Essay on Information Technology For (MCO)

Published: 2022/01/11
Number of words: 1558


The advancement of information technology perhaps has a function in the management of organizations. Of these organizations, managed care has a formidable implication on the society. Information technology has been instrumental in ensuring faster flow of information. It has been of great assistance in maintenance of electronic records. In the past decades, the growth of information on the field of managed care has formidable implications. Such organizations have been able to cut costs with information systems (Schaffer, 1993). Information systems have been instrumental in coordination of care, communication with patients and in the provision of healthcare data. Information Technology therefore, is important for MCOs in various ways. It is important in the management of operational activities as well as supporting its business goals.

Therefore, it is essential that the IT department align with other operational departments. In the process of this alignment, organizations are able to cut on risks as well as costs. Then in order to meet these objectives, the IT department needs to have the capacity. This capacity requires the IT department to be efficient. Its efficiency requires the department to have competent workforce, tools as well as a perfect scope of operation (Schaffer, 1993). For this organization, the efficiency of the IT department needs to be a goal. This paper outlays various elements of an effective IT department, the composition of the system and its costs implications.

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Elements of Information System

In a managed care organization, information technology is a key feature. Information technology is a key determinant for such organizations in terms of profitability. It is also important to note that information technology in the recent past has been a key determinant in business competition. For an organization, effective information technology system is essential in tacking patients. Information systems elements are essential in ensuring decision making for managers In order to create an important information system for managed care organization; certain elements are important.

Key Elements

In a managed care organization, the key elements include the hardware part of the system. It also consists of the software, data, procedure and people. In a managed care organization, the IT system needs to converge towards standardization. For example, standardization in records management provides for the formation for strong practice structures (Schaffer, 1993). The medical management system includes definition of elements. This structure on the other hand, includes coding of patients’ information. Such structures also include common message protocol at the organization. Therefore, the recorded information needs to be kept under security and confidentiality. It is also important for the IT System to consist of automation (Meijer, 2001). Automation of records in managed care organization has seen an improvement of service delivery. Therefore, the IT system design needs automation in order to improve the profitability of the organization.

On the other hand, the IT system needs to generate reports on organizational performance. Such reports are important in the management of resources. The importance of the generation of reports assists in developing daily hospital data. The system will be able to provide information on the age of patients. It will also provide information of the name of patients, physician, plan and other biographic data (Hollingsworth et al 2012). For the organization’s system to perform effectively, certain elements on service coordination and case management are important. This step is important since it assists in approval of surgery procedures. Another facility of importance on the element of the Information system includes Pharmacy Utilization. In an organization, pharmacy utilization IT system provides data on drug utilization by each provider.

In such a system, data includes physician capitation, identification numbers, hospital, specialty and pharmacy. On the other hand, the information system provides details on diagnosis and hospital variance. Another important element in the managed care information system includes claims of Vendor (Hollingsworth et al 2012). This data is important in the provision of data on patterns of billing. In such a front, data of importance includes the identity of vendors, date of service, identification information, money paid, description and plan.

Information Technology

The information technology of the (MCO) needs to enhance the safety, accountability and quality of service delivery. The technology of employment in such a strategy needs to include aspects of organizational goals. Another aspect of consideration for the technology needs to achieve meeting Physician and other practitioner’s practices (Hollingsworth et al 2012). The organization may use IT in an Integrated Care program. On this program, the organization emphasizes on preventive care, evidence- based management.

Other elements of the Information technology will include the inclusion of management of chronic health as well as programs on people with disabilities and adults. The information system will include use of pagers, computer networks, internet, phone calls and other alarms. In cases of emergency, such technology needs to be in use. The information technology system for the managed care organization also considers care physicians, hospitals, homes as well as specialists (Hollingsworth et al 2012). This technology needs to have a hierarchy. Information flows from linkages of head of departments. The head of department in the organization is essential in the transmission of information. Feedback of information comes to the head of department who coordinates with other heads.

Electronic Health Record

The Electronic health record is an essential tool in providing information on individual patient data. Data is electronically saved, and its transmission is apparent to diverse health centers. The organization might concentrate on transmitting information on a network connection. According to Meijer (2001), the organization’s (EMR) system considers aspects of medical history, allergies, and radiology images, billing information, laboratory results, demographics, signs and details on Immunization. In the U.S.A the application Electronic Health records cut across all managed healthcare organizations.

To save on costs an application of EHR for over a 6 years yield $63,750. On the other hand, Medicare earns $44,000 for an enterprise that concentrates for over 5 years. The advantages of using Electronic Health Records include an improvement of care coordination in an organization. The other function of the record includes the reduction of healthcare disparity, insurance of security and privacy, improve population as well as engage families (Meijer, 2001). EHR ensures computerization of orders, implement checks as well as provision of summaries of patients.


In the application of EHRS, startup cost was estimated at $50,000 to 70,000 in the year 2002. This cost is for 3-physician practice. The cost of startup for 5-physician practice in the year was $32,000. This therefore implies, that an MCO provider might save over $86000.As an estimate for the MCO that at the end of the year it will have a net saving of over $1.4 million. However, in relation to the maintenance costs, the MCO will endure $8500 per year (Saunier, 2011). On the hand, it is essential to note that its software needs updating. This means that the organization faces a charge of $5400 per year.

The system requires a constant upgrade, which also includes various tests that meet FDA regulations. Apart from all the above costs, the organization faces the cost of training. The cost of training takes a seasonal schedule. However, at some instances training costs come when needs arises. The MCO projects estimated costs of $ 7000 for ongoing training on using the system. Other costs include costs of software acquisition, lost productivity, lack of efficiency as well as usability (Saunier, 2011).

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The electronic Records management system for an MCO includes the Email systems. This system is important in transmitting information to practitioners, patients and other organization players (Saunier, 2011). Other systems in use include the Web Technology system, software for the creation of personal office documents. Another important category is the creation of smart systems. Web technology system implies to creation and distribution of data along websites (Hollingsworth et al 2012). Through web technology, Managed Care organizations meet the needs of clients. Smart systems on the other hand, employ the use of software expert systems. These systems assists solve problems with limit domain of humans.

Insourcing Vs Outsourcing

In the designing and implementing of an information system for the Managed Care organization, certain IT needs are essential. However, the organization may outsource for such professionals. Outsourcing is expensive as compared to in sourcing. On the other hand, the advantage of outsourcing is the improvement of the quality of service. The organization has few specialized IT professionals. It is therefore, a recommendation that the organization hires few specialized. To save costs, the organization considers outsourcing of a part-time basis. Outsourced specialists will provide services on a weekly basis.


Meijer, A. (2001). Electronic Records Management and Public Accountability: Beyond an Instrumental Approach. Information Society17(4), 259-270

Hollingsworth, J. M., Saint, S., Sakshaug, J. W., Hayward, R. A., Zhang, L., & Miller, D. C. (2012). Physician Practices and Readiness for Medical Home Reforms: Policy, Pitfalls, and Possibilities. Health Services Research47(1pt2), n/a.

Schaffer, W. a. (1993). Managed Care: Why Is It “Better”. Benefits Quarterly9(3), 66-69. Accessed August 12, 2014.

Saunier, B. (2011). The Devil is in the Details: Managed Care And the Unforeseen Costs Of Utilization Review as a Cost Containment Mechanism. Issues In Law & Medicine27(1), 21-48

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