Complaint are without merit, and is vigorously defending the action.
Customer Litigation
As previously announced, a putative class action was filed in the United States District Court Central District of California. The action, entitled South Broward Hospital District, dba Memorial Regional Hospital, et al. v. MedQuist, Inc. et al., Case No. CV-04-7520-TJH-VBKx, was filed on September 9, 2004 against the Company and certain present and former Company officials, purportedly on behalf of an alleged class of non-Federal governmental hospitals and medical centers that the complaint claims were wrongfully and fraudulently overcharged for transcription services by defendants based primarily on the Company's use of the AAMT line billing unit of measure discussed below. The complaint charges fraud, violation of the California Business and Professions Code, unjust enrichment, conversion, negligent supervision and violation of the Racketeer Influenced and Corrupt Organizations Act. Plaintiffs seek damages in an unspecified amount, plus costs and interest, an injunction against alleged continuing illegal activities, an accounting, punitive damages and attorneys' fees. Named as defendants, in addition to the Company, were a senior vice president, its former executive vice president of marketing and new business development, its former executive vice president and chief legal officer, and its former executive vice president and chief financial officer.
On December 20, 2004, the Company and individual defendants filed motions to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the putative action to the United States District Court District of New Jersey. On February 2, 2005, plaintiffs filed a Second Amended Complaint both adding and deleting named plaintiffs in an attempt to keep the putative action in the United States District Court Central District of California. On March 30, 2005, the United States District Court Central District of California issued an order transferring the putative action to the United States District Court District of New Jersey.
On August 1, 2005, the Company and the individual defendants filed their respective Answers denying the material allegations contained in the Second Amended Complaint. On August 31, 2005, the Company and individual defendants filed motions to dismiss the Second Amended Complaint for failure to state a claim and a motion to dismiss in favor of arbitration, or in the alternative, to stay pending arbitration. On December 12, 2005, the plaintiffs filed an Amendment to the Second Amended Complaint. On December 13, 2005, the Court issued an order requiring plaintiffs to file a Third Amended Complaint.
Plaintiffs filed the Third Amended Complaint on January 4, 2006. The Third Amended Complaint expands the claims made beyond issues arising from contracts based on AAMT line billing and beyond customers billed based on an AAMT line, alleging that the Company engaged in a scheme to inflate customers' invoices without regard to the terms of individual contracts and even in the absence of any written contract. The Third Amended Complaint also limits plaintiffs' claim for fraud in the inducement of the agreement to arbitrate to the three named plaintiffs whose contracts contain an arbitration provision and a subclass of similarly situated customers. On January 20, 2006 the Company and individual defendants filed motions to dismiss the Third Amended Complaint for failure to state a claim and a motion to compel arbitration of all claims by the arbitration subclass and to stay the case in its entirety pending arbitration. On March 8, 2006 the Court held a hearing on these motions, and took the matter under submission. The Court has not yet ruled on the motions. The Company believes that the claims asserted have no merit and intends to vigorously defend the putative action.
Medical Transcriptionist Litigation
Hoffmann Putative Class Action
As previously announced, a putative class action lawsuit was filed against the Company in the United States District Court Northern District of Georgia. The action, entitled Brigitte Hoffmann, et al. v. MedQuist, Inc., et al., Case No. 1:04-CV-3452, was filed with the Court on November 29, 2004 against the Company and certain current and former Company officials, purportedly on behalf of an alleged class of current and former employees and statutory workers of MedQuist, who are or were compensated on a per line basis for medical transcription services (the Class Members) from January 1, 1998 to the time of the filing of the complaint (the Class Period). The complaint specifically alleged that defendants systematically and wrongfully underpaid the Class Members during the Class Period. The complaint asserted the following causes of action: fraud, breach of contract, demand for accounting, quantum meruit, unjust enrichment, conversion, negligence, negligent supervision, and Racketeer Influenced and Corrupt Organizations Act violations. Plaintiffs sought unspecified compensatory damages, punitive damages, disgorgement and restitution. On December 1, 2005, the Hoffmann matter was transferred to the United States District Court District of New Jersey. As discussed immediately below under the heading Myers Putative Class Action, the Company believes that the claims presently asserted have no merit and intends to vigorously defend the putative action.
Myers Putative Class Action
As previously announced, a putative class action entitled, Myers, et al. v. MedQuist Inc. and MedQuist Transcriptions, Ltd., Case No. 05CV 4608 (JBS), was filed against the Company on September 22, 2005 in the United States District Court District of New Jersey. The action was brought on behalf of a putative class of MedQuist's employee and independent contractor transcriptionists who claim that they contracted with the Company to be paid per AAMT line, but were allegedly underpaid due to intentional miscounting of the number of characters and lines transcribed. The named plaintiffs asserted claims for breach of contract, unjust enrichment, and request an accounting.
The allegations contained in the Myers case are substantially similar to those contained in the Hoffmann putative class action and the two actions have now been consolidated. A consolidated amended complaint was filed on January 31, 2006. The named plaintiffs assert claims for breach of contract, breach of the covenant of good faith and fair dealing, unjust enrichment and demand an accounting. On March 7, 2006 the Company filed a motion to dismiss all claims in the consolidated amended complaint. The motion has now been fully briefed. The Court has not set a hearing date on the motion. The Company believes that the claims asserted in the consolidated actions have no merit and intends to vigorously defend the suit.
Derivative Litigation
On October 4, 2005, the Company announced the dismissal with prejudice of a shareholder derivative action filed in United States District Court District of New Jersey. The suit, Rhoda Kanter (Plaintiff) v. Hans M. Barella et al. (Defendants), was filed on November 12, 2004 against Philips and ten current and former members of MedQuist's Board of Directors. MedQuist was named as a nominal defendant.
In a ruling dated September 21, 2005, the Court found Plaintiff's allegations that MedQuist's Board members breached their fiduciary duties to the Company to be insufficient. The Plaintiff had alleged that for a period from 2001 through 2004, the Defendants violated their fiduciary duties by permitting artificial inflation of billing figures; failing to adequately ensure accurate and lawful billing practices; and failing to accurately report the Company's true financial condition in its published financial statements. To the contrary, the Court concluded: Far from alleging facts supporting a substantial likelihood of liability, Plaintiff here has painted a picture of a board of directors that acted responsively given the circumstances . . . . On October 3, 2005, plaintiffs filed a motion for reconsideration of the Court's order dismissing the action with prejudice. On November 16, 2005, the Court denied Plaintiffs' motion for reconsideration. On December 13, 2005, Plaintiffs filed a Notice of Appeal with the United States Court of Appeals for the Third Circuit.
On March 21, 2006, Plaintiff filed her opening brief on appeal. On April 20, 2006, MedQuist and the other defendants filed their opposition briefs. The appeal will be fully briefed by May 4, 2006. The Court of Appeals has not set a hearing date for the appeal.
Customer Accommodations
As previously disclosed, the primary allegations in a number of the litigation matters relate to how the Company interpreted the AAMT line billing unit of measure. The AAMT line billing unit of measure was developed in 1993 through a collaboration among several industry organizations with the intent of providing standardization in industry billing practices. However, due to inherent ambiguities in the definition of this unit of measure not fully anticipated at the time of its introduction, AAMT line-based billing was applied inconsistently throughout the medical transcription industry and eventually renounced by the groups initially responsible for its development. Despite these issues, a number of companies in the industry have continued to use AAMT line-based billing, and some customers still request proposals and contracts based on the AAMT line.
Like many medical transcription service providers, MedQuist once used the AAMT line unit of measure to calculate invoices for many of its medical transcription clients. It has been widely recognized and well documented throughout the industry, however, that the AAMT definition of a line is inherently ambiguous and subject to a wide variety of interpretations. In fact, no single set of AAMT characters was ever defined for this unit of measure. Accordingly, MedQuist began the process in 2004 of transitioning its AAMT line-based customers off the AAMT line unit of measure and, in April 2005, the Company completely eliminated the use of the AAMT line for billing and called on other industry transcription providers to follow its lead.
Due to these AAMT line unit of measure ambiguities, and the disparity in its interpretation, health care providers have raised concerns regarding charges for transcription services by their respective transcription providers, including the Company. In response to those concerns, and to foster ongoing business relationships with its customers, the Company has approached certain customers and offered to resolve any issues related to their prior AAMT line and other billing related issues.
As previously disclosed, the Company's Board of Directors has authorized Company management to make accommodation offers, up to an aggregate amount of $65.0 million, to certain customers to resolve any concerns over AAMT and other billing related issues. As of March 31, 2006, (i) the Company has entered into agreements with certain customers who have accepted accommodation offers to resolve concerns over AAMT and other billing related issues, and paid or credited an aggregate amount of $31.3 million as an accommodation to those customers and (ii) additional accommodation offers have been made by the Company to certain other customers in the aggregate amount of $11.9 million. From April 1, 2006 through the date of this release, the Company has entered into agreements with additional customers and paid or credited an aggregate amount of $2.9 million and has extended accommodation offers to additional customers in the aggregate amount of $1.1 million. Company management currently intends to make additional accommodation offers in the future, consistent with the Board's authorization described above, although the timing and amount of such offers have not yet been determined and the Company's plans may change in the future. The accommodation offers do not represent an estimate of potential liability, if any, in any of the previously disclosed litigation or investigatory matters pending against the Company.
The Company is unable to predict how many customers, if any, will accept the outstanding accommodation offers on the terms proposed by the Company, nor is the Company able to predict the timing of the acceptance (or rejection) of any of these outstanding accommodation offers. Until such offers are accepted, the Company may withdraw or modify the terms of the accommodation offers at any time. In addition, the Company is unable to predict how many of the future offers, if made, will be accepted on the terms proposed by the Company. The Company believes that its existing cash resources and cash flows from operations are sufficient to fund all of the customer accommodation offers it may make.
By accepting the Company's accommodation offers, the customer must agree, among other things, to release the Company from any and all claims and liability regarding prior AAMT and other billing related issues. The accommodation offers made to date, and those offers which may be made in the future, are not an admission of liability by the Company of any wrongdoing or an admission or acknowledgement that its billing practices with respect to such customers were or are incorrect. MedQuist Inc. -- Preliminary and Unaudited Financial Information
(in millions)
----------------------------------------------------------------------
Three months ended
----------------------------------------
March 31, 2006 March 31, 2005
------------------ ------------------
Revenues $ 97 $ 108
Operating loss $ (8) $ (2)
----------------------------------------------------------------------
As of As of
March 31, 2006 December 31, 2005
------------------ ------------------
Cash $ 164 $ 178
Debt $ - $ -
Three Months Ended March 31, 2006
Revenues:
Preliminary, unaudited results indicate that the Company's revenues decreased $11 million to $97 million for the three months ended March 31, 2006 from approximately $108 million for the comparable 2005 period. This decline in revenues is largely due to decreases in transcription outsourcing services and product sales of $9 million or 10%, and $2 million or 27%, respectively. The decline in transcription outsourcing revenues is largely due to a decrease in the volume of lines transcribed primarily related to clients for whom we no longer provide transcription services. Additionally, pricing pressures continued on the base transcription business during the first quarter 2006, but revenues were impacted far less by pricing pressures than in the comparable 2005 period. Management expects that pricing pressures will continue for the foreseeable future but that the introduction of several new sales initiatives and improved customer service programs should cause transcription volume to stabilize or improve throughout the duration of 2006.
Operating Loss:
Preliminary, unaudited results indicate that our operating loss increased $6 million to a loss of approximately $8 million for the three months ended March 31, 2006 from an operating loss of $2 million for the comparable 2005 period. The operating loss of $8 million was primarily attributable to $9 million of costs associated with the following: (1) costs related to the ongoing billing review including (i) legal fees incurred in connection with governmental investigations and proceedings and defense of the class action matters and (ii) non-legal professional fees; and (2) increased expenses related to prior years' accounting reviews and audit. Operating loss was also impacted by the $11 million decline in revenues over the same period.
Balance Sheet Highlights:
As of March 31, 2006, the Company had $164 million in cash and cash equivalents and no debt. The $14 million decrease in cash as of March 31, 2006 compared with December 31, 2005 was primarily attributable to accommodation payments ($10 million) and capital expenditures ($4 million). There were no issuances of capital stock or other securities for the three months ended March 31, 2006.
The Company expects to incur significant costs and expenses in the future relating to the ongoing billing review, defense of the class action matters and governmental investigations and proceedings, and accommodation agreements. These costs and expenses include (i) legal fees relating to the SEC and Department of Justice investigations and proceedings, (ii) legal fees relating to defense and resolution of the litigation matters described above, (iii) customer accommodation payments and credits, and (iv) non-legal professional fees. The timing and level of these costs and expenses is, in many cases, not within the Company's control. While the Company is unable to predict the timing and level of these costs and expenses, the Company currently believes that it has sufficient resources, including cash on hand and cash flow from operations to fund these costs and expenses. However, there cannot be any assurance that unanticipated changes in the level of these costs will not exceed the Company's available cash resources, nor can there be any assurance that sufficient financing from external sources will be available to the Company on acceptable terms, if at all. In the event that the Company's cash requirements exceed its available cash resources, or if the timing of such costs and expenses requires the Company to divert cash resources away from operations, the Company may not be able to execute its operating plan, which could have a material adverse effect on the Company's business and results of operations.
Other Developments
Restructuring:
As previously disclosed, in conjunction with the Company's movement to a single national service and support organization, a restructuring plan was developed in 2005 to consolidate approximately forty-eight (48) operating facilities and centralize certain components of the business in order to improve operating efficiencies. The Company is expecting to incur total restructuring costs of up to $8.5 million associated with this plan through the end of the fourth quarter of 2006. The Company incurred $1 million of restructuring costs for the three months ended March 31, 2006. This restructuring is expected to generate annualized savings of approximately $18.5 million. The Company realized approximately $1.9 million in savings during the three months ended March 31, 2006. Specifically, the Company has shifted resources to a single national service delivery and support organization for all of the Company's services and products and is in the process of eliminating local service centers.
The plan does not contemplate reductions of, and the Company has no current intentions to reduce, its medical transcription workforce. Rather, the Company will continue in its efforts to hire additional qualified transcriptionists. Further, although the Company is consolidating its local service centers as described above, customer-facing teams, led by account managers, will continue to coordinate customer support on the local level. The customer-facing teams will continue to work with and be supported by the Company's centrally managed customer service organization.
Real nice to know [2006-03-29]
that the doctor has so much more respect for a machine than he does the human ears that have to make a living listening and typing the reports day after day! This is what the doctor said...
“Try a few charts each day, and sit down where it’s quiet, where you can relax and concentrate on your speaking habits. Tech support is great; they’ll help you, and be sure to read the help file “How to Speak to a Computer”—and the manual. Especially for often repeated phrases, the voice-actuated “macros” are great, a real time-saver. It’s well-worth the time you invest in learning how to use this tool.”
What are the pitfalls? “Mumbling,” says Dr. Block, “that’s the main problem. Doctors are used to dictating in a low, monotone mumble, as fast as they can. A person might be able to handle it by going back and listening to the recording again and again. But for voice recognition, doctors need to speak in a normal, conversational tone of voice, just like we are doing right now. Speak normally, and Dragon has no problem, it works very well. It’s really quite simple.”
Neurologist saves $12,000 per year on medical transcription [2006-02-22]
Recognition vs. Transcription
W. Palm Beach, FL neurologist saves $12,000 per year on medical transcription using state-of-the-art voice recognition software
[ClickPress, Tue Feb 21 2006] Dr. H. Steven Block, M.D. uses Dragon NaturallySpeaking Medical Edition, voice recognition software for medical professionals, to eliminate a very real business problem--medical transcription costs-- which six years ago, began topping the $1,000-a-month mark. Today, a doctor can easily spend three times that amount.
Very open about his high regard for the Dragon Medical VR product, Dr. Block had much to say about its place in his solo practice: “I purchased Dragon Medical from Eric Fishman’s company, Nuance, which is actually located in the same building as my practice, on the floor above me. Neurology is all about ‘nuance’, no pun intended. But ‘nuance’ is really the best word to describe the health effects of a neurological problem. It has been a major focus of my practice.”
“Very subtle neurological changes can have devastating health consequences. You have to be able to communicate those subtleties in order for a medical record to have any meaning.”
“I see some really sick patients. Using an on-the-spot note generation product like Dragon, instead of a transcription service, let’s me get back to the referring physician with a fast note, usually within 10 minutes of seeing the patient. That kind of speed in delivering a medical exam note with ‘nuance’ can mean a great deal to everyone involved. You see, I can’t type. I never learned how to type. My kids who grew up instant-messaging can type faster than I can speak. They don’t need Dragon. But for me, Dragon is a wonderful tool.”
Dr. Block, 49, is no stranger to high technology tools:
“There are only so many hours in the day,” he laughed, driving down the road, talking via wireless cell phone headset, “and I’m very detail-oriented. I couldn’t be without Dragon, quite frankly.” One word I did not hear from Dr. Block is the word “downtime”. It doesn’t seem to exist in his vocabulary.
Having traveled the long and winding upgrade path for both Dragon and laptop hardware, Dr. Block has watched and participated in the evolution of the product for six years. “Like a surfer looking for the perfect wave,” he joked. The improvement he’s seen in the most recent version of Dragon Medical—combined with a high-RAM laptop with at least 512MB—has boosted performance to an almost unbelievable 99.5% real time voice recognition accuracy level, according to his observations.
His advice to new users: “If you haven’t tried Dragon Medical in the last four years,” he said, “try it again, the way it is now, with the new speech engine. It uses mathematical models to analyze word groups. There is a learning curve, but the training is not that bad, consisting of you reading a 15 minute script into a microphone, then a little touch-up here and there.”
“Try a few charts each day, and sit down where it’s quiet, where you can relax and concentrate on your speaking habits. Tech support is great; they’ll help you, and be sure to read the help file “How to Speak to a Computer”—and the manual. Especially for often repeated phrases, the voice-actuated “macros” are great, a real time-saver. It’s well-worth the time you invest in learning how to use this tool.”
What are the pitfalls? “Mumbling,” says Dr. Block, “that’s the main problem. Doctors are used to dictating in a low, monotone mumble, as fast as they can. A person might be able to handle it by going back and listening to the recording again and again. But for voice recognition, doctors need to speak in a normal, conversational tone of voice, just like we are doing right now. Speak normally, and Dragon has no problem, it works very well. It’s really quite simple.”
He stated that using a handheld Sony digital voice recorder with removable memory stick allows him to dictate anywhere, anytime, then later, “feed” the sound file to Dragon, achieving about 98% voice recognition accuracy. (Please note: If you are considering making a recording for later voice recognition by Dragon, be sure and use 16-bit resolution .avi format, or Dragon won’t even try to “digest” it. It won’t bother with a recording of poor quality, because the end result would be useless.)
Although he is considering it, Dr. Block has not yet adopted a commercial EMR(Electronic Medical Records) software system for his medical records, mainly because of concerns about interoperability standards. (Coming soon to an EMR near you.)
However, by using Dragon Medical as his “front-end” for the creation of detailed paper medical records, email reports, and digital-FAX messages, Dr. Block not only uses computers, but has also created a highly personal and expressive way to “chart” a patient, unmatched in detail, depth, and the “human touch” by out-of-the-box EMR software.
Would EMR software developers do well to discuss with this doctor any design plans for a voice-controlled, voice-recognition-based EMR program? I think so. Will a “hands-free” EMR workstation which responds to voice commands--as does the entire Dragon program--ever be used to help maintain a “sterile field” in the medical environment of the future? It certainly worked well on the Starship Enterprise, didn’t it?
The Top 10 Reasons to Become a Medical Transcriptionist [2006-01-19]
January 17th 2006Work From Home You've seen the commercials: medical transcriptionists are in high demand. Should you consider this field? Below are the top ten best reasons to become a medical transcriptionist. If these characteristics are something you're looking for in a job, then medical transcription may be for you. To get started, try “Working at Home the American Way in Medical Transcription” by Debra Jan Hebert, an experienced (http://medtrans4u.com) medical transcriptionist.
10. Quick entryMany lucrative professions require extensive training and advanced degrees. Other jobs in the medical field can take eight or more years of grueling, expensive schooling to begin. In medical transcription, you can begin your work in a year or less, avoiding huge debts and student loans. Some employers require no training, especially not if you already have good English skills and some experience in a medical field.
9. Contribute to societyAs a medical transcriptionist, you can contribute to society in many ways. In addition to the economic contributions you'll make to the overall economy, experienced medical transcriptionists become well-versed enough to catch errors or even act as patient advocates. Medical transcriptionists can see inconsistencies and correct them as well. By quickly returning transcripts to hospitals, private practices and individual doctors, medical transcriptionists can ensure fast patient care in the medical system.
8. Work from homeWhile the Bureau of Labor Statistics reports that 70% of medical transcriptionists still work in hospitals or physicians' offices, medical transcription is becoming increasingly popular as a work-from-home profession. The convenience of a home office appeals to some people on its own virtues, while parents may value the opportunity to stay close to their young children and still support the family full time. No matter what the reason, if you're looking to work from home, you should seriously consider medical transcription.
7. Excellent payWhile compensation methods may vary, almost all medical transcriptionists enjoy excellent pay, even in entry-level positions. According to (http://medtrans4u.com) DJS Enterprises, you can earn as much as $50,000 to $80,000 a year as a medical transcriptionist. If your pay is production-based, as you gain more experience and dexterity in medical transcription your salary will steadily increase. If you're looking for a job that can really support your family working from home, medical transcription may be for you.
6. Job securityThe US Bureau of Labor Statistics reports that the job outlook for medical transcriptionists is definitely positive. The medical transcription field is expected to grow at a faster than average rate through the year 2014. This indicates that medical transcriptionists will have plenty of opportunities to find steady work, even if they work at home on a freelance basis for at least another 8 years.
5. Job satisfactionWhile job satisfaction may vary from job to job and person to person, if you enjoy being able to visibly track the progress you've made in a day, medical transcription can bring you a high level of job satisfaction. As your completed medical reports pile up, you'll be able to see how much you've accomplished.
4. Set your own hoursMost of the medical industry operates 24 hours a day. Many hospital and at-home medical transcriptionists are able to set their own hours at any time to accommodate their families or other commitments. No matter when you're able to work, there's a medical record waiting to be transcribed. In medical transcription, you can work when it's most convenient for you.
3. Comfortable work environmentWhether they work in a hospital, a private office or from home, medical transcriptionists enjoy a comfortable work environment. Noise levels are low, safety risks are minimal and strenuous labor is negligible. In medical transcription, you'll enjoy a comfortable office and dedicated work station to transcribe. And what could be more comfortable than working in your own home?
2. Transferable skillsMedical transcriptionists acquire many transferable skills that they can use in other jobs if ever they want to leave the industry. In addition to a basis in the medical field, transcriptionists learn skills that could apply as a court reporter or an administrative assistant. Transcriptionists also develop their English skills, which can be useful in all types of positions that involve writing and editing. Whether medical transcription is a step on your path or your dream job, the skills you learn can improve your overall career outlook.
1. Rewarding workWhy do people become doctors? The vast majority of the people who endure 8 or more years of schooling and incur substantial debts and student loans to become doctors do so because they love to help people and to cure them of their illnesses. Every member of the medical field helps in this endeavor. What could be more rewarding than to contribute to the speedy treatment of people who desperately need your help?
If these ten things sound like characteristics you're looking for in a job, look into medical transcription. You can learn more about medical transcription from books, the Bureau of Labor Statistics and other materials online.
MedQuist Announces Preliminary, Partial and Unaudited [2006-01-19]
MT. LAUREL, N.J. --(Business Wire)-- Jan. 19, 2006 -- Medquist Inc. (Pink Sheets: MEDQ.PK) announced today certain preliminary, partial and unaudited financial results, and provided updated information regarding previously-announced litigation and governmental investigations and proceedings. Once the Company completes the financial assessment and review of its billing practices disclosed in the Company's previous filings with the SEC, the Company expects that KPMG LLP, its independent registered public accounting firm, will review and/or audit the Company's financial statements, as appropriate. The Company is continuing the process of working toward becoming current in its periodic reports pursuant to the Securities Exchange Act of 1934. The Company's review of its current and prior period unaudited financial statements, as well as KPMG LLP's audits for those periods, may identify adjustments or reclassifications which may be reflected in the periods to which they relate. At this time, the Company cannot estimate the total costs of (i) the billing review, (ii) defense of the class action matters, (iii) the SEC investigation, and (iv) compliance with the Department of Justice investigation, all of which have been previously disclosed in either the Company's filings with the SEC or the Company's press releases. Accordingly, the only costs related to the defense of these matters that have been included in the results below are actual costs incurred through December 31, 2005 by the Company. As described in the Customer Accommodations discussion under the heading Legal Proceedings, an accrual has been made in an amount up to which the Company's Board of Directors has authorized the Company to make accommodation offers to certain of its customers. Because the completion of the billing review and resolution of the litigation and governmental investigatory matters are pending, the Company is not certain whether any changes to the accounting treatment of any component of its consolidated financial statements will be required and, if any changes are necessary, whether any such changes would have a material impact on its current or prior period consolidated financial statements. Accordingly, the financial information set forth below is preliminary, unaudited, and subject to change based on the completion of the financial assessment and review of the Company's billing practices, resolution of the class action matters and governmental investigations and proceedings, and the completion of the review and/or audit of its financial statements, as appropriate.
The financial information and related narrative discussion set forth below is derived from the Company's internal books and records. The Company cautions investors not to place undue reliance on the financial information presented below. As a result of the developments described above and in the Company's previous SEC filings, the Company's financial statements have not been audited or reviewed by KPMG LLP, its independent registered public accounting firm. The financial information contained in this press release also has not been audited or reviewed by an independent registered public accounting firm. Such information is not a substitute for the information required to be reported in the Company's Forms 10-K and Forms 10-Q that have not yet been filed. There can be no assurance that the results of the billing review, and resolution of the litigation and governmental investigatory matters will not have a material adverse effect on the Company's revenue, results of operations and financial condition. Legal Proceedings Investigations and Proceedings Commenced by the SEC and the Department of Justice As previously announced, the Securities and Exchange Commission (the SEC) is currently conducting a formal investigation of the Company. The Company will continue to fully cooperate with the SEC. As previously announced, the Company received an administrative HIPAA subpoena for documents from the United States Attorney's Office for the District of Massachusetts on December 17, 2004. The subpoena sought information primarily about the Company's provision of medical transcription services to governmental and non-governmental customers. The information was requested in connection with a government investigation into whether MedQuist and others violated federal laws in connection with the provision of medical transcription services. MedQuist continues to cooperate fully with the Department of Justice. Shareholder Securities Litigation As previously announced, a shareholder putative class action lawsuit was filed against the Company in the United States District Court District of New Jersey on November 8, 2004. The action, entitled William Steiner v. MedQuist, Inc., et al., Case No. 1:04-cv-05487-FLW (the Shareholder Putative Action), was filed against the Company and certain former Company officials, purportedly on behalf of an alleged class of all persons who purchased MedQuist common stock during the period from April 23, 2002 through November 2, 2004, inclusive (the Class Period). The complaint specifically alleged that defendants violated federal securities laws by purportedly issuing a series of false and misleading statements to the market throughout the Class Period, which statements allegedly had the effect of artificially inflating the market price of the Company's securities. The complaint asserts claims under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. Named as defendants, in addition to the Company, were its former president and chief executive officer and its former executive vice president and chief financial officer. On August 16, 2005, a First Amended Complaint in the Shareholder Putative Class Action was filed against the Company in the United States District Court District of New Jersey. The First Amended Complaint named additional defendants, including certain current and former directors, certain former Company officers, the Company's former and current external auditors and Koninklijke Philips Electronics N.V. (Philips). Like the original complaint, the First Amended Complaint asserted claims under Sections 10b and 20(a) of the Securities and Exchange Act of 1934 (the Act) and Rule 10b5 of the Act. The Class Period of the original complaint was expanded 20 months and now includes the period from March 29, 2000 through June 14, 2004. Pursuant to an October 17, 2005 consent order approved by the Court, Lead Plaintiff Greater Pennsylvania Pension Fund filed a Second Amended Complaint on November 15, 2005. The Second Amended Complaint dropped Philips as a defendant, but alleges the same claims and the same purported class period as the First Amended Complaint. Plaintiffs seek unspecified damages. Pursuant to the provisions of the Private Securities Litigation Reform Act, discovery in the action is stayed pending the filing and resolution of the defendants' motions to dismiss, which were filed on January 17, 2006, and will be fully briefed by May 1, 2006. The Company believes that the claims asserted in the Second Amended Complaint are without merit, and is vigorously defending the action. Customer Litigation As previously announced, a putative class action was filed in the United States District Court Central District of California. The action, entitled South Broward Hospital District, dba Memorial Regional Hospital, et al. v. MedQuist, Inc. et al., Case No. CV-04-7520-TJH-VBKx, was filed on September 9, 2004 against the Company and certain present and former Company officials, purportedly on behalf of an alleged class of non-Federal governmental hospitals and medical centers that the complaint claims were wrongfully and fraudulently overcharged for transcription services by defendants based primarily on the Company's use of the AAMT line billing unit of measure discussed below. The complaint charges fraud, violation of the California Business and Professions Code, unjust enrichment, conversion, negligent supervision and violation of the Racketeer Influenced and Corrupt Organizations Act. Plaintiffs seek damages in an unspecified amount, plus costs and interest, an injunction against alleged continuing illegal activities, an accounting, punitive damages and attorneys' fees. Named as defendants, in addition to the Company, were a senior vice president, its former executive vice president of marketing and new business development, its former executive vice president and chief legal officer, and its former executive vice president and chief financial officer. On December 20, 2004, the Company and individual defendants filed motions to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the putative action to the United States District Court District of New Jersey. On February 2, 2005, plaintiffs filed a Second Amended Complaint both adding and deleting named plaintiffs in an attempt to keep the putative action in the United States District Court Central District of California. On March 30, 2005, the United States District Court Central District of California issued an order transferring the putative action to the United States District Court District of New Jersey. On August 1, 2005, the Company and the individual defendants filed their respective Answers denying the material allegations contained in the Second Amended Complaint. On August 31, 2005, the Company and individual defendants filed motions to dismiss the Second Amended Complaint for failure to state a claim and a motion to dismiss in favor of arbitration, or in the alternative, to stay pending arbitration. On December 12, 2005, the plaintiffs filed an Amendment to the Second Amended Complaint. On December 13, 2005, the Court issued an order requiring plaintiffs to file a Third Amended Complaint and set forth a briefing schedule for the filing of anticipated motions to dismiss the Third Amended Complaint, which have been set for hearing on March 8, 2006. Plaintiffs filed the Third Amended Complaint on January 4, 2006. The Third Amended Complaint expands the claims made beyond issues arising from contracts based on AAMT line billing and beyond customers billed based on an AAMT line, alleging that the Company engaged in a scheme to inflate customers' invoices without regard to the terms of individual contracts and even in the absence of any written contract. The Third Amended Complaint also limits plaintiffs' claim for fraud in the inducement of the agreement to arbitrate to the three named plaintiffs whose contracts contain an arbitration provision and a subclass of similarly situated customers. The Company believes that the claims asserted have no merit and intends to vigorously defend the putative action. Medical Transcriptionist Litigation Hoffmann Putative Class Action As previously announced, a putative class action lawsuit was filed against the Company in the United States District Court Northern District of Georgia. The action, entitled Brigitte Hoffmann, et al. v. MedQuist, Inc., et al., Case No. 1:04-CV-3452, was filed with the Court on November 29, 2004 against the Company and certain current and former Company officials, purportedly on behalf of an alleged class of current and former employees and statutory workers of MedQuist, who are or were compensated on a per line basis for medical transcription services (the Class Members) from January 1, 1998 to the time of the filing of the complaint (the Class Period). The complaint specifically alleged that defendants systematically and wrongfully underpaid the Class Members during the Class Period. The complaint asserted the following causes of action: fraud, breach of contract, demand for accounting, quantum meruit, unjust enrichment, conversion, negligence, negligent supervision, and Racketeer Influenced and Corrupt Organizations Act violations. Plaintiffs seek unspecified compensatory damages, punitive damages, disgorgement and restitution. On December 1, 2005, the Hoffmann matter was transferred to the United States District Court District of New Jersey. The Company believes that the claims presently asserted have no merit and intends to vigorously defend the putative action. Myers Putative Class Action As previously announced, a putative class action entitled, Myers, et al. v. MedQuist Inc. and MedQuist Transcriptions, Ltd., Case No. 05CV 4608 (JBS), was filed against the Company on September 22, 2005 in the United States District Court District of New Jersey. The action was brought on behalf of a putative class of MedQuist's employee and independent contractor transcriptionists who claim that they contracted with the Company to be paid per AAMT line, but were allegedly underpaid due to intentional miscounting of the number of characters and lines transcribed. The named plaintiffs assert claims for breach of contract, unjust enrichment, and request an accounting. The allegations contained in the Myers case are substantially similar to those contained in the Hoffmann putative class action and the two actions have now been consolidated. On January 3, 2006, a consent order was executed pursuant to which the Hoffmann and Myers plaintiffs will file a single, consolidated class action complaint on or before January 31, 2006. As with the Hoffmann putative class action, the Company believes that the claims presently asserted in the Myers action have no merit and intends to vigorously defend the consolidated actions. Derivative Litigation On October 4, 2005, the Company announced the dismissal with prejudice of a shareholder derivative action filed in United States District Court District of New Jersey. The suit, Rhoda Kanter (Plaintiff) v. Hans M. Barella et al. (Defendants), was filed on November 12, 2004 against Philips and ten current and former members of MedQuist's Board of Directors. MedQuist was named as a nominal defendant. In a ruling dated September 21, 2005, the Court found Plaintiff's allegations that MedQuist's Board members breached their fiduciary duties to the Company to be insufficient. The Plaintiff had alleged that for a period from 2001 through 2004, the Defendants violated their fiduciary duties by permitting artificial inflation of billing figures; failing to adequately ensure accurate and lawful billing practices; and failing to accurately report the Company's true financial condition in its published financial statements. To the contrary, the Court concluded: Far from alleging facts supporting a substantial likelihood of liability, Plaintiff here has painted a picture of a board of directors that acted responsively given the circumstances . . . . On October 3, 2005, plaintiffs filed a motion for reconsideration of the Court's order dismissing the action with prejudice. On November 16, 2005, the Court denied Plaintiffs' motion for reconsideration. On December 13, 2005, Plaintiffs filed a Notice of Appeal with the United States Court of Appeals for the Third Circuit. Customer Accommodations The primary allegations in a number of the litigation matters relate to how the Company interpreted the AAMT line billing unit of measure. The AAMT line billing unit of measure was developed in 1993 through a collaboration among several industry organizations with the intent of providing standardization in industry billing practices. However, due to inherent ambiguities in the definition of this unit of measure not fully anticipated at the time of its introduction, AAMT line-based billing was applied inconsistently throughout the medical transcription industry and eventually renounced by the groups initially responsible for its development. Despite these issues, a number of companies in the industry have continued to use AAMT line-based billing, and some customers still request proposals and contracts based on the AAMT line. Like many medical transcription service providers, MedQuist once used the AAMT line unit of measure to calculate invoices for many of its medical transcription clients. It has been widely recognized and well documented throughout the industry, however, that the AAMT definition of a line is inherently ambiguous and subject to a wide variety of interpretations. In fact, no single set of AAMT characters was ever defined for this unit of measure. Accordingly, MedQuist began the process in 2004 of transitioning its AAMT line-based customers off the AAMT line unit of measure and, in April 2005, the Company completely eliminated the use of the AAMT line for billing and called on other industry transcription providers to follow its lead. Due to these AAMT line unit of measure ambiguities, and the disparity in its interpretation, health care providers have raised concerns regarding charges for transcription services by their respective transcription providers, including the Company. In response to those concerns, and to foster ongoing business relationships with its customers, the Company has approached certain customers and offered to resolve any issues related to their prior AAMT line and other billing related issues. The Company's Board of Directors has authorized Company management to make accommodation offers, up to an aggregate amount of $65.0 million, to certain customers to resolve concerns over AAMT and other billing related issues. As of December 31, 2005, (i) the Company has entered into agreements with certain customers who have accepted accommodation offers to resolve concerns over AAMT and other billing related issues, and paid or credited an aggregate amount of $20.5 million as an accommodation to those customers and (ii) additional accommodation offers have been made by the Company to certain other customers in the aggregate amount of $13.8 million. From January 1, 2006 through the date of this release, accommodation offers have been made to additional customers in the aggregate amount of $1.7 million. Subject to the previously mentioned authorization of the Company's Board of Directors, Company management currently intends to make additional accommodation offers in the future, although the timing and amount of such offers have not yet been determined and the Company's plans may change in the future. The accommodation offers do not represent in any way the Company's estimate of potential liability, if any, in any of the previously disclosed litigation or investigatory matters pending against the Company. The Company is unable to predict how many customers, if any, will accept the outstanding accommodation offers on the terms proposed by the Company, nor is the Company able to predict the timing of the acceptance (or rejection) of any of these outstanding accommodation offers. Until such offers are accepted, the Company may withdraw or modify the terms of the accommodation offers at any time. In addition, the Company is unable to predict how many of the future offers, if made, will be accepted on the terms proposed by the Company. The Company believes that its existing cash resources and cash flows from operations are sufficient to fund all of the customer accommodation offers it may make. By accepting the Company's accommodation offers, the customer must agree, among other things, to release the Company from any and all claims and liability regarding prior AAMT and other billing related issues. The accommodation offers made to date, and those offers which may be made in the future, are not an admission of liability by the Company of any wrongdoing or an admission or acknowledgement that its billing practices with respect to such customers were or are incorrect. -0- *T MedQuist Inc. - Preliminary and Unaudited Financial Information (in millions) ---------------------------------------------------------------------- Three months ended ----------------------------------- 12/31/2005 12/31/2004 ---------------- ---------------- Revenues (1) $ 96 $ 112 Operating loss (1) $ (78) $ 0 Cash (2) $ 178 $ 196 Debt (2) - Current $ 0 $ 25 - Long term $ 0 $ 0 Twelve months ended ----------------------------------- 12/31/2005 12/31/2004 ---------------- ---------------- Revenues (3) $ 411 $ 456 Operating (loss)income (3) $ (98) $ 25 Cash (2) $ 178 $ 196 Debt (2) - Current $ 0 $ 25 - Long term $ 0 $ 0 ---------------------------------------------------------------------- Notes: (1) Information presented for the three months ended (2) Information presented as of the date noted above (3) Information presented for the twelve months ended *T Three months ended December 31, 2005 Revenues: Preliminary, unaudited results indicate that the Company's revenues decreased from approximately $112 million for the three months ended December 31, 2004 to approximately $96 million for the comparable 2005 period. The decline in revenues is largely due to a decrease in the volume of lines transcribed primarily related to clients for whom we no longer provide transcription services. Additionally, while pricing pressures continue on the base transcription business, the pricing pressure has not had as great an impact on revenues during the second half of 2005 as it did in the first half. Management expects that pricing pressure will continue for the foreseeable future but that the introduction of several new sales and improved customer service initiatives will cause transcription volume to stabilize or improve in 2006. Operating Income: Preliminary results indicate that operating income declined $78 million from approximately $0 million for the three months ended December 31, 2004 to an operating loss of approximately $78 million for the comparable 2005 period. The operating loss was attributable to the following: restructuring charges ($4 million), audit fees in connection with the Company's 2003, 2004 and 2005 fiscal years ($4 million), asset impairments ($2 million) and $69 million in costs incurred during the three months ended December 31, 2005 related to the ongoing billing review, including: (i) customer accommodation payments and accruals ($60 million), (ii) legal fees incurred in connection with governmental investigations and proceedings and defense of the class action matters, and (iii) non-legal professional fees. Operating income in 2005 was also impacted by the $16 million decline in revenues over the same period. Fiscal 2004 results reflect $6 million in costs related to the ongoing billing review. Twelve Months ended December 31, 2005 Revenues: Preliminary, unaudited results indicate that the Company's revenues decreased from approximately $456 million for the twelve months ended December 31, 2004 to approximately $411 million for the comparable 2005 period. The decline in revenues is due to (i) a decrease in the volume of lines transcribed primarily related to clients for whom we no longer provide transcription services and (ii) reductions in transcription service rates due to pricing pressure in the medical transcription industry. Management expects that pricing pressure will continue for the foreseeable future but that the introduction of several new sales and improved customer service initiatives will cause transcription volume to stabilize or improve in 2006. Operating Income: Preliminary, unaudited results indicate that operating income declined $123 million from an operating income of approximately $25 million for the twelve months ended December 31, 2004 to an operating loss of approximately $98 million for 2005. The operating loss was attributable to the following: restructuring charges ($4 million), audit fees in connection with the Company's 2003, 2004 and 2005 fiscal years ($4 million), asset impairments ($2 million) and $101 million in costs incurred in 2005 related to the ongoing billing review, including: (i) customer accommodation payments and accruals ($65 million), (ii) legal fees incurred in connection with governmental investigations and proceedings and defense of the class action matters, (iii) non-legal professional fees, and (iv) costs associated with separation and replacement of the Company's management team, including members at the executive level. Operating income in 2005 was also impacted by the $44 million decline in revenues over the comparable period, which represents the impact of both the pricing pressures experienced most strongly in the first six months of 2005 and of volume declines throughout the twelve months ended December 31, 2005. Fiscal 2004 results reflect $15 million in costs related to the ongoing billing review. Balance Sheet Highlights: At December 31, 2005, the Company had $178 million in cash and cash equivalents and no debt. There were no additional issuances of capital stock or other securities for the twelve months ended December 31, 2005. The Company expects to incur significant costs and expenses in the future relating to the ongoing billing review, defense of the class action matters and governmental investigations and proceedings, and accommodation agreements. These costs and expenses include (i) legal fees relating to the SEC and Department of Justice investigations and proceedings, (ii) legal fees relating to defense and resolution of the litigation matters described above, (iii) customer accommodation payments and credits, and (iv) non-legal professional fees. The timing and level of these costs and expenses is, in many cases, not within the Company's control. While the Company is unable to predict the timing and level of these costs and expenses, the Company currently believes that it has sufficient resources, including cash on hand and cash flow from operations to fund these costs and expenses. However, there can be no assurance that unanticipated changes in the level of these costs will not exceed the Company's available cash resources, nor can there be any assurance that sufficient financing from external sources will be available to the Company on acceptable terms, if at all. In the event that the Company's cash requirements exceed its available cash resources, or if the timing of such costs and expenses requires the Company to divert cash resources away from operations, the Company may not be able to execute its operating plan, which could have a material adverse effect on the Company's business and results of operations. Other Developments Restructuring: As previously disclosed, in conjunction with the Company's movement to a single national service and support organization, a restructuring plan has been developed which consolidates approximately forty-eight (48) facilities and centralizes certain components of the business. The Company is expecting to incur restructure costs associated with this restructuring plan of up to $8.5 million and the restructuring is expected to generate annualized savings of approximately $18.5 million. Specifically, MedQuist has shifted resources to a single national service delivery and support organization for all of the Company's services and products, eliminating local service centers. This transition has resulted in the consolidation of approximately thirty-eight (38) facilities as of December 31, 2005, with ten (10) more scheduled over the next six months. The plan does not contemplate reductions of, and the Company has no current intentions to reduce, its medical transcription workforce. Rather, the Company will continue in its efforts to hire additional qualified transcriptionists. Further, although the Company is consolidating its local service centers as described above, customer-facing teams, led by account managers, will continue to coordinate customer support on the local level. The customer-facing teams will work with and be supported by the Company's centrally managed customer service organization.
Transcend and MDI Founder Announce Stock Option Agreement [2005-08-19]
ATLANTA -- Aug. 18, 2005 -- Transcend SERVICES, INC. (Nasdaq SmallCap: TRCR) today announced that a co-founder of Medical Dictation Inc. (MDI), Sue McGrogan, has agreed to invest $200,000 in Transcend as of August 15, 2005 through the purchase of 71,942 shares of common stock. This purchase is part of an overall option agreement that provides four options to purchase $200,000 each that could result in $800,000 of total investment over the next two years. Half of the investment will be in cash and the other half in the forgiveness of a note due to Sue McGrogan from her sale of MDI to Transcend. These purchases will be made at a price of 110% of the average market price for the ten trading days prior to said purchase. The remaining three options are exercisable on the six- month anniversary dates of the execution of the option agreement and cannot be carried forward once the option date has passed.
MDI is a transcription company that has been in operation since 1988 in Brooksville, Florida founded by Sue McGrogan and her mother Liz McGrogan. The McGrogans first entered the industry in 1972 as owner-operators of a medical transcription company in New Jersey. MDI recently became a wholly owned subsidiary of Transcend.
Both Liz and Sue McGrogan have played an important role in Transcend since the acquisition of MDI by Transcend on January 31, 2005. Liz currently serves as interim general manager at MDI, which has grown from $6.4 million in revenue in 2004 to a current annualized level of over $8 million. Sue is a Business Unit Manager at Transcend, managing a significant portion of Transcend's field operations. Alex Munoz, Transcend's EVP of Operations stated, Having worked closely with Liz and Sue during the integration of our two companies, their level of increased commitment is exciting as we continue to make changes within the company. Liz McGrogan agreed, commenting, We are both very excited about the future of Transcend and MDI, and the potential growth through new business and acquisitions. Sue added, The decision to invest money into Transcend is indicative of our confidence in Transcend and its future.
Telecommuting grows in health care industry [2005-08-06]
August 5, 2005When Rebecca Bryant, a coding specialist for Scottsdale Healthcare, was scheduled for knee replacement surgery last December she asked her employer if she could telecommute during her recovery. She figured it would be temporary until she had regained her ability to walk.
But working from her Chandler home inputting codes used for billing, research and other purposes proved so successful that she and her employer decided to make it permanent.
It is so convenient. I’m saving gas, I’m helping prevent pollution, I’m really doing my thing and getting to enjoy my home, she said.
The company, which operates two hospitals in Scottsdale, has been so happy with the experiment they have expanded it to let five of their coders work from home, and they plan to have 14 coders on line from home full time by September, according to Jan Elezian, coding manager for the health care company.
It is hard to find good coders in the Valley, she said. We looked at retention (of employees) as a really big factor in our decision.
In addition to making employees happier, it also has improved their productivity by up to 20 percent, Elezian said. They don’t have the office distractions.
The expansion of teleworking to include coders comes in addition to about 40 Scottsdale Healthcare transcriptionists, who have typed doctors’ verbal dictation and instructions for patients for many years from their homes.
Health care companies are among a group of businesses that are finding good uses for telecommuting — having employees work from home instead of driving to the office. The concept, also known as telework, can work in industries such as health care, finance and others where some employees spend much of their time inputting data into computers.
One of the business advantages is that it reduces costs by cutting back the amount of office space needed for the staff.
According to a study sponsored by Valley Metro, the transit company that promotes alternatives to the onedriver-per-car transportation, the percentage of Valley employers with more than 50 employees that offer telecommuting as an option increased from 20 percent in 2001 to 28 percent last year.
Part of the reason for the increase is the development of virtual private networks, which are allowing remote computer users to gain secure access to the central computer system.
Cox Communications is providing a managed virtual private network to Scottsdale Healthcare in which Cox manages the router through which Scottsdale Healthcare’s data traffic is channeled as well as technical and support services, eliminating the need for the health care provider to operate the system with its own personnel.
Many companies have virtual private networks, but more companies are migrating to managed VPN, said Darryl Drenon, Cox Arizona director of business services. We become your IT department.
In addition to facilitating work from home, VPNs allow employees to directly access the office computer from hotels on the road or from branch offices, he said.
Another health care company that uses telecommuting is the Mayo Clinic, which allows 118 medical transcriptionists and two quality assurance officers to work from their homes full time. Several other quality and management staffers work from home part time.
The program started about a decade ago when seven transcriptionists were allowed to telecommute only two days a week, said Nancy Buss, manager of the medical transcription department.
As our staff grew, we realized that in order to recruit and retain transcriptionists, we would have to offer telecommuting as an option, she said.
Many companies that offer transcription services offer telecommuting from anywhere in the United States, and the Mayo Clinic had to at least offer telecommuting locally to keep staff, she said.
She said the clinic is considering expansion of the program to allow employees to telecommute from further afield such as from second homes in northern Arizona.
The only major disadvantage is the work-at-home employees don’t get the social connections that come with working with others in an office, she said. But they usually get over that quickly.
Transcriptionists are independent workers, she said. They like their own space and control over their work environment.
Telecommuting doesn’t work for all job categories such as people who deal directly with customers. Bank One has found that it works best for those who are involved in analysis, telephone and computer work, said spokeswoman Mary Jane Rogers.
It depends on the job and how to best serve the customers, she said. Thousands of our employees have direct contact with customers.
Mesa also has found teleworking is better for some jobs than for other, said Kevin Wallace, transportation planning administrator, who oversees the city’s telework program.
For some folks it worked, and for others it didn’t, he said. For some people we thought it would work, but they had meetings and other things that required them to physically be here.
He added the monitoring of employee work is important to make sure the work is getting done from home.
MedQuist Announces Key Findings of Independent Review [2005-08-05]
MedQuist Announces Key Findings of Independent Review of Client Billing
MT. LAUREL, N.J., July 30 /PRNewswire-FirstCall/ -- MedQuist Inc. (MEDQ.PK), a leading provider of electronic medical transcription, health information and document management services, today announced the key findings of an independent review of the company's billing methods. The findings were presented to the company's Board of Directors, which initiated a broad program of changes and reforms to the company's business practices. The Board of Directors also took disciplinary action against certain company employees.
The Board of Directors announced today changes in its senior management. Howard S. Hoffmann, an experienced and accomplished interim manager, has been appointed as MedQuist's interim CEO with a clear mission to implement the changes and reforms to the company's business practices, including its billing practices, and to bring the company current in its SEC filings. Steve Rusckowski, who had temporarily assumed the CEO position in December 2003 in addition to his Board position and led the company through the difficult period of the independent review, will continue as a member of the MedQuist Board. The Board also announced that it has accepted the resignations of its Chief Financial Officer, Brian Kearns, and its Chief Legal Officer, John Suender.
This was an extremely thorough and comprehensive review that has clearly identified areas in which we must make changes and improvements, said Scott Weisenhoff, the lead Director on the review.
Added Howard S. Hoffmann, who is also a principal and partner at Nightingale Associates, LLC, of Stamford, CT.: Our priority mission now is to work with our customers to clarify and, where appropriate, rectify any problems, make the needed changes and reforms internally, and become current in our SEC filings. The changes we are making address a pressing industry challenge and our goal is to ensure that billing methods are reliable, accurate, measurable and verifiable to customers using transcription services. We hope that our actions will encourage other medical transcription companies to address the challenge presented by AAMT line-based billing methods.
Review Findings
The review, conducted for the Board of Directors by Debevoise Plimpton LLP and PricewaterhouseCoopers LLP, identified a number of issues regarding the company's billing practices. The review found that with respect to its contracts that called for billing based on the AAMT line, the company used ratios and formulas to determine the number of AAMT transcription lines for which clients were billed rather than counting the number of relevant characters to determine a billable line as provided for in the contracts. With respect to these contracts, the company's use of ratios and formulas as a surrogate for counting was generally not disclosed to the clients. In addition, a company employee explained inaccurately to KPMG LLP (KPMG), the company's outside auditors, the computation of AAMT lines on one of the company's major transcription platforms. The use of ratios and formulas caused some clients to be billed more and some to be billed less than if the counting method provided for in the contracts had been used. In addition, the ratios and formulas for certain client accounts were changed by the company, generally without disclosure to clients, in order to affect profit margins. Due to the ambiguities inherent in the AAMT line definition and the limited extent of the information available to the company for earlier periods, the company is unable at this time to determine with any reasonable certainty the aggregate amount of overbilling.
The AAMT line definition was originally developed in the early 1990s by three major medical transcription industry groups, including The American Association for Medical Transcription (AAMT). They defined a line as 65 characters and also defined the term character to include such things as macros and function keys. However, these definitions turned out to be inherently ambiguous and difficult to apply in practice. AAMT itself withdrew its endorsement of these units of measure in 1998. However, many buyers of transcription services have continued to purchase transcription services and issue requests-for-proposals that ask for quotes in AAMT line units.
The review concluded that the rationale for using the ratios and formulas was to adopt a consistent and commercially reasonable billing method, given the lack of common standards in the industry and the ambiguities inherent in the AAMT definition. The review found no evidence that the amounts MedQuist billed clients, in general, were commercially unfair or inconsistent with what competitors would have charged. Moreover, MedQuist has been able to attract and retain clients in a competitive market.
The next step for the company is to assess the financial impact on customers and on MedQuist. When the financial assessment has been finished and KPMG has completed its consideration of the review findings, and pending any additional work KPMG may believe appropriate to do as a result of the findings, MedQuist anticipates that KPMG will then be able to complete its audit of the company's 2003 financial statements and its review of MedQuist's interim quarterly results. Until KPMG's audit and review have been completed, MedQuist will be unable to finalize its financial statements and file its Form 10-K for the year ended December 31, 2003 and its Form 10-Q for the quarter ended March 31, 2004. The company also will likely not be able to file its Form 10-Q for the quarter ended June 30, 2004 in a timely manner. Because the company has not yet completed its financial assessment and the results have not been reviewed by KPMG, MedQuist is unable at this time to estimate with any reasonable certainty the effect that the review of its billing practices may have on its reported revenues, results of operations and financial position.
MedQuist has also been informed by the staff of the Securities and Exchange Commission that the SEC has opened a formal investigation of the company. The company will continue its efforts to cooperate with the SEC, as it has since it voluntarily advised the SEC of the company's review of its billing methods.
Business Practice Reforms and Management Changes
The Board of Directors has outlined a broad program of business practice changes and reforms that will be instituted beginning immediately. Highlights include: * Enhance a mandatory and formal ethics training program that was
recently instituted.
* Accelerate an existing program that is migrating clients from several
disparate legacy billing platforms to the company's new platform,
DocQment Enterprise Platform, or DEP. The company intends to utilize
only consistent, client-verifiable billing units of measure.
Additionally, the company will meet with clients currently billed on
the basis of an AAMT line definition to determine an alternate and
verifiable unit of measure acceptable to the client pending their
agreement to convert to the new platform. MedQuist has succeeded in
converting approximately 35% of its transcription revenue to DEP.
* Develop definitive and clear protocols for count methodology and
billing, institute periodic internal audits and new reporting
mechanisms to make sure all billing systems are in accordance with
client contracts.
* Reform the contract review and administration process to clarify any
ambiguous terms with respect to units of billing, and develop a
centralized contracts administration database to track compliance with
client contracts.
* Expand the customer feedback system to allow entry, by any employee, of
customer comments and complaints.
* Assign a Chief Compliance Officer to develop, maintain and enforce
compliance with all company policies and procedures.
The Board also took disciplinary action against five MedQuist employees. Said Gregory Sebasky, MedQuist's President: We believe that we have done what is necessary and appropriate in light of the results of the review. We will continue to build a strong and motivated organization and continue MedQuist's commitment to a high standard of ethics and customer satisfaction.
Statements in this press release that are not historical facts are forward-looking statements within the meaning of the securities laws and regulations. These include statements regarding becoming current in SEC filings, solidifying relationships with our customers and any other expectations or anticipated events. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially.
Electronic Health Records: Just around the Corner? Or over the Cliff? [2005-08-02]
We recently implemented a full-featured electronic health record in our independent, 4-internist, community-based practice of general internal medicine. We encountered various challenges, some unexpected, in moving from paper to computer. This article describes the effects that use of electronic health records has had on our finances, work flow, and office environment. Its financial impact is not clearly positive; work flows were substantially disrupted; and the quality of the office environment initially deteriorated greatly for staff, physicians, and patients. That said, none of us would go back to paper health records, and all of us find that the technology helps us to better meet patient expectations, expedites many tedious work processes (such as prescription writing and creation of chart notes), and creates new ways in which we can improve the health of our patients. Five broad issues must be addressed to promote successful implementation of electronic health records in a small office: financing; interoperability, standardization, and connectivity of clinical information systems; help with redesign of work flow; technical support and training; and help with change management. We hope that sharing our experience can better prepare others who plan to implement electronic health records and inform policymakers on the strategies needed for success in the small practice environment.
Policymakers and physician leaders are counting on electronic health records to improve quality of health care and revitalize practice , and a recent report forecasts that widespread use of electronic health records will save the health care system $77.8 billion annually—5% of total health care expenditures in the United States. It is difficult to get an accurate figure for use of electronic health records by primary care physicians, but estimates range from 5% to 13%. Seventy-eight percent of physicians in the United States practice in groups of 8 or fewer; therefore, understanding and overcoming the obstacles faced by small practices will be essential to successful use of electronic health records.
Although the experience of small physician practices that implemented electronic health records has been usefully described, more work is needed. Our independent, community-based, 4-internist primary care medical practice went live with an electronic health record system on 14 July 2004. We report on our experience.
Our medical practice, Greenhouse Internists, has operated in Philadelphia since 1989. We serve an economically and ethnically diverse urban and suburban population. We derive approximately 60% of our revenue from capitated managed care and participate in Medicaid (through 2 Medicaid health maintenance organizations) and Medicare (fee-for-service and capitated managed care). We handle more than 16 000 patients encounters yearly, and our focus is comprehensive ambulatory care.
We have 1 registered nurse who handles clinical and administrative contact with insurers, forms, telephone triage, and routine prescription refills; a front desk staff that handles reception, referrals, and telephone calls; and medical assistants who handle chief symptoms, vital signs, phlebotomy, and electrocardiography. We have no mid-level practitioners. Before we instituted electronic health records, we used computers for scheduling and billing only.
When our malpractice carrier stopped offering occurrence coverage and we had to accept claims made coverage, we used the 2-year savings window to invest in an electronic health records system. Our motivation was complex: We hoped it would automate frustrating repetitive processes (such as prescription refills) and minimize some of the ways in which we routinely failed to meet patient expectations (such as one of us not knowing what another had said the previous day to a patient on the telephone). We hoped that the system might pay for itself, but we were not at all confident that it would. We made a leap of faith that pay for performance was coming and that this investment would eventually position us for greater success. Like many of our colleagues, we believed that we would have to implement an electronic health record system sooner or later, and the one-time cash surplus made it possible for us to do so sooner. One of us had experience in managed care and population health and was hoping to use those insights at the practice level.
We chose our system on the basis of recommendations of colleagues and because it was offered by a large national company. We hoped that the latter attribute would make it more likely that we could count on long-term support. We did not interview multiple vendors because we believed that all full-featured products would have unanticipated advantages and disadvantages.
To support our electronic health records system, we needed to change the practice management system that was in place for scheduling and billing. To minimize the impact on physician–patient interaction, we opted for an encrypted wireless network with Tablet personal computers (Hewlett Packard, Palo Alto, California), which we purchased from a different vendor. None of the physicians was especially computer-literate. The total quoted cost of our system, including hardware, software, training, and 1 year of support, was approximately $140 000, which is within the range that other investigators have reported on a cost-per-physician basis.
Staff and Physician Training
Training meant different things to different team members. None of the physicians had previously used a Tablet PC with a Windows XP operating system (Microsoft Corp., Redmond, Washington), and we needed training on the device as well as on the new system. Some staff members had never used a mouse (our previous practice management system was not Windows-based). The medical assistants, who had previously made notes by hand, were now asked to use wireless-equipped laptops with mouse pads or track-ball pointers.
For the system itself, 2 types of training were given. Super users were taught how to set up and administer the record (and therefore were enabled to make some structural changes to the system). Regular users were trained in basic system operation but were not given administrative training and privileges to make changes to the system. Super users were charged with customizing the system for our particular practice environment and developing work flows, which were clearly defined and documented steps to guide everyone on how to use the new system to accomplish the work of the office. After 2 rounds of planning meetings and 2 days of on-site training, we went live, meaning that we committed to using our electronic health record to document clinical care from that time forward.
Training requires organizational redundancy or reserve; in a busy physician practice, neither is present. Our business manager incurred an injury that kept her out of work for 1 month before we went live; during that month, much of our focus became covering her core functions (payroll, billing, scheduling, and staff management) rather than training. For the first 3 days of live operation, we reduced our appointment schedule by 50%; thereafter, we attempted to maintain our schedule at two thirds for 2 weeks, but ongoing demand for appointments made this impossible.
Hardware and Performance
We had put in place a complex computer network that none of us knew how to support, maintain, or operate. Shortly after we implemented the practice management system, we experienced a virus attack that crashed our system. After the virus was removed, we experienced several lengthy losses of both telephone and data service. Identifying the cause of each of these system failures was a diagnostic problem well beyond our skills, with several possible corporate culprits. Before we went live, we had had a limited, inexpensive relationship with a small local computer support company; because we were paying annual support fees to both hardware and software vendors, we thought we would not need these local services after implementation. We were wrong. In fact, our relationship with the local company expanded rapidly in time, importance, and cost after implementation. Because we now rely on our system for core clinical functions (prescriptions, telephone calls, and accessing records), small technical malfunctions create major operational problems. Our expanded relationship with the local computer company now costs an unbudgeted $2000 per month, and the response time of our technical support is often inadequate.
Redesign of Office Work Flow
A well-run primary care office is a complex interdependent operation with well-defined work flows. General principles that guide the design of work flows in our office include simplicity and accessibility for patients, safety, comprehensive documentation, and delegation. We operate under the assumption that the physician is the most skilled, and most expensive, person in the office and should only do what no one other than a physician could do. Our entire office meets monthly for 1 hour, and weekly meetings of staff teams are held to adjust work flows as conditions or demands change. Responding to a request for a prescription refill, for example, requires 3 or 4 people performing interrelated but distinct tasks to deliver it safely, reliably, and promptly; we average 30 to 40 such requests daily. The collective integrated operation of our office thus represents 15 years of weekly and monthly staff meetings that constructed our functional systems piece by piece over time.
On 14 July 2004, we had to redesign every office system we had in place. Our commitment that going live would mean that documentation of clinical care on or after that date would be created and found in the electronic health record seemed simple, but clinical care included not only office visits but telephone calls, prescription refills, handling of laboratory results, and other functions. Each of these tasks had a work flow, and all work flows had to be redesigned more or less simultaneously. A clear go-live date was desirable because, as a matter of patient safety, we needed to know where to look for information, and the longer we ran parallel paper and electronic systems, the harder that would be.
The process of radically redesigning 15 years of accumulated work flow in a short interval was extremely stressful. The system we chose is designed for flexible application in a variety of settings, ranging from large integrated delivery systems to smaller practices. Although the vendor urged us to think through and document the new work flows in advance, we found ourselves making innumerable decisions about how we would use the system before we really understood how it worked, and our vendor did not know enough about how our office worked to help us. We were forced rapidly to adjust our work flows during implementation, which seemed akin to redesigning an airplane in flight.
Decreased Competence and Increased Effort
Going live rendered everyone in the office incompetent to do their core jobs. The front desk had to use new on-screen forms to record telephone messages; pairing electronic messages with paper charts required the file clerks to follow a new work flow; physicians had to find telephone messages on their computer desktop rather than neatly piled in a physical telephone message bin. The medical assistants had to record vital signs and chief symptoms in the computer and had to learn how to record results of a tuberculosis skin test, visual acuity test, or urinalysis. Everyone in the office simultaneously experienced pervasive anxiety and unhappiness. Waiting time for patients dramatically increased. In short, people were miserable at work.
We began to have weekly full staff meetings and weekly physician meetings, all of which were more acrimonious than they had ever been. Variations in clinical style and work flow among the physicians—which had seemed acceptable if unnoticed before—now became a subject of group scrutiny. What did we have to change, and what could we hang on to? What did the physicians have to do the same way, and where could we tolerate difference? All these issues had to be renegotiated at a time of enormous stress on the practice. We observed that a culture of blame set in: Things were not going well, and it had to be someone's fault. Several staff members complained that the work environment was less collegial, and they often felt criticized, as one put it, by everyone. They did not associate these feelings with the electronic health record and, at least initially, neither did we.
Coincident with our shared frustration came a dramatic increase in workload, especially for the physicians. Even when we had reached the point where we could competently use the new system, every patient represented a new patient to the electronic health record, and the old paper chart had to be abstracted and data moved into the electronic chart. Some aspects of chart abstraction could perhaps have been delegated (for example, entering medication lists or immunization histories), but we worried that our staff—who have only limited clinical training—might make mistakes, and decisions about what data to abstract require the clinical judgment of a physician. At first, the system shut down daily at midnight for backup and maintenance; backup was later moved to 2:00 a.m. to accommodate 2 of the doctors who were trying to work from home in the evening.
The stress level in our office remained high for about 3 months, by which time we had seen most of our complex patients and entered their long medication and problem lists into the system. We had now begun to realize some of the benefits of computerization, including computer-generated prescriptions, faster access to specialist correspondence, real-time access to charts anywhere in the office, the ability to message or route information and tasks electronically in the office, and the ability for the same chart to appear on multiple desktops. Within 4 to 6 months, waiting time had improved and staff were more excited and confident.
Patient Acceptance
Patients have been impressed and pleased to see their prescriptions appearing on wireless-enabled printers sitting unconnected to our Tablets. They have also enthusiastically benefited from occasional use of the Internet or such tools as the National Cholesterol Education Program Risk Calculator during their visit. Some patients, however, found the increased waiting time during the early phase of implementation unacceptable, and many left our practice because of it. At a time when everyone in the office was stressed, our customer service skills were not at their best. Several patients have asked a version of a question posed by a supportive, long-established patient: Doctor, do you find you are spending more time interacting with the computer than with your patients? For a while, the answer was clearly yes.
Financial Impact
Our total annual budget for technology support before implementation was approximately $10 000, which comprised maintenance and support of our previous practice management system and limited network. Our postimplementation annual budget will be $40 000, which includes annual support payments to hardware and software vendors and our local computer support vendor. We will have $24 000 in annual carrying costs for the financing of our system purchase over the next 5 years. The clearest savings we have seen was from the elimination of $45 000 in annual transcription costs. Although the file clerks no longer do filing, they now scan and name correspondence (see the following description), and we have been able to eliminate only 1 staff position for an additional annual savings of $20 000. We expect savings on chart supplies to be offset by increased costs of toner and printer maintenance, technical support, and replacement of equipment. At best, we see the expense side as a wash.
On the revenue side, we accrue no additional revenue from any current payer for having an electronic health record. We had already maxed out on most quality incentives for which we were eligible when we were using well-organized paper charts and office systems. The electronic health record may enable us to see more patients in the same time or offload physician work more reliably and safely because the system provides clear, timely, legible documentation to support expanded clinical team activities, but this reallocation will require substantial staff retraining. Within 1 year of implementation, we expect to free up our current file room space and perhaps make it clinically productive and revenue-generating.
As an offset to these potential gains, it is possible (although unlikely) that physicians will be less productive because the electronic health record generates more work for them. For example, whereas the physicians used to dictate notes, they must now type them. Physicians must also participate more in filing. Our electronic system offers us 24 document types (for example, consultation or laboratory report), and each document must be assigned a type and given a name. Because accurate labeling and data entry are essential both to take advantage of the information retrieval capability of the system and to find anything once it is filed, the physicians must oversee and modify the categorization and manual input of key data elements. As a result, we often feel like data input drones. No wonder one of us described the new work flow as a physician speed-up.
Computerization in a world without established standards that link medical data systems is inefficient. When we have a working interface, as we do with our main outside clinical laboratory (which handles about 80% of our laboratory testing volume), the reports come named, and the individual laboratory results automatically populate flow sheets and letters to patients. Results can be efficiently retrieved and graphed, and trends can be analyzed. Unfortunately, most of the information we receive (such as radiology reports, consultations, and procedure reports) does not come to us in a format that the system can recognize electronically. Our colleagues in integrated delivery systems and the Veterans Administration do not face this problem because most of their clinical data are generated within their system and the interfaces already exist. National standards on the interoperability of medical data systems would be a big step forward for small practices. For now, we may switch referral patterns to hospitals and specialists who will give us information in a form that flows most easily into our system.
Lessons Learned
It is naive to assume that small practices will move to electronic health records without a variety of supports, one of which is certainly financing. None of the many beneficiaries of our investment—patients, insurance companies, our specialist colleagues, health plans, our liability carrier—have directly shared in the cost of implementing an electronic health record system. Enhanced reimbursement models will be needed for wider adoption. This could be achieved through performance incentives tied to implementation of such systems in capitated contracts or through a common procedural terminology code for data transfer to reflect the one-time increased effort and cost of moving data from paper to electronic format. A recent report estimates incentives of $12 000 to $24 000 per full-time physician per year would be needed to make the business case for immediate adoption of electronic health records, with those incentives transferring to performance-based incentives over time. Any of these incentive models would work for us and make adoption easier in other small practices.
Although some predict that vendors will shift their focus to the small practice market, it is difficult to see how vendors will support implementation of an electronic health record in the small practice setting while keeping prices affordable. Small practices need much more training and support from vendors than do large groups. The support provided by our large national vendor presupposed the existence of dedicated information technology staff and an administrative layer that could plan work flow and train staff. Neither of these infrastructures are present in a small office, and both are critical to success. In addition, small practices need structured assistance to develop their capacity to manage organizational change. Models of shared local training and support must be developed if small offices are to be successful in implementation.
Perhaps the most important asset we could have used to ease the pain of implementation was more clinical capacity. A decline in productivity after implementation of an electronic health record seems inevitable, and if a practice is already straining to meet patient demand, an absence of reserve magnifies the stress of implementation. For us, the financial stress of acquiring the electronic health record precluded simultaneous addition of a new mid-level practitioner or physician, which argues even more strongly for the need for financial support.
Patients want and expect their physician, especially their primary care physician, to have a comprehensive grasp of what is going on with them medically and to be able to respond to such questions as, How much weight have I lost? or What was my cholesterol level last time? Clearly, aggregating comprehensive clinical information at the point of care is a basic function of excellent primary care. Why is it that every academic health center and hospital acquires state-of-the-art cardiac imaging tools promptly, but primary care offices and residency training programs are still using paper records? Given their experience with other customer service operations, such as retail, banking, or travel, patients assume a level of information technology infrastructure that most of us in health care simply do not have. Unsupported by technologies now taken for granted almost everywhere else, we in health care regularly fail to meet basic patient expectations.
A major factor that prompted us to adopt an electronic health record was the hope, now at least partially fulfilled, that it would improve our ability to meet patient expectations and improve our job satisfaction. Despite the difficulties and expense of implementing the electronic health record, none of us would go back to paper. We find ourselves able to be better physicians: We communicate more quickly and clearly with patients on the telephone and by letter, transmit important clinical information (albeit on paper produced automatically by our system) more efficiently to specialists, and spend less time paging through charts to find out what the previous cholesterol values (for example) had been. Practicing with a computer in hand allows us to access current health information for ourselves and our patients without having to leave the room or interrupt the flow of a patient encounter. We have already caught a glimpse of population health possibilities when, on the same day as the withdrawal of valdecoxib from the market, we were able to identify and send letters about the withdrawal to the 16 patients in our practice who were taking the drug. We expect soon to produce a list of patients with diabetes so that we can audit their care and see how well we meet our care standards. We also plan to use our electronic health record to provide each of these patients with an individualized report on services for which they appear to be overdue.
If the United States is to realize the benefits of information technology in health care, substantial investments will be needed to shepherd small offices through what is an arduous process. We believe that many practices will examine the current environment and defer a decision to adopt an electronic health record, and given our experience, it would be hard to disagree with them. All the hoped-for benefits to the overall delivery system and to patients will only accrue if small offices, which are the access points to health care for most patients in the United States, successfully adopt information technology. We believe that new models are urgently needed to deliver both financial and administrative support to those who would accept the challenge.
Author and Article Information
From Greenhouse Internists, P.C., Philadelphia, Pennsylvania.
Acknowledgments: The authors thank their office staff for their courage, flexibility, and support throughout this project. Without their willingness to try something new, implementation of the electronic health record would not have been successful. They also thank business manager Debbie Preite for her leadership and willingness to learn more about computers than she ever thought she could, or wanted. Finally, they thank Cheryl Norvell for manuscript assistance and Steve Downs, Holly Humphrey, and David Reuben for their encouragement and review of an earlier draft of the manuscript.
Potential Financial Conflicts of Interest: None disclosed.
Requests for Single Reprints: Richard J. Baron, MD, Greenhouse Internists, P.C., 345 East Mt. Airy Avenue, Philadelphia, PA 19119; e-mail, rbaron@greenhouseinternists.com
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