REVENUE BENCHMARKING IS COMING TO HOSPITAL COUNCIL
FOUR REASONS YOU NEED IT NOW!
With the many changes brought on by HealthCare Reform, hospitals are understandably concerned about their bottom line. Budgets are under constant scrutiny, and hospitals are carefully monitoring their clinical performance and patient satisfaction scores. Much attention has been placed on redesigning care processes to improve quality and safety, and to coordinate care across the continuum. All of this is important for excellent patient care and long term financial viability, but cost cutting and clinical performance improvement can only go so far. Hospitals must also take control of the revenue side of the equation.
In order to optimize revenue, hospitals need to have multi-year goals by service line and contract. The best way to identify and quantify these opportunities, and to set targets, is to start with current reliable data, which includes detailed market reimbursement information. Furthermore, as market conditions shift and internal resource utilization changes, hospitals needs to continue to rely on this data to update their plans and stay on track with long term goals. Market reimbursement data, by service line and payer, is now available to Hospital Council members.
Over forty hospitals in the Los Angeles area have been using the PDS revenue benchmarking software offered by the Hospital Association of Southern California to add hundreds of thousands and even millions to their bottom line. Among the ways hospitals use the data to enhance revenue are:
1. Prepare for managed care contract negotiations by using the same data payers have: Payers begin contract negotiations armed with mountains of data. With their staff of analysts and access to COBs, they know how much every hospital received from every major payer, for most of the services they offer. Armed with the paid claims data submitted by participating hospitals, PDS users know which are their best performing contracts and service lines, and where there are opportunities for revenue growth. Want to know how your Blue Cross contract for your mix of patients compares to your peers? PDS can tell you. Want to know whether your Orthopedics Center of Excellence is paid as well as hospitals who offer similar services? PDS can tell you.
2. Forecast revenue for new service lines using actual data, not anecdotal evidence: Mistakes are costly, and in this era of declining reimbursement, hospitals can’t afford to make significant investment decisions without the best data available. Before opening or expanding a service line, hospitals can’t afford to just look at charges and make a guess as to what the revenue would be. Hospitals need to know how much their peers are actually being paid. PDS provides this market reimbursement data by service line.
3. Optimize revenue, regardless of market clout: Hospitals at the top probably want to stay there, but they also want to be sure they aren’t pricing their services so high that they are excluded from narrow networks. Conversely, if a smaller hospital’s strategy is to bring in more volume by slightly undercutting the competition, they need to be sure they haven’t set their rates so low that they are giving up more revenue than they need to. Whether a hospital is the market leader, or the small community provider with limited market clout, every organization has something unique to offer. Hospitals need to know which mix of patients and which rate structure will enable them to use their strengths to optimize revenue. PDS data helps hospitals find those opportunities.
4. Stay on track with long term revenue plans: As hospitals set targets for inpatient vs. outpatient revenue, or revenue by different service lines, or for government vs. commercial revenue, they need to know how the market is shifting. And, as care processes change, leadership needs to understand how that affects the mix of patients and the revenue they will generate. Decision makers need detailed and trended market data, combined with internal performance data, in order to set realistic and achievable targets. Then, as internal and external conditions continue to change, they need to know how their market position is changing so they can make the modifications necessary to stay on track. PDS provides that trended market information.
To learn more about the HASC’s PDS revenue benchmarking service which is now available to Hospital Council members, please do one or more of the following:
1) Attend a 45 minute PDS webinar
o 8/24 at 4 pm https://www2.gotomeeting.com/register/856028251
o 9/1 at 10 am https://www2.gotomeeting.com/register/153597258
o 9/6 at noon https://www2.gotomeeting.com/register/111371075
2) Attend the PDS meeting at the start of the Hospital Council Summit on Thursday September 15th at 4:15 pm. Room location TBD
3) Visit the PDS website at www.pds-data.com
4) Contact Leslie Gold at or 213.283.8003