Uncompensated care can cost large health systems billions of dollars annually, making outstanding balances one of their biggest costs. Propensity-to-pay tools help organizations target unpaid accounts by using artificial intelligence (AI) to leverage external and internal financial and socioeconomic data and identify the likelihood that patients in a population will pay their balances (propensity to pay). With propensity-to-pay insight, financial teams can focus their efforts on patients most likely to pay, and connect patients who are unable to pay with charity care or government assistance. Both health systems and patients benefit, as patients can avoid bad debt and organizations receive compensation for care they’ve delivered.
When expenses exceed revenue, business has a financial problem. In healthcare, the focus has been on revenue for so long, we’ve lost sight of runaway costs brought about by high labor and technology expenses, inefficient use of resources, and supply waste. Recognizing the cost problem is a big first step toward solving it.
Five expense-controlling strategies can play a significant role in returning healthcare systems to a stronger financial position:
Refocus on labor management.
Manage employed physicians.
Change the patient encounter environment.
Augment standard approaches with technology.
Manage patient access and flow through the healthcare system.
With new, value-based payment structures, shrinking margins, and decreasing reimbursements, this insight offers some new ways to think about expense inefficiency and how to get costs under control.
Besides improving your information systems and educating your staff on the ins and outs of managing revenue, there are many more opportunities for improvement. Here are five suggestions to help health systems improve their revenue cycle management:
Trend and benchmark your healthcare data.
Use DOS to Mine Your Healthcare Data.
Constantly ask frontline staff for suggestions.
Monitor all payer contracts.
Maintain convenient and caring touch points with patients.
Influential healthcare financial trends in 2017 emerged in three areas:
Transitions in payment.
Disruption from familiar players and newcomers.
Emerging data skillsets.
Uncertainty has been a common theme for 2017. Organizations continue waiting for clarity on the future of the Affordable Care Act (ACA), while working to implement value-based care. Changes from established healthcare organizations as well as the arrival of prominent newcomers (e.g., Amazon) add to the unsettled outlook, as do emerging data skillsets.
Amid the uncertainty, however, healthcare is clearly continuing on the path to patient-centered care. Organizations best positioned for 2018 will understand their performance in 2017’s top three healthcare financial trends as they evaluate their preparedness for the coming year.
Many healthcare organizations invest for financial, strategic, and operational reasons. These investments cover a broad spectrum of opportunities, from medical technology, to delivery models, to promising new research. Health Catalyst follows these investment avenues, building long-term relationships, and connecting with its partners in three ways:
The sole focus of these investments and partnerships is outcomes improvement—a unique approach in healthcare—supported by the operating principles of ownership, pragmatic innovation, and transparency.
In this first article of a series, Kyle Salyers, Health Catalyst Senior Vice President of Business Development, explores the partnership “flywheel” and the collaborative nature that underscores a successful healthcare investment platform.
How can healthcare organizations set themselves up for success as the industry shifts from fee-for-service to value-based reimbursement? They need to understand risk of their patients and population to identify ways to reduce healthcare costs and improve quality of care. This makes total cost of care (TCOC) analysis a necessary skillset in this time of transition.
TCOC analysis leverages key elements of the healthcare analytics infrastructure to understand how money is being spent at the organization and identify the drivers of high cost:
An integrated EDW.
Payer reporting tools.
Claims and membership data.
Scorecards and dashboards.
Outdated technology and antiquated costing methodologies have left health system CFOs unable to see the true cost of the services they provide and impacts on patient outcomes. The move from fee-for-service to value-based contracts, however, means that CFOs need this information more than ever. Health Catalyst® has partnered with industry-leading health systems to develop a next-generation costing system: the CORUS™ Suite. Two integrated products comprise the suite:
Activity-Based Costing delivers accurate and actionable data from across the continuum of care in a scalable and maintainable tool.
Cost Insights analyzes and delivers early insights through a customizable dashboard powered by embedded logic and access to the most granular level of activity and costing data.
CORUS leverages Health Catalyst’s analytics platform and best-of-breed activity-based costing models to help users manage the true cost of care.
Healthcare Decision Support Helps CFOs Achieve Their Top Goal: Timely, Accurate, Agile Decision Making
Supporting decision making is a top goal for CFOs today, according to a 2017 Kaufmann Hall CFO survey. Healthcare decision support empowers CFOs and their finance teams to make accurate, agile, and timely decisions, from rolling forecasts of future trends to risk-adjusted scenario modeling.
In addition to helping CFOs make good decisions, healthcare decision support helps CFOs lead their teams and organizations improve in four key ways:
Data-driven growth and practice expansion.
Improved ability to negotiate favorable risk-based contracts with payers.
Effectively and fairly address important physician compensation issues.
Improve population health management.
With healthcare decision support, CFOs and their health systems have a distinct competitive advantage (e.g., shortened planning cycles and more accurate cost measurement). They can adjust to unexpected challenges and take advantage of new opportunities.
When it comes to transitioning to value-based reimbursement, health systems consistently ask two questions:
Why should I invest in reducing utilization when 90+ percent of my business is still fee-for-service (FFS)?
Where do I start?
This value-based reimbursement road map can help systems transition from barely surviving to successfully arriving (while respecting both shared-risk and FFS worlds):
Stop #1: Surviving— If you don’t get paid for the risk you take on, then you can’t survive long term.
Stop #2: Sustaining—Numerous clinical interventions occur in hospitals that systems can focus on to help improve the bottom line.
Stop #3: Succeeding—Build out competencies on a smaller population with aligned incentives so you can negotiate deeper alignment with key payers.
Stop #4: Arriving— The ultimate destination, where the lines between traditional healthcare delivery and public health are blurred.
Although healthcare is far from arriving at the value-based reimbursement destination, it can use this road map’s pragmatic strategies for heading down the right road.
Trump/Republican rhetoric recently met reality when it comes to the Affordable Care Act (ACA). The latest version of the bill that passed in the House is far from a complete repeal and replacement of the ACA. However, the bill includes significant changes to healthcare policy and coverage, from severe Medicaid cuts to shifting financial accountability.
ACA uncertainty has healthcare leaders concerned about how to plot a path forward, with three questions on the top of their minds:
What will the final bill look like?
How do I plan for the changes?
What should happen next to fix the problems with the ACA?
Answers to these questions, although helpful, distract the industry from the ultimate goal: delivering on healthcare’s longstanding mission to provide quality, affordable healthcare. In short, health systems need to continue prioritizing patients until the ACA dust settles in Washington.