Use Data to Your Advantage Achieve clarity with revenue cycle benchmarking BY NADER SAMII

Change remains the one constant in health care today. From payer behav- ior to increased patient financial responsibility,

and price transparency to value-based medicine, old assumptions are no longer valid.

Data is helping leading health care

organizations find clarity in this new landscape, clinically and operationally. Increased information sharing across health systems is leading to better out- comes, as opportunities for collabo- ration and access to high-quality spe- cialty care increase. It is also helping executives and managers make better business decisions faster.

Still, the health care industry appears to lag behind some of its peers when it comes to fully leveraging data in the decision-making process. According to PricewaterhouseCoopers’ “Global Data and Analytics Survey 2016,” 42 percent of health care orga- nizations consider themselves “highly data-driven,” compared with 46 per- cent for insurance companies, 49 per- cent for technology providers and 51 percent for energy firms. As the health care industry con- tinues to change, data-driven deci- sion making may well prove the dif- ference between success and failure, especially for ASCs and other small providers that are especially sensi- tive to cost overruns and high labor expenses, and can quickly succumb to cash flow issues. For example, last fall’s 10th revi- sion of the International Statistical Classification of Diseases and Related Health Problems (ICD-10) transition presented outpatient facilities with steep operational challenges that, so far, have proved largely manageable


costs for some plans reaching 30 per- cent or more in the coming years. According to the Advisory Board, 68 percent of patients with a deductible between $500 and $999 are likely to pay their bill, while only 36 percent of

individuals with high-deductible

for well-prepared organizations. Still, an uptick in ICD-10-related docu- mentation requests, we have seen, can extend the revenue cycle and affect an ASC’s short-term cash flow. In these cases, actionable information plays a big role in guiding the decision-mak- ing process, identifying trends and allowing physician owners to fine-tune operations in real time.

By the Numbers: Benchmarking “Cash is king.” Until recently, few would have

argued how relevant that statement was in the health care industry, but the Affordable Care Act changed all of that. With patients paying more out-of-pocket than ever before, health care providers are learning what their counterparts in other sectors have known for decades: Customers are less inclined to pay after receiving a good or service. In fact, The Advisory Board Company research suggests “increas- ing [point-of-service] collections is the single most powerful tool for decreas- ing uncompensated care.” The higher the deductible, the less

likely a patient will pay—a potentially troublesome reality with out-of-pocket

health plans—$5,001 to $6,350—are likely to pay their bills. Patients also are less likely to pay their outstanding outpatient surgery balances than other medical bills, Advisory Board research shows. In terms of net patient revenue, 4.6 per- cent of all outpatient surgery balances wind up as bad debt, compared with 2.8 percent for inpatient surgery and 2.9 percent for general inpatient medi- cal care. Outpatient surgery-related bad debt is more expensive on average than other forms of medical care, with each case costing about $733. As a comparison, the Advisory Board found that bad debt associated with general outpatient care—which includes emer- gency room visits—is $240. Point-of-service cash collections is just one revenue cycle benchmark ASCs can track to maintain a healthy cash position and long-term financial growth. Others include: ■

Net revenue per case

■ Total clinical hours per case ■ Medical supply costs per case ■ Inventory turnover ■

Total cases per number of operating rooms ■ Net collection ratio ■ Days to bill

■ Days to pay, by payer ■ Denial rate

■ Appeal success rate ■

Current Procedural Terminology (CPT) by case

■ Days in accounts receivable (A/R) ■ Bad debt write-off percent

The advice and opinions expressed in this column are those of the author’s and do not represent official Ambulatory Surgery Center Association policy or opinion.

Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42