In an increasingly complex healthcare environment, physicians must base financial strategies on more than assumptions and anecdotes. They need analytics.
Frank Cohen presents a solid case for analytics in a recent Physicians Practice webinar, entitled Analytics Do Nothing for Your Practice’s Health – True or False?.
People often use limited information – what they think is true – to make management decisions. This approach can lead to three pitfalls:
Failure to observe – assuming you know what the problem is without seeing what is really happening
Failure to plan – assuming you know how to fix a problem without first finding out what is causing it
Failure to validate – assuming the action you have taken to fix the problem has worked without measuring it
Diagnosing financial issues with evidence
When physicians first assess patients, they may have some intuitive ideas about what’s wrong. To be sure, they will likely conduct tests, review lab results and consult other resources before diagnosing and prescribing treatment. In other words, physicians provide evidence-based care.
Physicians should apply the same principles to their business practices. With a complex revenue cycle – involving patients, payers and an ever-changing array of code sets – it is critical to build processes that optimize profitability. In other words, physicians must use evidence-based management.
Problem-solving with analytics
As an example, let’s look at a practical problem: We want to reduce days in accounts receivable. It’s tempting to just test practical solutions to this problem, based on what we think is going on. But we’ll increase our chances of a positive income if we apply analytics.
Now, let’s translate the practical problem into an analytical problem. To do that, we’ll need to address several questions, such as: How should we define accounts receivable? How do we calculate our receivables? Do we use rolling 12-month averages? How are we projecting future receivables?
We’ll need data for each individual step to develop an analytical solution. (In the webinar, Frank Cohen offers a workshop toolbox with data sets, articles and other resources to help with this process.)
If you have the right tools, getting this data is simple. To help illustrate the power of analytics solutions, Cornerstone Health Care shared its experiences as part of the webinar.
Cornerstone Health Care achieves better outcomes with business analytics
Located in North Carolina, Cornerstone Health Care is a multi-specialty 375-provider group that serves 800,000 patients annually. Using Allscripts Practice PerformanceTM, a business analytics and comparative benchmarking solution, Cornerstone applied analytics to several areas.
According to Penny Whitaker, business systems manager at Cornerstone, the solution provided insights in several key areas including reimbursements, accounts receivable, resource utilization, staff and physician coding, claim processing, payer performance and more.
Practice Performance also provides Cornerstone with new capabilities that have helped them improve their financial and operational performance such as:
Proactive email alerts that notify designated staff when key performance indicators fall outside an acceptable range;
Interactive dashboards that summarize key performance indicators, and enable staff to quickly drill down into the details with the click of a mouse; and
Comparative benchmarking charts that help the practice compare itself against peers by geography or specialty, and compare results within the different locations and departments at Cornerstone.
Cornerstone used these insights to make informed revenue cycle management decisions. For example, team members looked at claim denials by location, including registrations, pre-authorizations and referrals. They were able to see the data from different perspectives, including comparing results among different offices.
The result? Cornerstone identified new denial trends stemming from payer and regulatory changes. In one example, Cornerstone’s billing supervisor investigated denials from Medicare. Using analytics, she was able to quickly examine if the issue was affecting other payers and see the denial code volume. The team determined that a simple change to the claims format would address the problem. Cornerstone also identified new areas for training and improvements to the check-in and registration process.
Stop guessing, start knowing
As the webinar concluded, Frank Cohen observed that the healthcare industry is facing a monumental shift. If practices don’t handle data with analytics, they won’t be in business. If they’re not able to adapt, they won’t survive.
For more information, listen to the webinar or contact Allscripts Solutions Consultants at 1.800.334.8534.