The 3M HIS story: Finding a better way

3M Health Information Systems (HIS) has a rich history and a unique understanding of health data and its uses. We’ve spent the last 35 years inventing coding, grouping and natural language processing technology to improve the revenue cycle, create time to care for providers and drive value-based care. Our business has evolved from coding and abstracting to grouping and reimbursement to documentation and productivity to performance management. Our success is only because of our customer partners and the shared collaboration and insights. Who we are today is a reflection of where we’ve come from.

Here is our story.

A woman working at a computer

How it started

Our 3M mission is clear: Science applied to life. In 3M HIS, we use technology to advance health care to improve every life.

How do we easily and accurately categorize medical data?

In the early days of health care, medical coders manually read charts to look for diagnoses and procedures. Then they had to manually match those concepts to numerical codes found in alphabetical and numerical indexes of dense coding books.

But years ago, an IT guy working in the department of former LDS Hospital in Salt Lake City believed there was a better, more efficient and accurate way. John Morgan knew computers could be built to think like doctors. Not the other way around. He believed in the concept so strongly that he built a mainframe in the back of his RV and toured the country; pitting his CodeFinder System against the best medical coders he could find. Seeing the value in digitizing medical records, health care organizations began redirecting budgets earmarked for microfilm to Morgan’s new medical coding software.

A doctor using a stethoscope during an exam with a young boy

How much should it cost to treat a patient?

In 1983, 3M caught wind of Morgan’s technology. With 3M’s resources and commitment to innovation, health care now had an accurate and efficient way to categorize a patient by diagnosis. But, how could we find out what the cost to treat that patient was? At the time, hospitals were reimbursed on a cost basis model, sending charges directly to the Centers for Medicare & Medicaid (CMS) for reimbursement. CMS was looking for a solution to better manage the cost variability since different hospitals were charging vastly different amounts to treat similar patients with similar diagnoses.

Simply put: The total cost of care is a function of unit cost times volume. But, how could we determine a unit cost in health care? Let’s take a patient with COPD for example. In this case, we have a diagnosis and a diagnostic code. Let’s call the treatment of a diagnosis the “product.” Grouping patients together by related diagnoses allows us to identify like patients. Then we can begin to evaluate the average resource utilization to treat the diagnosis, essentially creating a base unit cost for health care. It was such a powerful concept that in 1983, Medicare adopted it as the basis of the inpatient prospective payment system for federal reimbursement in all 50 states.

A doctor explaining something to a patient

How do we accurately document everything that occurred clinically?

In the subsequent years, 3M progressed from coding and classification to grouping and benchmarking methodologies. In the 90s, we added software and services to improve the clinical documentation process. With an eye toward productivity challenges our customers were facing in the transition to ICD-10, we combined our technical and clinical expertise and launched our 3M™ 360 Encompass™ System. This first of its kind platform seamlessly integrated computer-assisted coding, clinical documentation integrity, concurrent quality metrics and analytics and proprietary natural language processing tools into a single application to capture, analyze and advance patient information across the continuum of care.

A business team working looking at information on a laptop

How do we meet accuracy and productivity demands?

3M is the most widely used medical coding software in the world with more than 300 active industry and technology partners. More than 40 states and more than 25 countries use our software as the basis for payment. And more than 1,700 hospitals rely on 3M 360 Encompass to processes more than 60 million unique health care records each month. For almost 40 years, we’ve worked with government agencies, including CMS, to develop and update both public domain and proprietary grouping and benchmarking algorithms and classifications systems. Our risk adjustment algorithms calculate accurate benchmarks for more than 2 percent of the U.S. GDP.

As the health care world moves from volume to value, 3M HIS is uniquely positioned to play a significant role in reducing physician burnout. That’s why we focus our efforts on creating technology that removes administrative burdens and puts the clinician back in the clinical setting more often. Our combined expertise with M*Modal, acquired in 2019, brings together the power of advanced artificial intelligence (AI) and natural language understanding (NLU) to create technology that delivers real time clinical insights to clinicians, clinical documentation integrity (CDI) specialists and coding teams. Our deep knowledge of health plans launched the creation of our payer services solutions that aggregates data, compares populations risk and calculates the total cost of care so payers have the complete picture – helping to derive valuable data insights, drive sustainable process improvements and improve health outcomes.

A tray of surgical instruments

How do we improve patient safety and outcomes?

We help physicians capture the complete and accurate patient story, which in turn helps to drive better quality outcomes data and improved revenue integrity. This means fewer CDI queries, less workflow disruptions, reduced administrative burdens on physician and most importantly: more time for patient care. In short, 3M is changing clinical workflows from a reactive model to a proactive model that fixes issues before they become a real problem.

A doctor using a stethoscope during a patient's exam

How can we continue to do more with less?

For the better part of the last four decades, we’ve been innovating technologies that improve the efficiency of health care and for the next few decades, we’re working to improve the experience of health care—for everyone, whether they be patients, doctors, nurses, CDI specialists, health plans or coders.

Historically, our new solutions and approaches are in response to not only market trends, but to our clients’ unique needs. Our deep history and knowledge, and most importantly, our passion, will continue to drive our quest to make the experience of health care better for everyone.


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