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Hospital Data Mining Hits Paydirt

Karen Minich-Pourshadi, for HealthLeaders Media, November 29, 2010

Most CFOs know that they and their teams are more than likely missing a few million due to  revenue leaks each year, but determining where to put the plug is a hit or miss process unless you have the necessary data to pinpoint the problem—such was the case at MultiCare. Their steady growth, while positive, was also opening the system up to more opportunities for revenue leaks.

“We were using another tool that was rules-based,” explains Adams. “And it would dump our paid claims into the system and then look at our potential lost charges. So we thought we were doing a pretty good job of tracking this type of problem.”

Still, Multicare wanted to begin to do some predictive analytics modeling, so in early 2010 they decided to invest in a technology by Apollo Data Technologies, a Chicago-based company. Adams explains that the software helped detect anomalies and trends in patient, billing, and clinical data. This data began to show areas where MultiCare was losing revenue as well as ways they could improve their financial performance, and prioritize resources.

The program utilized a similar approach to how retail businesses track their customers charge habits, Adams explains. The program uses advanced statistics to flag errant accounts and claims with a greater degree of accuracy.

“At first I didn’t think we’d find anything [in lost revenue due to charge capture]. We went live in June and three months later we had already realized $1 million in missed charges.”

The analytics uncovered was that nearly 1% of their $1.6 billion annual net revenue was leaking out of their bottom line without anyone realizing it. With the software in place, in less than three months they were able to identify over $1 million in missed charges and by the end of the year they anticipate capturing over $2 million.

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