Business intelligence may sound “techie,” but it really isn’t. At least financial managers don’t need to concern themselves with the technical end of it – just with the kind of information it provides and how it can be used to improve the organization’s fiscal health. “Business” is the first word of the term, after all.
Those working in the business intelligence field like to tout how these systems give financial managers a window to see how services are performed while giving decision-makers the data they need to implement cost-effective, clinically sound service offerings.
“CFOs, VPs and financial managers need to understand the availability of information,” says Matt Seefeld CEO of Atlanta-based Interpoint Partners. “If data is available at their fingertips, they need to recognize the opportunities. When you look at the data streaming through organizations, they need to sort out the relevancy. Having available data is one thing, but whether it comes over the Web or desktop, it needs to be relevant.”
Seefeld uses accounts receivable and days outstanding levels as an example. If they are high, financial managers can’t wait two weeks for the report in order to determine the reasons, he says – “they need on-demand analytical tools to show why A/R and DSO is going up – such as more denials.”
Brian Day, senior director of Service Line Analytics for Alpharetta, Ga.-based MedAssets, adds that the key to business intelligence is analytics.
“We can provide data at a granular level to show the difference of charges between each physician for the same service, demonstrating the variances in costs per physician,” he said. “The CFO can see that and have something to show to the physicians. This helps ensure cost consistency.”
Getting a firm handle on per-service costs is paramount for keeping service costs even – especially for complex procedures, Day says.
“Cardiac management, orthopedic and spinal surgeries require a huge investment, which means there is a lot to lose,” he said. “They carry a lot of risk and the only solution is to make them consistent. You have to tie cost to the clinical. You have to hit those benchmarks and outcomes in order to get paid appropriately.”
Untying ‘bundles’
One of the foremost financial challenges facing hospitals is the increasing emphasis on Medicare bundled payments for services, notes Darren Schulte, MD, vice president of clinical strategy for San Diego-based Anvita.
“Medicare is looking at reduction in payments for services so hospitals will have to find the most cost-effective way to care for patients,” he said. “Look at all the different parameters like throughput and length of stay. Business intelligence helps you understand what is being done for each patient and each circumstance.”
The bundling effort is part of a broader push toward reducing hospital readmissions. Starting in October 2012, Medicare will not pay for hospital readmissions within 30 days of discharge for patients with congestive heart failure, coronary episodes or pneumonia; hospitals will have to shoulder readmission costs themselves.
“So they need to provide the lowest-cost treatments for these conditions and follow up with these patients after they leave the hospital,” Schulte said. “The business intelligence system should provide decision support so that physicians can understand the most cost-effective test for each patient and the best clinical pathway in order to achieve the best course of care for each case.”
Practice best practices
The information produced by business intelligence systems is also a tremendous benefit for physician practices, says Ladonna Brandon, director of client management for Carmel, Ind.-based Zotec Partners. By retrieving “every piece of data you would ever want” from CPT and ICD-9 diagnosis codes, she says the Zotec system can gauge financial performance by location, physician, modality and claim denial rate.
“We are able to show where payers aren’t paying appropriately,” Brandon said. “We can help them evaluate the value of each practice, their revenues and relative value units – information that allows them to make determinations about their vendors and partners. They can compare forecasting to reality with remarkable accuracy, usually within one percentage point.”
Having concrete data in hand serves as valuable leverage in negotiations with managed care companies over fee amounts and with governmental agencies over the amount of charity care provided.
“We are incentivized to get every last dime for the practice,” Brandon said, “so we take it that extra step.”