The metrics CFOs are following to run their business
As healthcare organizations transition to value-based payment, it is more important than ever for chief financial officers to meticulously track key financial metrics. This is where data analytics can be invaluable.
But with so much data being generated throughout the revenue cycle and other healthcare IT systems, which are the most critical and telling metrics on which CFOs should focus?
RelayHealth singles out four specific metrics that can help healthcare CFOs gauge how well their organizations are making the shift to ICD-10 – Days to Final Bill, Days to Payment, Denial Rate, and Reimbursement Rate. No doubt, these are numbers that should always bear close scrutiny by healthcare CFOs.
There are other significant indicators well worth following, however. Healthcare Finance News this week talked with two CFOs about the metrics they consider to be the most significant.
Cincinnati Children's Hospital CFO Christopher Lah relies on a number of key metrics across the revenue cycle.
"For every step of the rev cycle, there needs to be one power metric associated with it," he tells HFN’s Beth Jones Sanborn. In the case of CCH, there are 10 different steps in the revenue cycle, including scheduling/registration, utilization review, coding/charge entry, billing, account follow-up, and customer service.
By watching efficiency indicators in each of the 10 steps on his financial dashboard, Lah says, he can spot potential problems before they get out of control.
“The minute one of the indicators doesn't look right, either in relationship to the rest of the report or benchmarking it against itself, I'm going to drill down and ask more questions about what's going on," he tells HFN.
For all his attention to each separate part of the revenue cycle, Lah’s overall view is informed by three metrics: Cash collected versus projections and historical performance (“the heart and soul of your engine,” he says), cost to collect, and patient satisfaction.
Intermountain Executive Vice-President/CFO Bert Zimmerli tells HFN he is into “long-term indicators” of financial stability, rather than scrutinizing metrics on a daily basis. Those indicators include debt-to-equity ratio, days of cash, and a handful of non-financial factors such as clinical board goals, employee engagement goals, and service excellence.
Zimmerli says while he sees the value in short-term data, he tries to keep his focus on the big picture.
"Don't get me wrong; we are an evidence-driven organization, so you do have to have metrics,” he tells HFN. “You can't run things on gut feel. But on a daily basis, there's not too many things I would look at and make a course correction."
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