Financial Alignment and ROI

The 2021 Healthcare Financial Forecast: What to Expect, How to Prepare

As healthcare financial leaders plan for 2021, they can expect COVID-19 to shape their strategies. Pandemic response and recovery will continue to dominate the industry, inform new perspectives on existing issues (e.g., the shift to value-based care and health equity), and shape priorities. Meanwhile, the Biden administration will start to puts its stamp on U.S. healthcare, further making 2021 a pivotal year for the industry.
Healthcare finance teams can best navigate 2021 by monitoring and preparing to take action in five prominent areas:

Election impact.
Price transparency.
Financial forecasting.
Value-based care.
Health equity.

The 100-Percent Solution to Improving Healthcare’s Operating Margins

Healthcare organizations face unparalleled pressure to increase operating margins as they adapt to the revenue compression from COVID-19 and growing competition from insurers and digital disrupters. Yet, many health systems rely on outdated, revenue-centric cost accounting solutions that are ill equipped for strategic financial decision making. As a methodology for today’s complex healthcare environment, activity-based costing (ABC) can capture healthcare resource use at a granular level. With this service-level insight into clinical cost, ABC provides actionable intelligence to help organizations improve profitability and make strategic cost-reduction decisions. These comprehensive costing solutions give health systems a full understanding of cost across the care continuum—the only level of insight that will enable strategic cost transformation in the industry’s new normal.

Healthcare Financial Transformation: Five Leading Strategies

Healthcare financial transformation—improving care delivery while lowering costs—has been an ongoing challenge for health systems in the era of value-based care and an even more prominent concern amid COVID-19. While better care and reduced expense to organizations and consumers might seem like opposing goals, by understanding the true cost of services and other drivers of expense, organizations can successfully manage costs while maintaining, and even improving, care delivery. To that end, health systems can use data- and analytics-driven tools and strategies to addresses financial challenges, including uncompensated care, prolonged accounts receivable days, discharged not final billed cases, inefficient resource use, and more.

Reduce Bad Debt: Four Tactics to Limit Exposure During COVID-19

Health systems have always faced bad debt—from charity care to insurance claim denials—and COVID-19 has exacerbated its impact on revenue. While hospitals and clinics are responsible for providing care to populations, they can still generate revenue from care delivery without compromising care accessibility or quality. An effective bad debt management approach provides the patient with every financial resource possible and allows the health systems to focus less on payment and more on delivering the best care.
With four tactics, health system leadership can identify bad debt and implement effective processes to minimize it without undue burden on patients:

Identify bad debt exposure early.
Educate patients about alternative payment options.
Leverage technology within the workflow.
Understand the true cost of care.

Healthcare Price Transparency: Three Opportunities for Transformation

Price transparency has been an ongoing challenge for health systems, and upcoming legislation requiring increased visibility around hospital pricing adds pressure. Meeting the new price transparency requirements means legal compliance, but providing procedure costs, different payment options, and the reasoning behind prices set patients up for an optimal experience, increasing their likelihood to return for future care.
With the right tools, such as robust pricing transparency technology and a defensible price strategy, health systems can use the new mandate to take advantage of three key opportunities:

Satisfy increasing patient interest in cost of care.
Earn patient trust—a short- and long-term imperative.
Create the optimal patient experience.

Six Strategies to Navigate COVID-19 Financial Recovery for Health Systems

Research projects that 2020 healthcare industry losses due to COVID-19 will total $323 billion. As patient volumes fall and pandemic-related expenses rise, health systems need a strategy for both immediate and long-term financial recovery. An effective approach will rely on a deep, nuanced understanding of how the pandemic has altered and reshaped care delivery models. One of the COVID-19 era’s most impactful changes has been the shift from in-person office visits to virtual care (e.g., telehealth). Though patients and providers initially turned to remote delivery to free up facilities for COVID-19 care and reduce disease transmission, the benefits of virtual care (e.g., circumventing the time and resource drain of patients traveling to appointments) position telehealth as lasting model in the new healthcare landscape. As a result, healthcare financial leaders must fully understand the revenue and reimbursement implications of virtual care.

How to Optimize the Healthcare Revenue Cycle with Improved Patient Access

Despite pandemic-driven limitations, health systems can still find ways to optimize revenue cycle and generate income. When health systems improve and prioritize patient access through a patient-centered access center, they can improve the revenue cycle performance through decreased referral leakage, better patient trust, and optimum communication across hospital departments.
Rather than relying on traditional revenue cycle improvement tactics, health systems should consider three ways a patient-centered access center can positively impact revenue cycle performance:

Advance access.
Optimize resources.
Engage stakeholders.

Healthcare Revenue Cycle: Five Keys to Financial Sustainability

With COVID-19 challenges continuing in the near-future, health systems must continue delivering quality care in the midst of the pandemic, without compromising financial well-being. Historical approaches to revenue cycle add value but fail to leverage data to drive financial sustainability in a time of crisis. To financially survive tumultuous economic times, health systems must leverage data to drive a more comprehensive revenue cycle strategy.
Five best practices generate the actionable data that allows health system leaders to understand financials at a nuanced level, promoting effective processes that lead to financial sustainability and optimum revenue cycle management:

Identify and measure the right metrics.
Define clear lines of accountability.
Create consistent workflows.
Define key performance indicators.
Understand the right metrics at the right place at the right time.

An Effective Financial Response to COVID-19: Three Ways to Leverage Data

With COVID-19 presenting unprecedented challenges, health systems are struggling to financially survive. With little data about the novel coronavirus, traditional financial approaches that rely on historical information are not sufficient. However, organizations can get back on the road to financial recovery and well-being by practicing three key strategies centered around data:

Prioritize access to real-time data.
Understand data at a deeper level.
Realize margin and cost by service line.

Leveraging data allows financial healthcare leaders to effectively manage the COVID-19 challenges and prepare their health systems for future obstacles.

Activity-Based Costing in Healthcare During COVID-19: Meeting Four Critical Needs

As health systems increasingly transition to a value-based care model, the financial strains and uncertainty of COVID-19 have placed more urgency on cost management. More than ever, organizations need a costing solution that helps them understand the true value of their services. With the right next-generation activity-based costing (ABC) tool, health systems can access the detailed data they need to lower the cost of care, automate costing activities, and reduce administrative costs while preparing for the mounting intricacy of the post-pandemic setting.
Activity-based costing meets healthcare’s complex COVID-19-era costing needs by addressing four big challenges:

Data management.
Scalability.
Ongoing maintenance.
Adoption.

A Healthcare Mergers Framework: How to Accelerate the Benefits

Health system mergers can promise significant savings for participating organizations. Research, however, indicates as much as a tenfold gap between expectation and reality, with systems looking for a savings of 15 percent but more likely to realize savings around 1.5 percent.
Driving the merger expectation-reality disparity is a complex process that, without diligent preparation and strategy, makes it difficult for organizations to fully leverage cost synergies. With the right framework, however, health systems can achieve the process management, data sharing, and governance structure to align leadership, clinicians, and all stakeholders around merger goals.

Putting Patients Back at the Center of Healthcare: How CMS Measures Prioritize Patient-Centered Outcomes

Today’s healthcare encounters are too often marked by more clinician screen time than patient-clinician engagement. Increasing regulatory reporting burdens are diverting clinician attention from their true priority—the patient. To put patients back at the center of care, CMS introduced its Meaningful Measures framework in 2017. The initiative identifies the highest priorities for quality measurement and improvement, with the goal of aligning measures with CMS strategic goals, including the following:

Empowering patients and clinicians to make decisions about their healthcare.
Supporting innovative approaches to improve quality, safety, accessibility, and affordability.

Three Key Strategies for Healthcare Financial Transformation

To succeed in today’s rapidly evolving business environment, healthcare organizations must have accurate financial data. Approximately 50 percent of CMS payments are now tied to a value component; hospital operating margins are at an all-time low; and consumer demands are rising with their costs. In order to meet these new challenges, health systems must shift their strategy or risk being left behind. This article details the operational, organizational, and financial strategies that drive financial transformation, as well as examples of how to obtain and utilize financial data, find waste reduction opportunities, and much more.

Healthcare Quality Improvement: A Foundational Business Strategy

Waste is a $3 trillion problem in the U.S. Fortunately, quality improvement theory (per W. Edwards Deming) intrinsically links high-quality care with financial performance and waste reduction. According to Deming, better outcomes eliminate waste, thereby reducing costs.
To improve quality and process and ultimately financial performance, an industry must first determine where it falls short of its theoretic potential. Healthcare fails in five critical areas:

Massive variation in clinical practices.
High rates of inappropriate care.
Unacceptable rates of preventable care-associated patient injury and death.
A striking inability to “do what we know works.”
Huge amounts of waste.

Activity-Based Costing: Healthcare’s Secret to Doing More with Less

Delivering high-quality, cost-efficient care to specific patient populations within a service line is nearly impossible without a sophisticated costing methodology. Activity-based costing (ABC) provides a nuanced, comprehensive view of cost throughout a patient’s journey and reveals the “true cost” of care—the real cost for each product and service based on its actual consumption—which traditional costing systems don’t provide.
With the true cost of care at their fingertips, healthcare leaders can identify at-risk populations earlier—such as pregnant women diagnosed with gestational diabetes mellitus—and more quickly implement effective interventions (e.g., more scrupulous monitoring and earlier screenings). Health systems that leverage the actionable insight from ABC further benefit by implementing the same, or similar, process/clinical improvement measures across other service lines.

Healthcare Data Management: Three Principles of Using Data to Its Full Potential

Author Douglas Laney is now tackling the topic of Infonomics: the practice of information economics. In his 2017 book, Infonomics: How to Monetize, Manage, and Measure Information as an asset for competitive advantage, Laney provides detailed rationale as well as a thoughtful framework for treating information as a modern-day organization’s most valuable asset.
This article walks through how healthcare organizations can leverage data to its full potential using this framework and the three principles of infonomics:

Measure – How much data does the organization have? What is it worth?
Manage – What data does the organization have? Where is it stored?
Monetize – How does the organization use data?

How Healthcare Cost-Per-Case Improvements Deliver Big Bottom-Line Savings

As health systems face more pressure than ever to deliver cost savings, they’re turning their attention to cost-per-case improvement projects. These strategies can produce quick wins for improvement teams looking to gain momentum and buy-in. This article addresses the following topics:

How to identify areas of opportunity.
The importance of costing accuracy.
Four strategies for implementing cost-per-case improvement projects.
Example projects for new teams.
How to sustain results.

Today’s Top Five Healthcare Payer Financial Opportunities

Healthcare payers today must develop new business models to address the industry’s mounting challenges around cost, access, and quality. The best emerging models are simple and aligned, accommodate all stakeholders’ needs, and center on the patients/members.
Five key payer opportunities provide a framework for new models that will support the healthcare transformation goals of lower cost, better quality, and increased access:

Understand the impact of the Affordable Care Act.
Be ready for potential shifts due to regulatory impacts.
Understand how social determinants of health impact members.
Focus on provider relations.
Prepare for future trends.

How to Increase Cash Flow Using Data and Analytics

In today’s challenging environment, healthcare leaders must seek opportunities to boost revenue through improved financial performance and reimbursement. Some common strategies include reducing the number of outstanding bill hold accounts, reducing A/R days, and managing discharged not final billed (DNFB) cases.
This article tackles, the following topics:

Common reasons accounts remain unbilled.
Identifying opportunities for improvement.
Using data analytics and process improvement to achieve financial goals.
Creating lasting improvements.

Five Action Items to Improve HCC Coding Accuracy and Risk Adjustment With Analytics

A hot topic in healthcare right now, especially in the medical coding world is the Hierarchical Condition Category (HCC) risk adjustment model and how accurate coding affects healthcare organizations’ reimbursement.
With almost one third of Medicare beneficiaries enrolled in Medicare Advantage plans, it’s more important than ever for healthcare organizations to pay attention to this model and make sure physicians are coding diagnoses appropriately to ensure fair compensation. This article walks through basics of the risk adjustment model, why coding accuracy is so important, and five action items for interdisciplinary work groups to take. They include:

Having an accurate problem list.
Ensuring patients are seen in each calendar year.
Improving decision support and EMR optimization.
Widespread education and communication.
Tracking performance and identifying opportunities.

Why Clinical Quality Should Drive Healthcare Business Strategy

Healthcare today is in the midst of a massive transformation. The opportunities for improvement are great if healthcare systems can do the following:

Reduce clinical variation.
Reduce rates of inappropriate care and care-associated patient injury and death.
Follow accepted best care practices.
Eliminate waste.

This article covers the different types of waste in healthcare systems, ways to reduce them, financial alignment around waste reduction opportunities, and the importance of reducing clinical variation. The core driver of healthcare systems must be improving clinical quality. Almost always, with proper clinical management, better care is cheaper care through waste management.

DSRIP in 2018: Continuing Efforts for Medicaid Reform

As a performance-based incentive program, DSRIP (the Delivery System Reform Incentive Payment) is designed to help participating states reform Medicaid. To date, 13 states have implemented DSRIP and received a Section 1115 waiver from CMS to transform their Medicaid programs and align them with value-based reimbursement. These states have agreed to budget neutrality, transparency, statewide quality metrics, and frequent reporting of outcomes.
While each state’s program structure and objectives are unique, under DSRIP, participating states share three key goals:

Reducing the total medical spend.
Improving patient outcomes.
Establishing a direct link between provider performance and payment.

How UPMC and Health Catalyst Improve Outcomes Using Innovation in Activity-based Costing

UPMC and Health Catalyst created a great business partnership focused on sharing risks and rewards to innovate how activity-based costing (ABC) is done in healthcare. The partners relied on complementary intellectual property, complementary talent, and complementary risks and rewards to drive benefits that extend beyond either organization’s borders. Health Catalyst licensed UPMC’s activity-based costing software, which served as the foundation for the Health Catalyst CORUS suite. Together, the partners will continue to work for innovations in ABC to drive outcomes improvements in healthcare.

Linking Clinical and Financial Data: The Key to Real Quality and Cost Outcomes

Since accountable care took the healthcare industry by a storm in 2010, health systems have had to move from their predictable revenue streams based on volume to a model that includes quality measures. While the switch will ultimately improve both quality and cost outcomes, health systems now need the capability of tracking and analyzing the data from both clinical and financial systems. A late-binding enterprise data warehouse provides the flexible architecture that makes it possible to liberate both kinds of data to link it together to provide a full picture of trends and opportunities.

Transforming Healthcare Analytics: Five Critical Steps

By committing to transforming healthcare analytics, organizations can eventually save hundreds of millions of dollars (depending on their size) and achieve comprehensive outcomes improvement. The transformation helps organizations achieve the analytics efficiency needed to navigate the complex healthcare landscape of technology, regulatory, and financial challenges and the challenges of value-based care.
To achieve analytics transformation and ROI within a short timeframe, organizations can follow five phases to become data driven:

Establish a data-driven culture.
Acquire and access data.
Establish data stewardship.
Establish data quality.
Spread data use.