Analytics Key to Driving Value-Based Models
Data is essential to the financial viability of every health organization, and is becoming even more so with the emergence of value-based models. Change Healthcare experts Marcy Tatsch, Vice President and General Manager of Reimbursement Optimization Solutions; Jeff Akers, Senior Consultant for Financial Management; and Ron Iller, Director of Product Management for Healthcare Analytics; discuss how hospitals, health systems, payers and physicians can use data and data analysis in the revenue cycle to improve overall financial management.
What are the top three challenges physicians and health systems face in managing finances today?
TATSCH: It sounds pretty basic but maintaining financial viability is Number 1. Providers are worried about keeping the doors open, especially in the face of increasingly complex reimbursement. A second challenge continues to be managing and preventing claims denials. A third is aligning clinical and financial experiences for patients. A poor financial experience for a patient is becoming just as harmful as a poor clinical one.
ILLER: From the health system perspective, the transition from fee-for-service is top-of-mind. To be successful, there are three key challenges to overcome: understanding the impact of quality on costs and revenue; acquiring all the data needed to make timely decisions in support of population-based models; and having appropriate analytic tools to effectively manage populations.
AKERS: For many independent physicians and physician groups, independence remains important. So a top challenge is determining how to maintain their independence and quality reputations in an era of consolidation. One key to success is to ensure the group thinks like a business while simultaneously caring for patients. That means they must understand the financial implications of every decision–on both the revenue and expense side of their business.
How about in the future as they continue to transition to value?
TATSCH: The biggest uncertainty is the revenue stream, so providers are looking for new tools to look at the data in their systems – denial problems, revenue velocity. They’re using this data to improve patient care and backend revenue cycle processes.
ILLER: Understanding costs is another enormous challenge in this transition. In the fee-for-service world, most systems have a good line of sight on what their volumes are, but in value and risk models, it can get murky. For instance, the complexity of out-of-network data makes it difficult for some to get a good line of sight on out-of-network exposure.
AKERS: For independent physicians, the challenge is getting their hands around what value-based models mean for their practices. By now, most have heard about them and know they’re coming. But some physicians don’t know exactly what they’re going to do as a practice to stay compliant and how the reimbursement aspect of value-based models will impact them.
What’s the best strategy to pinpoint and address these challenges?
ILLER: You absolutely need analytics; but if you don’t have a solid strategy around how you’re going to acquire the data from all the various sources, you’re going to fail. Not all data is created equal, and a lot of it is pouring in. Being able to curate and de-duplicate all of that data so that you’ve got the best version of it is a huge win.
AKERS: As we’ve said, there’s a lot of data available. But for an independent practice where physicians already put in long hours, sitting down at the end of the day to do data analytics isn’t going to be effective, in most instances. A good strategy is to have a committee or subset of the practice dedicated to work with their revenue cycle manager or practice manager to understand the data, identify what it’s saying and make effective decisions from it. This is not a one-and-done concept, but an ongoing process of understanding and making adjustments.
How can providers work more collaboratively with payers?
TATSCH: Payers and providers would benefit from a more holistic approach to revenue cycle management – something that takes work out for both sides. A great place to start is the prior authorization process. Today, it is a needlessly manual process. Payers, providers and patients would benefit from reducing these manual touch points through technology.
ILLER: From my perspective, data consistency, timeliness and standards will make a big difference. Giving providers the ability to get the same data in the same format from a multitude of heterogeneous payers will reduce a good bit of the IT burden and move the needle in the right direction.
Can you identify benchmarks a practice or hospital can use to improve financial performance?
AKERS: Monitoring financial benchmarks is the key to growing your practice and succeeding in a value-based environment. For physicians, a top one is net collection per procedure. Another KPI is productivity, which lets you see outliers and dive into reasons for lower productivity.
TATSCH: For a hospital today, payment velocity is a great metric from a revenue cycle and financial performance measure. Others include claim quality, reimbursement rates and discharged not final billed. Revenue cycle specialists can use these to make sure they’re getting paid for services rendered and that their processes align with industry standards.
ILLER: Understanding cost per visit, service or unit and how each impacts margin per unit is important for providers. Further, having key quality metrics (ALOS, readmissions and population-based measures) provides the ability to see how quality impacts cost and margin.
Latest News> VIEW ALL NEWS
Stay Up To Date!
Get the latest revenue cycle insights delivered right to your inbox.