HIM Challenges: Analytics Provides a Window Into the Revenue Cycle
By Trevor Kobe
For The Record
Vol. 26 No. 1 P. 26
When it comes to visibility on key metrics across the revenue cycle, health care leaders often find themselves navigating in the dark. Plagued by disparate financial and operational data sources, they have traditionally been forced to connect the dots through multiple reports, a labor-intensive effort that is often outdated by the time conclusions have been reached or actions taken. Not having data to identify root causes, make informed decisions, and deploy corrective actions can have a negative impact on operations and the bottom line.
With average hospital margins at less than 8% and 30% of hospitals operating with a negative margin, having a window into what is going on across the revenue cycle is fundamental to reducing the cost to collect, improving revenue yield, and more. The need for analytics and end-to-end visibility into the revenue cycle is not just important, it is necessary for the health of a hospital revenue cycle.
Due to rising costs, there’s a huge need for analytics in health care, especially in the United States. A McKinsey report states, “After more than 20 years of steady increases, health care expenses now represent 17.6% of [gross domestic product]—nearly $600 billion more than the expected benchmark for a nation of the United States’ size and wealth.” In other words, costs are much higher than they should be, and they have been increasing for the past 20 years.
Clearly, health care needs smart, data-driven thinking in this area. And current incentives are changing as well—many insurance companies are switching from fee-for-service plans (which reward using expensive and sometimes unnecessary treatments and treating large amounts of patients quickly) to value-based care plans that prioritize patient outcomes.
Focusing on Value vs Volume
Value-based care is the synthesis of sick care, preventive care, and wellness promotion through greater patient engagement, stronger patient solutions, sophisticated technology and analytics, and a top-down commitment to excellence across the continuum of care.
The end game of value-based care is population health, which the National Center for Biotechnology Information defines as “the health outcomes of a group of individuals, including the distribution of such outcomes within the group.”
However, the Centers for Disease Control and Prevention and others take this one step further; population health has come to encompass “the distribution of health outcomes within a population; the range of personal, social, economic, and environmental factors that influence the distribution of health outcomes; and the policies and interventions that affect those factors.”
Ultimately, making population health work for patients and providers requires garnering greater insight into communities and utilizing a wealth of health care data that we’ve never had access to before now. Contemporary technology and analytics are introducing both the clinical and financial insights necessary to manage population health, reduce care costs, and improve the experience of care.
Technology and analytics are becoming essential to understand episode costs and effectively estimate for alternative payment models such as bundled payments. In a bundled payment scenario, the aim is to control costs while also improving patient solutions and outcomes. For bundling to be successful, it is essential to identify variations in physician performance and outline ways to drive quality improvement, reducing cost and increasing physician accountability.
Active patient tracking is also essential in that it allows providers to understand the current performance of the entire care management program, quickly identifying and monitoring high-risk, high-cost patients without delay. The power of analytics can also help head off potential problems and reduce costly interventions such as hospital readmissions.
Competencies around data use are strong enablers of success under a value-based payment model. Specifically, analytical support competencies—including business intelligence and actuarial, use of consistent care quality measures, and the ability to monitor adherence to medically recommended regimens at the patient level—all ranked high in enabling organizations to take on risk-based, alternative payment arrangements.
Utilizing Technology to Integrate Data
Without technology, manual reporting and even automated reporting from multiple sources can be difficult to accomplish. By the time the data are collected, they may be outdated or no longer credible.
Some analytics solutions require health care organizations to feed vendors data, tying up hospital resources to write queries, package and send data, set up data pools, and more. Gathering the data can be taxing and time consuming for IT resources to compile.
By using technology to standardize into a single data set, disparate systems can be brought together and aggregated, creating a single view to show performance on key metrics across the front, middle, and back of the revenue cycle for both acute and ambulatory settings.
In addition to outcomes that can be achieved by taking action based on data, some organizations may see a side benefit, as greater use of technology frees up personnel who normally compile data from disparate sources, create reports, and analyze the findings to determine root causes and interventions.
By collecting data that are arriving, the technologies in the market can help make informed decisions, leading to improved quality of care and better financial outcomes.
Meeting Health Care Organizations Where They Are
Hospitals are unique in the patients they see, the services they provide, and the way they are managed and operated. Each organization needs access to its information in a way that is specific to its challenges and needs, which can be accomplished through user-specific dashboards. This allows for improved productivity and focused decision-making, enabling the identification of opportunities and interventions.
Having full revenue cycle visibility provides leaders with a wealth of information, including the following:
• accurate, end-to-end revenue cycle management reporting;
• clear visibility into key metrics;
• single-source monitoring; and
• insight to identify opportunities and interventions.
Drilling down, this typically enables visibility into the following:
• cash percentage of goal;
• unbilled days;
• overall financial performance;
• accounts receivable metrics (percentage of debit accounts receivable >90 days); and
Having this level of detail gives organizations the ability to identify areas for improvement so their teams can intervene, ultimately increasing cash and reducing cost to collect.
Taking the Analytics Plunge
Before organizations go all-in on an analytics implementation, it is important to weigh the pros and cons. Will analytics take you further than the capabilities already present in your EHR? How well will it integrate with your EHR platform? Can you aggregate across all data sets and filter down into different areas of your revenue cycle? How often are the data refreshed? How long will it take to get the technology up and running, and at what cost?
While there is much to consider, those that take the plunge are finding that automating with health care revenue cycle analytics can take them to the next level. Once cumbersome, ineffective data collection processes are streamlined and aggregated, it is like removing the blinders, giving way to new possibilities. Centralizing data brings clarity, enabling leaders to identify opportunities, take corrective actions, and monitor success.
Ultimately, this also results in greater profitability, starting with process efficiency improvements and extending to everything from monitoring physician performance to developing forward-thinking population health strategies for value-based care.
— Trevor Kobe is president of analytics at nThrive Analytics.