According to the health care consulting firm Surgical Directions, COVID-19 robbed the U.S. health system of an estimated $7.8 to $11.6 billion in revenue just over the span of four weeks due to the suspension of elective procedures. Recouping this lost revenue will require HCOs to adopt viable and sustainable cost management processes.
Data Analytics Can Help HCOs Make Long-Term Financial Decisions in an Uncertain Time
With more than 20 states reopening their economies while facing a worrisome increase in coronavirus cases, the health care industry in the United States must find an equilibrium between rising COVID-19 hospitalizations and revenue lost in other areas during restricted operations.
The industry lost an estimated $7.8-11.6 billion in just four weeks due to suspension of elective procedures alone, so demand capacity management will be critical in keeping hospitals viable in the coming months and years.
According to Becker’s Hospital Review, emergency department volumes have dropped between 40 to 70% across the U.S. because patients are delaying even urgent care due to coronavirus fears. But both patients and health care providers are embracing telemedicine, and surgeries increasingly are being performed at ambulatory surgery centers, both to lower costs and to reduce the risk of infection.
How can health care providers achieve sustainable disease suppression and manage costs effectively at the same time? From examining fixed costs to optimizing staff, here are some ways that HCOs can leverage data analytics to help them make the best decisions for their future, and improve patient throughput and quality of care.
Examining Fixed Costs
Recapturing delayed and lost revenue should involve changing operations, and examining fixed costs and reducing them. This may mean closing or consolidating some units. According to one report, HCOs would need to reduce costs by between $130 million to $1 billion to maintain a 4% profit margin, depending on the HCO’s size.
Optimizing Staffing
By far the largest variable cost for hospitals is professional salaries, representing an average of 75% of emergency medicine group costs. Yet based on historical trends, demand capacity planning during the pandemic remains unpredictable. d2i’s clients have adopted rapid cycle reviews using daily EHR data integrated with billing and scheduling data to adjust staff schedules weekly.
One medical director shared his experience in the early days of the pandemic with d2i. He said his organization was hemorrhaging money, seeing fewer than 1.5 patients per hour. But by using daily data, evaluating weekly moving averages for arrivals, and working with providers on scheduling flexibility, his organization is now operating at or above targets for the number of patients seen per hour.
Even though ED volumes remain volatile, HCO leaders can assess patient demand versus the number of beds available to optimize staffing. One way to manage capacity is to reassign staff from temporarily closed units or units with reduced volumes to open positions within the hospital, such as in the ICU. Not only does this practice better align staffing with changing needs, but it can reduce overtime costs for staff in shorthanded units. These decisions don’t have to be set in stone. HCOs can temporarily close and open the units based on current patient volume.
Monitoring Patient Payments
Optimizing patients’ financial experiences also optimizes financial performance. This includes engaging more robust digital tools to perform contactless patient financial transactions, while offering more than one payment option, especially for high out-of-pocket costs. The outdated revenue cycle systems many HCOs are stuck with don’t offer any insight into the performance of their patient-pay portfolios. Employing end-to-end patient payment analytics can produce actionable insights to streamline this critical source of revenue.
If your organization is seeking a comprehensive solution to Revenue Cycle Management, ours is already helping our clients monitor, manage, and improve their revenue cycles. We’re helping your peers identify patterns and actionable insights that are keeping them viable in these uncertain times and setting them up for security in the years to come — by speeding cash flow, reducing denials, and improving payer contracting.
To see exactly how d2i can help put your data to work, contact us for more information, or to request a demo.