Hospitals are Investing in Financial Decision Support ToolsAs healthcare continues to move toward data-driven decision-making on all fronts, hospital operations and business processes are no exception to this trend.
Hospitals are Investing in Financial Decision Support Tools
As healthcare continues to move toward data-driven decision-making on all fronts, hospital operations and business processes are no exception to this trend.
The industry is shifting to value-based payments and episode-based payments, and hospitals and health systems are required to look at their overall spending and costs associated with rendering various services more closely than ever before. However, cost accounting is not a straightforward process when it comes to providing clinical services because of the involvement of a variety of stakeholders, departments, clinical staff, technologies, supplies, etc.
Using data from throughout the hospital
Hospitals are now investing in financial decision support tools that can provide insight into the patient-level cost of providing various services. Financial decision support systems aggregate data from multiple clinical and operational systems such as supply chain management, workforce management, financial, and electronic health records. These systems combine this data to create and analyze information that can be represented in various visual and graphical ways.
Core areas being assessed
Most healthcare financial decision support applications on the market focus on the following core areas:
Cost Accounting to assess the costs associated with delivering a specific service or performing a specific procedure.
Budgeting to support retrospective budgeting, as well as to forecast and model budget data. The ability to correlate budget with service volumes is particularly important in the healthcare environment.
Physician Analysis to track volume and cost trends associated with physicians who are caring for patients within a health organization.
Marketing Analysis to analyze trends in patient and physician demographics to better understand the population being served by a health organization.
Clinical Analysis to measure, trend, and analyze clinical outcomes to determine the cost of care provided.
Contract Modeling and Management to model various contract scenarios and manage contracts, including calculating expected payments, comparing multiple contracts, and managing expirations and renewals.
Most financial decision support solutions also feature key performance indicators (KPIs) and executive-level dashboards among the primary components.
Below are the few vendors in the market providing financial decision support solutions:
- Allscripts Healthcare Solutions Inc. (EPSi)
- Change Healthcare
- Kaufman, Hall & Associates, LLC
- Strata Decision Technology
- Truven Health Analytics LLC, an IBM Company
Covering the bases
Before embarking on a financial decision support system project, consideration of the following issues is recommended:
Executive-level buy-in: Properly educating these users is critical to the success of a financial decision support project.
Data conversion: Converting data from the old to the new system is a significant phase of the project.
Integration: All components of the vendor’s product should be fully integrated to achieve seamless exchange of data from one module to the next.
Third-party interfaces: Vendors should be required to prove claims of successfully interfacing with third-party applications, such as general ledger.
Input from a variety of stakeholders
An important step in the selection process is establishing consensus among the stakeholders (e.g., CFO, CIO, director of finance). Perspective from multiple levels within the organization is critical in making a good choice. Therefore, the project selection committee should be composed of players representing departments that will be significantly impacted by the purchase – directors, managers, and system administrators from finance, cost accounting, budgeting, reimbursement, and IT.
Evaluate your healthcare contract management program with these KPIs.How can you measure your healthcare organization’s contract management performance? Contracts directly impact revenue and prevent...
More than 2 million children living in the U.S. have rare or complex illnesses requiring specialized medical care that is available only at a limited number of pediatric healthcare organizations....
The COVID-19 pandemic has created the greatest financial crisis in history for healthcare organizations. A report from the American Hospital Association (AHA) estimates a total impact of...
Top 10 Negotiating Strategies
Skilled negotiators are like musical virtuosos. They have an extensive repertoire of tactics from which to draw, and they know when and how to make them a part of their performance. But negotiating healthcare contracts for capital, purchased services, and IT services can test the artistry of even the most masterful negotiator.