This is a phrase that caught my eye here at #ANI2015 on the showroom floor. I’m sure the intent was to discuss revenue cycle solutions but for me this phrase manifests in other ways. Namely “understanding true cost” and “providing transparent pricing”. Both are important topics that correlate to consumerism and to the “Healthy Future” for hospitals.
Transparent pricing increases collections at the time of service, improves cash flow, reduces patient receivables and bad debt. Perhaps more importantly, for the patient it educates them on their financial responsibility from the beginning, allowing financial planning with no surprises and for the hospital, understanding fully burden margin provides a true margin to guide the business. There are many factors that influence price setting, not the least of which is the federal government (Medicare/Medicaid), but I suspect the reason that hospitals don’t more closely link pricing to margins is that they lack visibility into their own data.
Data is king and to understand and achieve sufficient transparency and maintain a proactive approach to maintaining margins, hospitals must be capable of correlating costs for supplies and drugs, etc. with the cost of the care providers and with overhead costs and then compare this with the payments from payers, individuals and other purchasers. While we certainly can’t take the federal government out of the equation for hospitals, recent expectations have been set for quality performance that may help the affected organizations begin to take a more margin focused view of pricing. Bringing together necessary data is not simple and definitely should be approached iteratively using a configurable set of analytic tools that can provide the right data at the right time to the right individuals in the organization who manage operations and continue or create new services.
Perficient specializes in implementing enterprise performance management solutions in healthcare and we’d love to talk to you about these challenges and how our clients are solving them using technology. We are exhibiting at HFMA National Institute 2015 #ANI2015 this week in Orlando. Stop by booth #1347 to view our demo and talk to us about your decision support objectives.
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