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There are many reasons for small practices to use complex finance reporting technologies to analyze data. Here are a few.
Large hospitals and health systems have the ability to spend millions of dollars each year gathering, analyzing, and organizing data to reduce financial waste and increase profits. They have access to sophisticated analytical technologies that have been traditionally unavailable to small, independent practices. Private practices have been relegated to using less-expensive, less-effective reporting platforms that require hours of manual analysis and compilation.
Without a clear financial view, physicians lack the ability to make informed, real-time decisions that can benefit their practices. This highlights how access to comprehensive financial reporting can unlock hidden revenue, eliminate billing leaks, and inform nearly every business decision for an independent practice.
Defining the problem
Lack of expertise
Physicians undoubtedly know what's best for their patients; however, in medical school they don't learn what is best for their practice's finances. In fact, many doctors admit they don't measure key metrics critical to revenue cycle management. For example, in a recent survey from AdvancedMD, 50 percent of physicians reported they do not use benchmarking to compare their financial performance to that of their peers. Then how do they make decisions without data? That's right: many simply go by the "gut" instinct.
Additionally, the level of expertise and knowledge required to compile financial snapshots often surpasses that of the average front office or billing staff. The picture these manual reports paint can be incomplete at best, inaccurate at worst.
Unlike a large hospital, the small medical office does not have the luxury of a team of database experts and financial analysts trained to drill away at complicated data reports. Rather, in an environment where everyone is required to wear many hats, the heavy burden of financial reporting often falls to the office managers or the physicians themselves. Even if a practice does have a financial reporting mechanism in place, hours of staff and physician time are spent each month to compile patient and financial data manually. Untimely reports cannot inform a practice's long-term financial success.
No access to sophisticated technology
It is not that private practices lack data; they have droves of it. But rarely does a private practice have the level of sophistication or the technological tools to extract and organize existing data in a meaningful way, and do so quickly.
Defining the solution
Recent innovations in data analysis and reporting technology have provided private practices with hospital-grade technologies at a fraction of the cost. Powerful reporting tools can ensure an independent practice not only survives but thrives during challenging economic times. Comprehensive, accurate reporting can deliver the high-value information needed to identify financial problems, pinpoint solutions, discover new financial opportunities, and lead the way towards profitable change.
What do these reporting tools include?
A 360-degree view: A comprehensive financial reporting solution needs to offer a 360-degree view of a practice's financial health. Everything that impacts the revenue cycle matters: staff productivity, volume of products and services sold, insurance payments and denials, collection performance, and the payer mix.
Speed: Producing financial reports should be as easy and quickly as a few clicks. What used to take hours can be done in minutes automatically. Immediate insights help physicians make decisions in real-time, which can translate to a quick lift to the bottom line. For example, if a practice has several locations and the data reports that one of them is underperforming, it is important to identify causes and make changes swiftly to remedy the situation.
Robust reporting options: In an ideal scenario, metrics can be instantly reported for the entire practice, one or multiple locations, one or several physicians and their charges, payments and adjustments. Practices need to know if a particular carrier is underpaying for a particular code, to compare performance for each physician or location in a multi-physician practice, and to see after which month collections drop off.
Customization: Administrators should be able to customize and save reports with preferred data and format them for an even more in-depth look at the practice's financial health. A customizable way of searching the data allows the administrator to pull in data fields as he needs them, slice and dice date periods, and drill down to individual CPT codes or diagnosis codes.
Cloud: For practices with multiple locations or remote workers (such as billing and practice management staff), a single cloud solution for medical billing, scheduling, and revenue cycle management will eliminate the hidden costs of client-server software ownership, while improving the way they practice medicine. By charting this information in a cloud-based system, users have the ability to refer to charts and information from a secure, single sign-on. When patient information is stored in a secure site that can be accessed via the internet, it creates interoperability among a wide range of systems. Cloud-based services give back-office staff the needed flexibility to review charts or renew prescriptions any time from a laptop or mobile device.
No special training required: Today, practices finally have access to reporting technologies that are easy to implement and use and are accessible to a variety of skill levels. All a user needs to know is the reporting fields they are after and the rest is automatic. No technology knowledge is needed. A quick-to-learn, easy-to-use interface allows both administrators and physicians alike to run reports on their own.
Reaping the Benefits
Having financial insights in real time allows practices to measure the value of organizational changes, such as comparing the historic performance of in-house billing to partnering with a third-party billing service; identifying profitable opportunities or financial leaks; and making timely changes to improve outcomes.
Comprehensive financial reporting enables physicians to compare their financial performance to that of their peers. The top 25 percent of earners make up to $50,000 more annually than average-earning physicians. The survey referenced earlier found that many of these top earners cited financial reporting as a key to increased profits. Peer benchmarking can uncover where a practice is leaving money on the table and identify potential areas of growth.
Leveling the playing field with payers
Accurate financial data allows small practices to negotiate payer agreements as if they had the resources of a large hospital. They can find their ideal payer mix with a closer look at payment turnaround times and collection information.
Growing the practice
Patients: Reporting involves more than just dollar amounts. The data held in a practice management platform can be leveraged to grow a patient population. A key to optimizing marketing efforts, current patient data can be extracted to target specific geographical areas or patient populations through direct mailings and other media channels.
Physicians: Moreover, current patient information can help determine if your practice is ready to hire on another physician. Such reports as most used CPT codes, appointment types, and average time spent with a patient can help identify which areas of the practice need additional provider support.
To sum it up
Hospitals have long benefited from sophisticated analytic technologies, something that, until recently, has been unavailable to most small medical offices. Recent healthcare information technology innovations are finally leveling the playing field by delivering meaningful data instantly to a private practice.
With the ability to wield accurate, real-time data, physician practices and physician groups can identify opportunities for financial growth, eliminate drains to the bottom line, and improve patient care thanks to increased administrative efficiency.
Matt Barron is the Senior Director of Product Management at AdvancedMD