A Financial Success Strategy For Healthcare Cost Management

Many people don’t realize the far-reaching effects of the Affordable Care Act. When this law was passed in March 2010, healthcare shifted from a fee-for-service model to a value-based care model, placing a new emphasis on healthcare cost management. Doctors are now looking to provide better care at a lower cost. However, doing so can be challenging, and some challenges are more prevalent than others.

Challenges Related to Healthcare Cost Management

Healthcare organizations wish to find ways to save money and pass these savings on to their patients. They may learn more about Comp Health and its services to see if they will benefit them. This agency and others can help healthcare organizations fill gaps in their staffing to ensure patient care is not compromised due to a lack of qualified professionals. However, other challenges must be addressed.

One way to reduce healthcare costs is to address compensated care. This issue needs to be resolved before an organization can bring costs down. An organization must also determine how to handle any bill-hold accounts that are still outstanding. Accounts receivable must be reduced, and organizations must manage discharged but not final bill cases.

Many organizations have high labor and technology costs. Resources are not used efficiently, and supply waste remains a concern. These costs are passed on to patients. Healthcare organizations must determine the true cost of care to find ways to save.

Data-Driven Decisions in Healthcare Cost Management

One way to find areas where improvements can be made is to turn to technology. Data-driven tools provide information about the actual cost of healthcare today. They also help healthcare organizations determine what drives these expenses, why there are variations in certain areas, and how unpaid bills impact an organization. When a healthcare practice has this information, it can find places where financial practices can be improved and money can be saved without sacrificing care quality.

Transforming Healthcare Finances

Practices can take steps today to reduce costs. They can use cost-per-case improvements to see quick wins, which help bring all employees on board with the cost reduction strategies. Starting on a per-case basis gives an organization a better chance of achieving long-term success.

Artificial intelligence can help resolve uncompensated care. When organizations collect unpaid balances, they can reduce costs. An organization may use a propensity-to-pay tool to target these accounts, using artificial intelligence to leverage data and determine which patients will most likely pay. The organization can then focus on collecting from these patients while connecting those unable to pay with charity care or government assistance.

Data and analytics can also increase an organization’s cash flow. The American College of Healthcare Executives conducted a survey in 2018, which found that financial challenges remain the most significant issue in hospitals today. Healthcare leaders are tasked with increasing revenue by improving their organizations’ economic performance. They can use data and analytics to find areas where improvements can be made and processes can be altered for cost savings.

Healthcare organizations must find ways to reduce supply chain inefficiencies while minimizing care variations. Labor must be better managed, and technology must be fully utilized to see improvements.

Activity-based costing allows organizations to deliver care cost-effectively. When organizations know the true cost of care, they can determine which populations are most at risk and intervene. Healthcare organizations that use activity-based costing see improvements in other healthcare cost management.

Healthcare costs must be brought under control. Finding ways to achieve this goal isn’t easy, but organizations must continue working to do so. Navigating these challenges becomes easier when they understand cost drivers and their relationship to care quality. When these are understood, an organization’s bottom line and patient care will improve simultaneously.