Getting the most out of benchmarks and key performance indicators (KPIs)

With the ever-growing financial problems that all health care organizations face, how best to use various performance indicators to increase cash, reduce debt cancellation debt and improve the overall efficiency of the revenue cycle? Despite the fact that an organization may require many factors that may be required in an organization to ensure maximum income levels (technology needs, training needs, relationships with payers, employee incentive programs, etc.), the constant need for comparative benchmark with increased / financial class data will increase with decreasing operating profit.

For example, payers who make up a very small percentage of the patient’s total gross income cannot be adjusted and evaluated as larger payers; however, in these small payer groups that affect the revenue cycle, significant dollar losses can be lost. Even HARA (benchmark in hospital receivables) does not issue payers, such as employee compensation, Tricare claims or vehicles to its financial class. With fewer and fewer resources available, there is no longer a luxury available only for certain areas of the revenue cycle. More accurate analysis and the use of additional key performance indicators (KPIs) may be needed to help identify areas that need improvement, as well as the ability to deploy these identified problem areas to develop effective solutions for obtaining and maintaining the cycle cycle at maximum performance.

MAIN INDICATORS OF OPERATION

Days in A / R

With the growth of technology, along with higher volumes of available data, benchmarking and KPI should be considered not only as a tool to improve financial performance, but also to improve process performance. When we analyze various key performance indicators, we may find that our organization is not working on best practice standards because of the necessary technological and operational changes. For example, if our common days of A / R are higher than our peers, we need to know the features of what causes this problem. We can find out that our day A / R does not meet the requirements, mainly due to the lack of electronic exchange with a specific payer, the volume of which has increased over the last year. That is why you need to look not only at the general A / R days, but also at the A / R days according to the payer class. Organizations. Common A / R days may look good, but this may be due to a much higher Medicare ratio or lower self-pay than their peers. We must look at all payers to establish key performance indicators for each type of payer, to make sure that we act as close as possible to the best practice standards for all of them, and not just in aggregate. Once we know what the criteria should be for each payer, we can quickly identify areas that may require attention, as well as track current performance.

Payer

As mentioned earlier, knowing the breakdown of where an organization’s revenue comes from, how a change in mix will affect overall A / R days, the availability of KPI for each type of payer, and then using these key performance indicators to identify trends can help improve or maintain optimal performance. For example, if your commercial gross payer A / R days averaged about 60 days and then slowly begins to grow, you are now warned that the problem arises within this class of payers, and not just the definition that common days grow. If you looked at common A / R days, your growing commercial A / R days may not be recognized due to the fact that another payer class works better than usual, so it compensates for the gross A / R days in total. Recognizing trends and developing problems at an early stage of the cycle, one can solve the problem of identifying specific causes as soon as possible and consider them. With the advent of consumer-oriented health plans, days of self-remuneration can begin to grow for many organizations; thus, affecting cash, debt, debt, outsourcing, etc. However, recognizing this trend at the beginning of the cycle and having a KPI for this payer group, the action can be taken specifically for the self-employment group.

Fee

Hospital Receivables Analysis (HARA) reports on the organization of health care. the cost of collecting the size of the bed, geographic location, geographical settings, etc. However, he does not report on the cost of collection by the payer. Since this number is an aggregate in all non-mixtures, it makes it difficult to recognize what causes the increase or decrease in costs that result in this cumulative number. Most organizations agree that there is less cost to processing a Medicare application than a self-pay claim, for a variety of reasons, but how can they recognize that collection costs can increase due to complex non-contract contracts or more tools needed to manage a contract (contract management software, additional staff, etc.) of the cumulative number? Without the ability to calculate the cost of collecting the payer, making informed decisions becomes more difficult. Considering the cost of collecting the financial class, we can notice a trend - identifying rising costs in a particular area. For example, if we set the value of excellence to collect numbers for a financial class commercial payer, and then notice that it began to grow, we can now expand to find out what led to its growth. We can determine that a certain commercial payer has added additional administrative tasks to his contract (more hoops to jump over), thus increasing our costs in this particular financial class. This question can now be considered at the time of contract negotiations. We can see that the cost of collecting in certain financial classes is high and can be more cost-effective through outsourcing. Using KPI and benchmarks for all financial classes, as well as being able to go deeper when necessary, we can improve the income cycle by making more informed decisions and recognizing problems / trends in the early stages. Benchmarking can be a valuable tool.

However, when it comes to the costs of collecting benchmarking, standardizing what is in the number can mask real problems. Some organizations may include only the costs of their business office, while others may include items such as technology costs, overhead, etc. If organizations are not required to report data in the same way, this total cost of collecting interest can become less effective for benchmarking purposes. When we prepare our income taxes, the IRS clearly defines what needs to be reported as income and what is not, so everyone could use the industry standard on this issue. To solve this problem there really should be an industry standard. Along with the ability to determine the costs for collection by financial class, it is also necessary to determine that as the age of claims increases, the costs of collecting them also increase. Having benchmarks that determine financial class costs and age requirements, we can now make more effective decisions regarding resources such as staffing, additional process changes, etc.

Collection rates

Organizations can recognize collection problems by looking at indicators such as total A / R days, the percentage of bad debts, A / R days more than 90, etc. However, considering both gross and net collection rates by the payer, you can set KPI by financial class. By installing them, and then using other KPIs, such as collection costs, more effective decisions can be made to improve the revenue cycle. Having the opportunity to tell in detail about the details of the data, along with the presence of a KPI payer (as many consider it necessary), we can quickly answer questions such as: my total cost of collection rises due to my payer, changes in the industry, added resources? Does this cost increase to collect a negative or positive factor? My collection cost may be higher than my peers, but my collection rate may also be higher; thus, justifying this higher than usual cost to collect my organization may also have lower than average costs, which may indicate a positive factor. However, this may also indicate a negative factor if other KPIs are not where they should be. An organization can also do an excellent job in a particular financial classroom. However, they may not do so economically. Just looking at the KPI in the aggregate, we can not answer many of these questions.

EFFICIENTLY USING CLUTCHING AND KEY PERFORMANCE INDICATORS OF WORK

The days of focusing on just a few key performance indicators of the revenue cycle disappear quickly. Using financial performance KPIs that fit the financial class, and comparing the results with both our peers and advanced standards, we have another tool to determine how to improve operating profit. The goal of any healthcare organization is to receive the most accurate and fast money for all services provided, at least as far as possible. However, in today's ever-changing environment, reimbursing health care costs is not such an easy task.

Author: Robert L. Wambolt, Health / Management Consultant