Today’s health care has more initiatives and directives than ever before, thus it’s easy to get lost in the weeds of change and process. A recent survey of CFO’s again confirmed the importance of securing the hospital’s net revenue stream moving forward.

An article last week in a leading health care online newsletter explained why the transition to value from fee-for-service will take several more years. The study of eighty hospitals looked at Alternative Payment Models (APM’s) now in-play as well as ongoing traditional FFS reimbursement. Several experts in data analytics concluded ” the majority of healthcare dollars are still fee-for-service. The needle isn’t moving as fast as they are claiming.”

Furthermore, one industry expert said the results of the study “could be misleading if the data is not studied carefully.” He concluded that “the financial impact so far is likely measured in the low single digits, while the report appears to make it much larger.”

This is not to suggest providers ignore the opportunity to explore risk-based reimbursement, but it does debunk the hype that makes it appear as if 30% of all provider reimbursement is currently tied to value. The reality is that maintaining and increasing your hospital’s FFS reimbursement is vital to the hospital’s financial well being now and for several years to come.

The charge master is not “dead” or inconsequential.

Using predictive pricing analytics to reduce contractual allowances strategically without forfeiting net revenue may be a goal. Increasing net dollars by designated service line or where brand is strong often is a need. And, positioning the hospital more favorably in its market will produce more sustainable growth.

A straight-across-the-board rate increase may be an easy charge master adjustment, but it will only inflate contractual allowances and make the charge master even less rational, effective, and efficient.

It only takes us a week to complete a detailed analysis of patient charge and payer data, and a market assessment of competitor hospitals. Plus, our algorithm’s predictive pricing capability will enable you to model any number of different pricing scenarios based on your hospital’s unique needs and goals.

Take the guesswork out of generating a top line number for the new fiscal budget by putting the power of predictive pricing analytics to work.

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Source: Health Leader’s Media, “More Dollars Moving to Alternative Payment Models, But Still Modest”, November 6, 2017