Understanding Benchmarking for Healthcare Organizations

Transcription

1 Understanding Benchmarking for Healthcare Organizations

2 Melissa M. Meeker, CPA MSA, Accounting, Franklin University Tina R. Wright, CPA, CHBC BSBA, Accounting, The Ohio State University

3 Benchmarking Basics What Why How

4 Benchmarking Basics What

5 Benchmarking 101 Two Types of Benchmarking Internal External Components/Areas of Focus Financial Performance Product Strategic

6 Internal Benchmarking Industry data not readily available Established and proven best practices within the organization Caution in maintaining an unbiased opinion Sources: PM System P&L Balance Sheet

7 External Benchmarking Two methods Evaluation against peers Comparison across different industries Sources MGMA NSCHBC CMS Association data

8 Financial Benchmarking Common metrics Gross, operating and net margins Receivables and payables Revenue and cost per employee Compensation data

9 Performance Benchmarking Patients Supplies Billing coding

10 Product Benchmarking Ophthalmology Dermatology Podiatry

11 Strategic Benchmarking Revenue Growth Profitability Product line breakdown and growth Productivity Functional role Operating cost

12 Benchmarking Basics Why

13 Why Benchmark? Set standards Identify trends Strategic Planning Prepare for public and regulatory requirements. Meet accreditation requirements, if applicable. Culture setting

14 Why Benchmark? Physician Meetings NP or Mid level Meetings Staff or Team Meetings

15 Benchmarking Basics How

16 The 5 C s of Benchmarking 1. Collect data to determine current status 2. Compare, analyze and identify opportunities or pain points 3. Collaborate to improve areas of focus 4. Change Implementation 5. Continue to re evaluate after changes have been executed

17 Step 1 Collect data to determine current status Operational Total Cases Performed Delays Patient wait time Physician time tracking Cancellations/no shows Billing delays Chart deficiencies Financial Gross billings/charges Net revenue/collection % A/R days and aging Costs per patient Payer mix

18 Step 2 Compare, analyze and identify opportunities Exercise caution in Comparisons Even modest differences can indicate areas for improvement

19 Step 3 Collaborate to Improve INVOLVE THE TEAM Get Buy in Brainstorming Mind Mapping Pros and Cons What if Analysis

20 Step 4 Change Implementation Issue Patient Wait Time High Self Pay Balances High Cancellations / No Show Change Increase patient appointment blocks or change appointment combinations Implement up Front Collections Cancellation fees or reminder calls and confirmations

21 Step 5 Continue to re evaluate after changes have been executed Benchmarking is not a 1 and done process Continue to track trends and incorporate benchmarks in your monthly financial and operational meetings Goals Increase productivity, revenue, efficiency Decrease costs and overhead Increase quality

22 What you measure will drive behavior

23 Examples of Standard Benchmarks for a Medical Practice

24 Charge Comparison Dollars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20XX $666,734 $603,806 $617,831 $690,577 $736,977 $488,644 $814,432 $488,831 $601,555 $629,072 $621,295 $482,940 20XX $604,455 $603,008 $653,341 $603,274 $661,578 $565,031 $622,748 $668,024 $496,609 $706,055 $600,210 $565,499 20XX $562,031 $539,940 $649,577 $558,974 $536,422 $550,248 $460,111 $557,375 $578,128 $554,734 $560,057 $564,798 Charges Use MGMA data Track total charges by month Look at like periods (YTD analysis) Keep in mind when charge master increases occur Goal consistent upward trend

25 Collection % = Total Payments Total Charge YTD 20XX YTD 20XX YTD 20XX Jan - Dec Jan - Dec Jan - Dec Charges $613,036 $666, ,455 Payments $282,786 $353, ,129 Collection Rate 46% 53% 55%

26 AR Benchmarking Days in AR = Total AR (Less Bad Debt) Average Daily Charges Average Daily Charges= 12Months of Total Charges AR Days Days Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20xx xx xx

27 Percentage of AR over 120 Days = AR over 120 Total AR AR Distribution by Days 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Current & Above Current AR Benckmark

28 Payer Mix Medicare Medicaid Commercial Workers Comp Self Pay Other Calculate percentage of gross charges

29 Payer Contracts Consolidate all fee schedules to one Excel spreadsheet Set an appropriate charge master Be sure no dollars are left on the table

30 180 New Patient Comparison Patients Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 20XX XX XX

31 Overhead Percentage Operating Cost as a % of Revenue = Total Operating Cost Total Medical Revenue Practice Benchmark Variance % (Variance / Benchmark) Total Operating Cost as a % of Total Medical Revenue 65% 55% 10% 18.18% Total Operating Cost $300,000 $305,000 ($5,000) 1.64% Total Medical Revenue $500,000 $575,000 ($75,000) 13.04%

32 Patient satisfaction surveys, Wait times, Co pays, Lag time, CPT comparison, Revenue per contact hour, Encounters per hour, Physician compensation, Testing verification data, etc.

33 Next Level Benchmarks Insurance Aging By Payer Payer Total Private Pay $4,825 $8,963 $6,207 $8,552 $20,479 $49,026 MEDICAID $1,955 $185 $600 $600 $11,564 $14,905 Caresource $15,540 $1,320 $278 $465 $6,425 $24,028 Medicaid Secondary $306 $835 $493 $363 $4,468 $6,464 Anthem $27,664 $5,335 $284 $295 $2,768 $36,346 AARP/SECURE HORIZONS $0 $0 $0 $0 $1,845 $1,845 Medicare Secondary $0 $45 $525 $850 $1,811 $3,231 Aetna $6,576 $925 $0 $0 $1,450 $8,951

34 Next Level Benchmarks Established Patient Comparison 100.0% 80.0% 60.0% Percentage 40.0% 20.0% 0.0% 20.0% May % 0.5% 5.5% 91.8% 2.2% YTD 2015 Jan May 0.0% 0.2% 11.1% 85.1% 4.0% YTD 2014 Jan May 0.0% 0.0% 12.2% 86.1% 1.7% *Medicare 1.2% 9.3% 52.9% 32.6% 4.0%

35 Next Level Benchmarks Referring Physicians New Patients by Referring Physician All to Date 20XX 20XX 20XX Monthly Average Monthly Average Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total s Varianc e From 20XX Dr. Evil Dr. Strange Doc McStuffins Gregory House MD Dr. Quin Medicine Woman Dr. Dolittle

36 Next Level Benchmarks Encounter Analysis Jan - Mar Annualized Jan - Dec Jan - Dec Office Patients Other Office Patients Hospital Patients Nursing Home Patients Surgical Patients Total Encounters

37 Thank You! Melissa M. Meeker, CPA Tina R. Wright, CPA, CHBC