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Financial Alignment and ROI

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How to Prepare for Value-based Purchasing in 4 Steps

I spent many years of my career as a healthcare finance executive in the state of California, where I had the opportunity to participate in several groundbreaking pay-for-performance (P4P) initiatives. However today, things have grown much more complex and intimidating. Health systems have to report on Medicare quality measures that determine important incentives and penalties. Add to this the host of private payers who have established their own value-based programs, all of which require different metrics. In this post, I discuss 4 lessons learned for success in VBP: 1) assessing your performance 2) education programs, 3) your analytics strategy, and identifying areas for clinical quality and cost improvement.

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The Real Reason Healthcare Costs Are Elusive

These past few years have seen a lot of coverage on healthcare costs. But a majority of these articles just confuse the issue. Some of the reasons healthcare costs are elusive do not include: 1. Hospitals are hiding something. Or 2. There isn’t enough data. Instead, the real reasons behind the difficulty are: 1. Healthcare is complex. 2. Fragmentation. And, most importantly and pervasively, 3. Data governance. Until data governance becomes a priority, healthcare organizations will not be able to get clear answers for their healthcare costs.

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New Ranking Helps Prioritize Your Healthcare Cost Reduction Efforts With Surprising Results

When deciding to prioritize your clinical improvement or cost reduction efforts, it’s helpful to use clinical program costs as a key input. The idea is to start with the first three or four in the first year, then work down the list.  Most health systems prioritize using inpatient costs because they do not have access to outpatient data.  However as accountable care and population health efforts increase, looking at costs in silos will not be sufficient.  Under the leadership of Dr. Burton, our Health Catalyst team has been collecting, analyzing, and compiling a macro, industry-level view of inpatient and outpatient costs to serve as a guide for healthcare organizations who lack access to either of those views.  The following ranking is the first of its kind, combining months of detailed analysis of several California health systems to show a combined total of both outpatient and inpatient costs.  The results are surprising.  Adding outpatient costs significantly changes the cost rankings of many of the traditional top health system care processes.

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Hospital Revenue Cycle Management: 5 Ways to Improve

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:

  1. Trend and benchmark your healthcare data.
  2. Use DOS to Mine Your Healthcare Data.
  3. Constantly ask frontline staff for suggestions.
  4. Monitor all payer contracts.
  5. Maintain convenient and caring touch points with patients.

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Financial Alignment and ROI - Additional Content

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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.

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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?

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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:

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

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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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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.

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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:

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

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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.

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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:

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

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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.

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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.

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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:

  1. Establish a data-driven culture.
  2. Acquire and access data.
  3. Establish data stewardship.
  4. Establish data quality.
  5. Spread data use.

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Value-Based Purchasing: Four Need-to-Know Domains for 2018

Health systems that meet the 2018 Hospital Value-Based Purchasing Program measures stand to benefit from CMS’s $1.9 billion incentive pool. Under the 2018 regulations, CMS continues to emphasize quality. To reduce the risk of penalty and vie for bonuses, it’s increasingly critical that organizations leverage data to build skills and processes that meet more demanding reimbursement measures. To thrive under value-based payment, healthcare systems must understand CMS’s four quality domains, and their associated measures, for 2018:

  1. Clinical Care
  2. Patient- and Caregiver-Centered Experience of Care/Care Coordination
  3. Efficiency and Cost Reduction
  4. Safety

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Prioritizing Healthcare Projects to Optimize ROI

Healthcare organizations have long relied on traditional benchmarking to compare their performance to others and determine where they can do better; however, to identify the highest ROI improvement opportunities and understand how to take action, organizations need more comprehensive data. Next-generation opportunity analysis tools, such as Health Catalyst® Touchstone™, use machine learning to identify projects with the greatest need for improvement and the greatest potential ROI. Because Touchstone determines prioritization with data from across the continuum of care, users can drive improvement decisions with information appropriate to their patient population and the domains they’re addressing.

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Resolving Uncompensated Care: Artificial Intelligence Takes on One of Healthcare’s Biggest Costs

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.

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Five Solutions to Controlling Healthcare’s Cost Problem

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:

  1. Refocus on labor management.
  2. Manage employed physicians.
  3. Change the patient encounter environment.
  4. Augment standard approaches with technology.
  5. 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.

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Hospital Revenue Cycle Management: 5 Ways to Improve

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:

  1. Trend and benchmark your healthcare data.
  2. Use DOS to Mine Your Healthcare Data.
  3. Constantly ask frontline staff for suggestions.
  4. Monitor all payer contracts.
  5. Maintain convenient and caring touch points with patients.

Read More
My Folder