"This gives the hospital a look back on what is driving their costs, what the trends are, and what the current situation is," he says. "The second component of this is it offers a look forward, and that's how you mitigate risk. This allows for proactive planning and medical management of the clients."
This predictive modeling insight can help determine which care management program is best for clients, which may need to grow, and the location of possible cost savings.
Once FSAI has all this information, they take it a step further; they interpret the results by identifying, analyzing, and predicting the healthcare risks. But what makes this interchange so important isn't just the data they capture, it's the predictive modeling that follows; this can offer CFOs insights on where to attack costs next or, more importantly, where to grow.
Predictive modeling is the type of tool that can offer financial leaders some peace of mind in making hard decisions as to where to concentrate your spending on—especially in an uncertain economy.
"By using this type of tool, [financial leaders] can look at opportunities for improvement, overall costs, and you can even stratify the information by subgroup," explains Kathleen Sullivan, R.D., FSAI executive vice president of business solutions.
"They can pull out the most at-risk patients and, with 30% accuracy; they can pick out the folks that will be back in the hospital within next six months. So you can go in and grab those people for clinical outreach," she says.
Catching patients in the early stages, helps reduce trips to the ER—always a big money saver for hospitals, but more importantly it's a lifesaver for patients. Predictive modeling is the proverbial crystal ball on what ailments to anticipate in your patient base in the future. It can't quite pinpoint which patients will fall pray to illness in the next year with 100% accuracy, but it can catch some early warning patterns early on. That allows your staff to get those patients the treatment they need before an illness becomes a costly visit to the ER.
It doesn't take a fortune teller to tell you the future has arrived and predictive modeling has a multitude of positive financial and patient-related applications.
Note: You can sign up to receive HealthLeaders Media Finance, a free weekly e-newsletter that reports on the top finance issues facing healthcare leaders.