Hospital Margins in Jeopardy as 5010, ICD-10 Deadlines Loom

Karen Minich-Pourshadi, for HealthLeaders Media , November 11, 2011
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Estimating the cost

But getting as far as the testing stage requires capital to purchase or add on to existing software for 5010 and ICD-10, and the latter requires throngs of employees to be trained. The actual dollars needed to complete both of these transactions is another factor slowing the process, especially in the practice setting, says Landes.

The price to upgrade or add the software needed to be prepared for 5010 can range from zero dollars to $15,000 per physician and possibly an equal or greater amount for multiple days of training for multiple employees, he says. The vast disparity in the cost for 5010 depends greatly on where the practice is with respect to technology.

Physicians, hospitals, or health systems that have outdated software/hardware may need an entirely new system. In addition, vendors may only offer upgrades, or “plug-ins” for a few products they offer—if the provider’s software isn’t among the upgraded, then new technology may need to be purchased.

When it comes to ICD-10 transitions, 20% of respondents project the conversion cost to be less than $500,000, and another 21% peg the cost at between $500,000 and $5 million, according to the ICD-10 Puts Revenue at Risk report,and some industry experts believe that providers’ actual costs could well exceed their estimates.

John P. Glatthorn, practice director for Optera Healthcare Strategies and ICD-10 and 5010 program manager for the 516-licensed-bed Children’s Hospital of Philadelphia says part of the reason many leaders expect the process will cost so little is they don’t have a methodology to calculate this type of project accurately. Many of them still look at these transitions as the responsibility of one department.

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