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Financial Alignment and ROI

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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:

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

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Charge Capture Optimization: Target Five Hotspots to Boost the Bottom Line

As health systems continue to adapt to the pandemic healthcare landscape, certain challenges remain—including generating revenue on thin operating margins. Poor charge capture is a common reason behind lost revenue that healthcare leaders often fail to address. Because charge capture is the process of getting paid for services rendered at a hospital, poor charge capture processes mean the hospital does not get paid in full for a service, resulting in lost revenue that is typically unrecoverable.

Health systems can avoid financial leakage and increase profits by focusing on five problem areas within charge capture practice:

  1. Emergency services.
  2. Operating room services.
  3. Pharmacy services.
  4. Supply chain and devices.
  5. CDM mapping.

The Healthcare Revenue Cycle: How to Optimize Performance

Health systems rely on effective revenue cycle management to follow the patient journey, navigate claims, and ensure the organization collects payment for its services. In today’s complex and fluid healthcare industry, in which revenue cycle management is about much more than billing and collecting payment, traditional revenue cycle approaches can’t meet escalating demands. Additionally, with lost volume due to COVID-19, organizations can’t afford to miss an opportunity for payment. The contemporary healthcare landscape requires a comprehensive, standardized, and data-driven revenue cycle process. Health systems that leverage data to support revenue cycle management improve their financial outcomes in three significant ways:

  1. Reduce denials.
  2. Increase collections with propensity-to-pay insight.
  3. Improve discharged-not-final-billed efforts.

Predicting Denials to Improve the Healthcare Revenue Cycle and Maximize Operating Margins

Healthcare financial leaders are constantly brainstorming ways to increase operating margins through better revenue cycle performance. These efforts often lead revenue cycle leaders to denied claims—when a payer doesn’t reimburse a health system for a service rendered. Although denials are a common reason for lost revenue, experts deem nearly 90 percent avoidable. Effective denials management starts with prevention. Organizations can use revenue cycle performance data, combined with artificial intelligence, to predict areas within each claim’s lifecycle that are likely to result in a denial. With denial insight, health systems can optimize revenue cycle processes to prevent denials and increase operating margins.

Healthcare Price Transparency: Understanding the Cost-Pricing Relationship

Healthcare consumers are demanding the same level of price transparency for medical care they have in other transactions—particularly as healthcare moves away from a fee-for-service model and patients are responsible for larger portions of their medical bills. Meanwhile, as of January 2021, federal regulation requires health systems to make their service charges publicly available. The healthcare industry, however, hasn’t historically succeeded with consumer-grade price transparency. Organizations must now figure out how to bridge the gap between their costs and patient charges. Doing so requires comprehensive understanding of all the costs behind a service and consumer-friendly explanation of how these expenses translate into prices.

Three Cost-Saving Strategies to Reduce Healthcare Spending

Health systems continue to face fiscal challenges and burdens due to changing reimbursement rates, COVID-19, and managing the aftermath of care disruptions from the pandemic. Operating on thin margins with limited resources means health systems need to adopt alternative cost-saving measures to maximize limited resources. Comprehensive, reliable data increases visibility into expenses across the care continuum so that leaders can leverage new methods to save money, generate income, and accelerate cashflow to keep patients healthy and hospital doors open. With access to recent data, health systems can focus on three cost-saving strategies:

  1. Increase physician engagement.
  2. Predict propensity to pay.
  3. Implement evidence-based standards of care.

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:

  1. Election impact.
  2. Price transparency.
  3. Financial forecasting.
  4. Value-based care.
  5. 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:

  1. Identify bad debt exposure early.
  2. Educate patients about alternative payment options.
  3. Leverage technology within the workflow.
  4. 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:

  1. Satisfy increasing patient interest in cost of care.
  2. Earn patient trust—a short- and long-term imperative.
  3. 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:

  1. Advance access.
  2. Optimize resources.
  3. 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:

  1. Identify and measure the right metrics.
  2. Define clear lines of accountability.
  3. Create consistent workflows.
  4. Define key performance indicators.
  5. 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:

  1. Prioritize access to real-time data.
  2. Understand data at a deeper level.
  3. 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:

  1. Data management.
  2. Scalability.
  3. Ongoing maintenance.
  4. 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.