Reducing costs without growing top-line net revenue only works for awhile.
It’s not easy to generate new top-line net revenue in an age of higher patient deductibles, skinny insurance plans, reduced Medicare payments, and the eventual shift in paradigm to reimbursement based on patient outcomes.
This sea change threatens the traditional brick and mortar construct of health care itself as our industry strives to become more entrepreneurial. Entrepreneurial is good, but it comes with no real safety net.
Which direction leads to the high ground of sustainable viability?
The first absolute is to preserve existing net revenue because otherwise an approaching financial crisis is a certainty. Knowing and serving your patients is more important than ever, but so is having mastery of your data. This starts with drilling-down to service line profitability, brand acceptance and strength, and market positioning, and includes determining the effectiveness of each patient touch point.
Some believe optimum physician alignment is the number one priority; others seek target-rich service lines to grow net revenues; and still others are betting the only sure thing is a merger or acquisition to guarantee fiscal well-being.
Is there a best way to grow top line net revenue?
Generating more net dollars from strong profitable service lines is a must. Using the power of statistics to discern emerging profitable service line growth is a second pathway to increase top-line net dollars.
Improving physician alignment can grow volume which will also produce more net revenue, so this also could be a third target.
Positioning the hospital in its market more favorably will produce more volume (and net revenue) in select service lines, thus this could be a fourth target.
Consumers like choice, but they especially value outstanding service, and this speaks directly to each patient touch point or intersection. That’s why senior executives have invested in training programs to enhance staff awareness of the importance of effective patient engagement. Plus, CMS reduces Medicare reimbursement for those hospitals that grade-out with low patient satisfaction scores.
The smart money says to pursue all top line revenue possibilities and identify areas of “process” that can be optimized to improve efficiency and reduce cost.
It’s never easy, especially when there are so many moving parts (variables). Thus, one immediate need is to understand the relationships among these moving parts and make sense of the data, but is there something even more basic and immediate?
Is the first step in growing more top-line net revenue actually in the charge master?
Yes, how you set charges (list prices) for services still determines a substantial amount of hospital reimbursement. Our PinPoint algorithm uses the power of statistics to uncover sweet targets of opportunity that will grow top line net revenue even when a hospital has as little as 2% charge-based payers.
If you tend to implement an across-the-board rate increase each fiscal year, PinPoint pricing can create a significant new cash stream while enabling you to reduce some service line pricing strategically based on your designated percentage rate increase.
This sets-up more effective and efficient pricing next year as well.
PinPoint is available as a stand-alone product embedded in the hospital charge master. No interface is required, yet you still receive the full power of our algorithm to meet your top-line needs.
Indeed, PinPoint delivers whether you need more top-line net revenue or want to position your hospital strategically by adjusting charges to be more competitive. We’ll help you succeed no matter your financial needs and strategic goals.