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Improve your revenue cycle performance through standard metrics, peer comparison, and successful practices.
As we all know, there are sea changes occurring in health care. In the face of reduced payments, capitation, accountable care organizations, rising operating costs, and the need for investment in electronic health records (EHRs), providers have little room for error. For a physician practice to be financially successful in this difficult environment, its owners and managers require information systems that can provide them with key information to "drive" the practice and make timely changes to ensure its continued success.
To manage and provide direction, you must measure. A "dashboard" offers focused information critical to the success of a business through a series of "flash reports" that are created and analyzed routinely. Flash reports are customized to fit the exact needs of a practice. Flash reports go well beyond traditional financial statements, digging deeper into practice metrics to provide a quantifiable foundation for making business decisions. Substandard owners' salaries, loss of top performers, and chronic cash flow issues are just a few of the likely consequences of a failure to measure and manage key practice metrics.
The first step in creating effective flash reports is to identify the key statistics and practice metrics that make the practice successful. This exercise is, in itself, useful for helping practice leaders understand what is driving the practice's bottom line. It is not one single factor but many factors, and all must be measured and managed. Using the practice’s balance sheet and income statement as a starting point, consider what drives significant balances for various accounts and the effect of these drivers on the profitability of the practice. Possible accounts include patient fees, salaries, accounts receivable, and medical supplies.
Take patient fees for instance. There are many factors affecting "sales" in a healthcare practice, including patient volume, payment rates, effective billing, and collections. Many of these factors can be influenced in a number of ways. Patient volume is affected by a strong referral network, a good call-back program, participation in the appropriate insurance panels, and effective marketing, among other things. To methodically identify the factors and metrics to be tracked, it’s best to develop a basic outline, or chart, of possible metrics associated with key accounts. Consider, for example, the following basic outline for patient fees and staff costs:
Keep in mind, of course, that certain items, such as effective collections, affect not only patient receipts, but also cash and patient receivables. There also may be metrics to be tracked that apply only to certain specialty practices. For instance, cosmetic surgeons should track how many cosmetic consults result in a cosmetic procedure or surgery.
Further, some key indicators may not neatly fit into a simple outline but are, nevertheless, important barometers of a practice's efficiency and productivity. Examples include work relative value units (RVUs) by physician, collections per work RVUs, and staff-to-FTE physician ratios.
In addition to comparative data (e.g., prior year, prior month), consider also using benchmarking data in the flash reports, when available.
At a minimum, you should review dashboard and flash reports monthly to chart changes and track trends—and possibly more frequently if the practice is facing financial issues. Once the reports are established and the systems are in place to generate the data, it does not necessarily matter whether the practice is generating $10 million or $20 million in patient fees—you will still want to use the same profitability drivers. A higher revenue level will affect how you manage the practice, but you will want to use the same drivers that led to growth in the first place.
In sum, consider the following five key points regarding dashboards:
Flash reports and dashboards are excellent analytical tools for helping to maximize a practice's profits. Just like the dashboard on your car, they provide critical, concise information.
John P. Bryan, CPA, is a partner at the accounting and consulting firm Citrin Cooperman. He is based in White Plains, N.Y.
Publication Date: Wednesday, September 25, 2013
A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow.
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
Emad Rizk, MD, president and CEO of Accretive Health, discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management.
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Jim Bohnsack, vice president, solution & corporate development for Conifer Health Solutions, explains how the company helps healthcare providers leverage data to deliver better outcomes while optimizing reimbursement for all payment arrangements.
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
Steve Scibetta, senior director of channel sales for Ontario Systems' healthcare product line, shares insights into effectively managing receivables.
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Elena White, vice president of risk, quality, and network solutions for Optum, discusses how healthcare providers can leverage data and technology as they enable risk in their organization.
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Somnia President and CEO Marc Koch, MD, MBA, explains how hospitals can drive transformative change in the perioperative experience for outstanding clinical and financial outcomes.
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
PMMC President Roger L. Shaul discusses the effects of healthcare reform on revenue cycle management and how PMMC's products help clients adapt to a changing financial environment.
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Greg Burgess, Founder and Chief Product Officer at Burgess Group shares insights and opportunities for payment integrity in the rapidly changing healthcare IT landscape.
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Copyright 2016, Healthcare Financial Management Association.
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