Using Data Analytics for Better Financial Outcomes
Cleveland-based MetroHealth, a 490-staffed-bed health system with $680 million in annual net patient revenue, also uses data analytics to enhance the revenue cycle. The system developed a tool to identify collections patterns and trends in order to predict what the revenue cycle totals will be at the end of every month.
"We don't want to get to month's end and all of a sudden it's a shock to us, so we developed a tool to focus on revenue projections based on the charges that post on a day-to-day basis for items such as contractual and charity adjustments," says Craig Richmond, MetroHealth's associate CFO.
"This allows us to do a deep dive to see if adjustments are accurate. It could have an impact on month-end results if something is not identified and resolved. We are using data analytics as a proactive measure in order to make sure that things are posted in the system correctly. Wherever you can use data analytics and business intelligence tools to assist you in your operations, it is critical," he adds.
Additionally, MetroHealth has developed what it calls its daily projection flash report, which is distributed to stakeholders on the clinical, operational, and financial sides of the business, Richmond says.
"It's a summary-level document that takes the current activity to date and uses it to project month-end revenue and volumes. It allows us to look at hospital revenue and professional services revenue so we know what our actual numbers are compared to the budget, and we can see where we have a variance. This is another tool that allows us to start evaluating where we might have a potential concern."
While Richmond does have specific details on how much these analytics tools are improving the revenue cycle, he says the big gain is in the health system's ability to be aware of collection trends and to research any outliers in real time, rather than in hindsight.
"Instead of doing things in a retrospective way where we close the books and take a look at where we fell, the tools we've put in place let us manage the revenue cycle as we are moving through the month. We can be proactive, rather than reactive," he says.
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