Get the E-newsletter
Thinking holistically and working across departments to determine areas of vulnerability, healthcare organizations have taken an integrated approach to risk. With the transition to value-based care calling for providers and health plans to demonstrate increased efficiency and
control costs, enterprise risk management (ERM) offers the
opportunity to consolidate resources and avoid repetition.
When composing a risk management strategy, “You can’t do it in a siloed fashion anymore,” says Claudia Douglass, managing director for Advisory Life Sciences and Health Care with Deloitte. “It has to be an enterprise view informed by the strategy, with operations making it
According to the American Society for Healthcare Risk Management (ASHRM),
key components of an ERM strategy include identification and management of uncertainty, assessment, employing data to prioritize risk, creating a culture of accountability and readiness, and incorporating risk appetite in the organization’s overall strategy.
ERM demands ongoing cultivation, with domains involving operations, finance, strategy and reputation, human resources, legal and regulatory, IT, and hazards—as well as a clinical domain for healthcare organizations.
When compiling risk plans, organizations utilize dashboards to assess, identify, and monitor risk, and they develop response plans. Providers and health plans should engage leadership and content experts to offer regular feedback on risk appetite and strategy.
should be involved. Organizations with sufficient resources can build teams that are dedicated to ERM. For instance, multiple industries have seen
an increase in the position of chief risk officer since the early 1990s, according to Deloitte. Those with more limited resources may build ERM responsibilities into current staff positions.
“The biggest thing is having an engaged board and leadership team and making sure you engage staff people who are dealing with customers, including patients and consumers, on a regular basis and who know where your day-to-day risks are,” Douglass says.
Serving 230,000 members throughout 58 Wisconsin counties as a not-for-profit HMO, Security Health Plan began developing its ERM strategy in 2014 while fulfilling compliance requirements. It has not hired full-time staff to manage this strategy but has established an
ERM committee. The committee organizes quarterly meetings to gather feedback from staff who represent various departments and are in positions to identify key risks. The committee regularly communicates information back to leadership.
“We try to make sure there are enough members of leadership that are involved up front so that nothing is coming as a surprise to them. In case one of these risk events happens, everyone has been sufficiently briefed on it,” says Krista Hoglund (pictured at right), director of actuarial and
risk adjustment services at Security Health Plan. The organization also expects every employee to assume some level of ERM responsibility; for instance, employees should notify the appropriate contact when observing a possible risk event such as a safety hazard or potentially fraudulent claim.
Based in Danville, Ind., Hendricks Regional Health has been building its ERM strategy over the past five years. Composed of two hospitals that are licensed for 166 beds, the county-owned organization engages leadership to champion a continuous, coordinated approach.
“If I don’t have support from leadership, implementation of an ERM program would be close to impossible because there’s not going to be the authority or support behind it,” says David Petrous (pictured at right), risk manager/safety officer at Hendricks Regional Health.
Though the organization does not have a full ERM program, Hendricks Regional Health’s leadership, risk manager, and staff across departments utilize ERM methodology for decision making based on organizational goals and other drivers to ensure a high quality of care and
protect the health system.
Selecting staff to own and respond to risk helps organizations address events more effectively. “With a rapid-response team concept, you go through scenario planning so that if you have a situation come up, you have options, and you’re not making up a response on the fly,”
Similar to the way rapid-response teams address a clinical emergency in a hospital, ERM rapid-response teams strengthen organizations’ ability to identify, monitor, and respond to risk. Some team members’ positions are dedicated to risk full-time; other staff, in positions
ranging from clinical to financial to marketing, are taking on these roles in addition to other responsibilities. The success of these teams depends on having expertise in various risk domains, ongoing communication, and a dynamic ERM strategy.
plan procedures and elements. “You need to clearly define what scenarios you’re concerned about,” Hoglund says. Using a heat map and regular communications, such as through quarterly committee meetings, Security Health Plan monitors 21 key risks that fall under 10 risk categories.
At least one executive is assigned to a risk category, and each key risk includes an explanation, risk assessment, monitoring process, and mitigation strategy that consists of a trigger, response, and follow-up after the event. For example, the organization has designated
a financial-risk category that covers risks related to pricing and liquidity, with the controller and chief actuary as responsible parties. The ERM committee regularly discusses possible scenarios ranging from cybersecurity to financial to legislative changes, and how the organization would respond.
Central components of Hendricks Regional Health’s ERM strategy include an identified owner of a particular risk scenario, projected scenarios and data on likelihood, key performance indicators to be monitored, plans of action to respond to each scenario, and
follow-up after risk events. Using tools such as heat maps (click on the exhibit below) or other matrices to identify risk, Hendricks also draws from quality improvement data, financial reports, and risk events themselves to evaluate risk categories
Heat Map for Assessing Risk at Hendricks Regional Health
“We go through this exercise of coming up with a risk score to let us know what’s likely going to happen, and that’s what we focus our education and training on,” Petrous says. “We then practice having risk events such as code blues and disaster exercises to know how to respond.”
Regularly examining risk scenarios and fine-tuning risk plans as needed empower organizations to understand vulnerability and take a proactive stance when facing risk.
Security Health Plan has applied its risk strategy to scenarios such as risk adjustment for Affordable Care Act (ACA) filings. Historically, the filing deadlines for ACA health plans to the Wisconsin Office of the Commissioner of Insurance and the Centers for Medicare
& Medicaid Services have fallen on dates prior to the release of final risk adjustment information for the completed calendar year. For instance, the 2018 premium was set in mid-2017 before the organization confirmed its final financial performance for 2016.
In the past, because of the condensed timeline between the release of final risk adjustment information and the deadline to make changes to the submitted ACA filing, the organization would make decisions without being able to perform in-depth analysis on the risk adjustment results.
If it set a premium too low going into a year, Security Health Plan was unable to increase the premium until the following year, presenting potential financial risk.
To better respond to filing requirements, Security Health Plan developed a timeline with key dates on when information is released and when different components of the filing are due (click on the exhibit below). “Because we planned ahead of time, giving our consultants a heads-up, we were able to
turn everything around much quicker than by waiting for the day the information was released,” Hoglund notes.
Rate-Filing Timeline for Security Health Plan
For its ACA filing, Security Health Plan has determined risk adjustment thresholds and the corresponding pricing responses. For instance, if risk adjustment is a certain percent less than assumed in pricing, it would produce a particular response, such as an adjusted premium.
The organization then schedules meetings to correspond with the release of the risk adjustment information and designates key decision makers, including the chief marketing officer and chief actuary, allowing for a shorter turnaround time.
“If you plan ahead about how you’re going to react, or you know who the team is that needs to respond, it empowers people to be able to quickly make decisions and move on to the next item,” Hoglund says.
In February, as part of an Endoscopy/Wound Therapy service line expansion project, Hendricks Regional Health oversaw a medical gas shutdown that impacted the ICU, Pediatrics, Childbirth Center, Radiology, Endoscopy, PT/OT, and Cardiopulmonary. The response required
participation from a range of team members including administration, nursing leadership, affected departments, contractors who performed the work, and infection control.
“We discussed the timeline of what’s going to happen,” Petrous says. “We wanted to make sure everyone knew when we would flip the switch and about the backup system being used during this time frame.”
In addition to a safe handling of the shutdown, the response team—including the house supervisor, the director of respiratory therapy, nursing directors, an infection preventionist, contractors, engineering staff, the chief nursing officer, and the executive director of professional services—focused
on developing alternative plans in the event that the project encountered problems or could not be completed. The risk plan accounted for ways to deliver care during the shutdown, including via portable suction machines, and to reroute patient care processes.
Although the project was completed as anticipated and Hendricks Regional Health had response plans in place for events that arose, there remains an understanding that the unexpected may occur. “When you’re developing a plan, you have to have flexibility, agility, and resilience,”
Petrous says. “Those common themes play across any type of policy, procedure, or protocol because you can’t imagine things that haven’t happened yet.”
Practice is crucial for Hendricks Regional Health, which regularly implements exercises to ensure staff are prepared for actual risk events. For instance, the organization sends out test emails to mimic messages with viruses and examines staff responses. Noting the number of
staff who click on suspicious links, Hendricks continues to test and has seen the numbers decrease.
Implementing an ERM strategy helps healthcare organizations not only to prepare for events that could be harmful but also to improve the consumer experience through more effective communication and coordination of services.
“Any time we can reduce the means and resources that are needed to provide a higher level of care, the patients ultimately benefit in the areas of cost and quality,” Petrous says.
Working across departments to proactively mitigate risk reflects industry efforts to increase the value of care. “With value-based care, the key is you’re working as a coordinated system,” Douglass says, noting a recent increase in provider and health plan requests to learn
about creating leadership roles for ERM strategy.
While healthcare organizations have demonstrated efforts to build ERM plans, ASHRM notes
opportunities for growth. As providers and health plans continue to develop strategies, they will be able to incorporate those into organization-wide initiatives to enhance the value of care and reduce variation.
“If you have a rapid-response team that has a plan and knows the steps to be taken in a certain scenario, you are more efficient and less likely to have a mistake that’s costly to the organization,” Hoglund says. “It should result in fewer wasted resources, which provides
better care at a lower cost.”
Elizabeth Barker is a digital communications professional and freelance writer in Chicago.
for this article:
Claudia Douglass, managing director, Advisory Life Sciences and Health Care, Deloitte;
Krista Hoglund, director of actuarial & risk adjustment services, Security Health Plan, Marshfield, Wis.;
David Petrous, risk manager/safety officer, Hendricks Regional Health, Danville, Ind.
VitalWare: Creating a Transparency Strategy: Meeting the Mandate to Post Standard Hospital Pricing
A senior leader of VitalWare talks about the need to create a comprehensive pricing strategy for consumers and how to get started.
HealthTrust: Solving Workforce Management Challenges
Two of HealthTrust’s senior leaders talk about strategies for optimizing the hospital workforce to improve productivity and reduce waste.
Grant Thornton: Optimizing the Ambulatory Workforce
One of Grant Thornton’s senior healthcare consultants addresses the topic of workforce management and the importance of a data-driven approach.
Cedar: Reimagining the Patient Financial Experience
Cedar’s CEO and co-founder tackles the topic of patient payment and the importance of having an innovative patient financial management system.
6 Patient Revenue Cycle Metrics You Should Be Tracking (and How to Improve Your Results)
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.
10 Ways to Reduce Patient Statement Volume (and Reduce Costs)
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.
Reduce Patient Balances Sent to Collection Agencies: Approaching New Problems with New Approaches
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.
The Future of Online Patient Billing Portals
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.
Payment Portals Can Improve Self-Pay Collections and Support Meaningful Use
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.
Large Health System Drives 10% UP (Patient Payments) and 10% DOWN (Billing-related Costs)
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.
ICD-10: Managing Performance
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Clarity Drives Collections
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.
Orlando Health Gains Insight into Denials, Reduces A/R Days with RelayAnalytics Acuity
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.
Revenue Cycle Payment Clarity
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.
Streamlining the Patient Billing Process
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.
Wallace Thomson Hospital Automates to Maximize Limited Resources
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.
7 Steps for Building and Funding Sustainability Projects
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.
Key Capital Considerations for Mergers and Acquisitions
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.
Key Capital Considerations for Mergers and Acquisitions
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.
Trend Watch: Providers adapt as value-based care moves from hype to reality
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center case study
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Reforming with a New 50-Bed Acute Care Facility
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
5-Minute Briefing on Revenue Integrity Through HIM WhitePaper Hospitals FS
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
5-Minute Briefing on Accelerating Cash Flow Through HIM WhitePaper Hospitals FS
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
5-Minute Briefing on Reducing the Cost of RCM WhitePaper Hospitals FS
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
Providers Focus Too Much On Revenue Cycle Management
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
Lucille Packard Children’s Hospital Stanford Case Study
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
Using Predictive Modeling To Detect Meaningful Correlations Across Claims Denials Data
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
ZOLL and Emergency Mobile Health Care Case Study
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Maximizing Medicare Reimbursements White Paper
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Denials Deconstructed: Getting Your Claims Paid
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Automation and Operational Improvement Drive Sustainable Results
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Revenue Cycle Management Resolves Migration Implementation Issues
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
Partnering For Success – Provider Achieves Strength in Stability
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
Building a Clinically-Integrated Network
As value-based payment models evolve, providers are challenged to maintain superior clinical outcomes while controlling costs.
Winning in the Post-Acute Marketplace
Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.
Building A Common Vision with Employed Physicians
HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.
Practice Performance Improvement
The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.
Clinical Integration Without Spending a Fortune
Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.
Adding Value to Physician Compensation
Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?
Effective Revenue Cycle Management in Your Network
Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.
Succeeding in Value-Based Care
This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.
Therapy: Benefits at All Levels of Care
Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.
Does Your Budgeting Process Lack Accountability?
With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.
Cost Accounting: the Key to Cost Management and Profitability
Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.