“Doing Well to Do Well” – Financial Health Vital Signs

MGMA Data Experience 2013

Objectives

List vital metrics in determining practice financial health.

Identify importance of meaningful analytics to delivering quality health care

Identify action steps to convert metrics into practice improvement.

Traditional Practice Questions

How well is my practice performing financially?

Are we being under paid?

How can we better manage A/R?

How can I score payer performance?

How well are we coding our procedures?

Are we doing better/worse than others?

Why Business Intelligence?

Data driven decision making is the future of healthcare

Decisions are driven by the following criteria:

- Financial Performance - Clinical Quality Measures - Productivity and Performance Benchmarking - Marketing and Referral Analysis - Population Management - Health Risk and Wellness Assessments

Independent clinics in a variety of specialties are financially struggling and having difficulty keeping up with market influences and demand

Clinics need deeper insight to make the best possible decisions

Clinics need technology and information to help drive success

Data Experience Terminology

Key Performance Indicators (KPIs)◦The “indication” and evaluation success

Performance Metric◦The “measure” of activities and performance

Benchmarking◦“Compare” performance and metrics to other strong

performing entities

Thresholds◦A “level” or rate by which performance is negatively or

positively reached and requires attention

Terminology Cont’d

Target◦Proceeding or improving to a “specific” goal

Normalize◦Using calculations to take data from fragmented

elements to data that generates the “norm” or desired value

◦Reduce redundancy and “clean”

Aggregate◦A “whole” produced by several individual elements

Establishing KPIs

Developing KPIs usually follows a process of:1. Determine critical processes

2. Identify specific, quantifiable outputs of data

3. Establish targets against which results can be measured and scored

4. Establish a maintenance plan

Rubik’s Cube Theory

?

Steps to your Data Experience• Determine Critical Processes• Determine Metrics• Data Sources

• Determine Benchmarks• Establish Targets• Determine Thresholds

• Drill Down• Isolate Problem Areas• Determine Corrective Action

• Evaluate Implications (Rubik’s Cube)• Determine Timeframes and Resources• Take Action

• Measure Actions• Determine if Iterations are Needed• Establish Maintenance Plan and Occurrence

Example Critical Processes

Example Critical Processes Cont’d

Example Critical Processes Cont’d

Determine Metrics - Example

Payer MixContracti

ng

Denials

Patient Satisfaction

Lag time

Patient Volume

Days in A/R

Collection Rates

VitalMetrics

Determine Benchmarks - Example

MGMA Benchmark Data

www.mgma.com/benchmarking

MGMA is armed with accurate, up-to-date data on the industry and comparable data on your practice:Physician CompensationProductivityNumber of PatientsStaffingRevenueOperating ExpensesAccounts Receivable

Determine Thresholds - Example

Example Threshold Chart

Financial Good Warning BadDAR 0 to 45 Days 45 to 60 Days > 60 Days

Self Pay 0% to 40% 40% to 60% > 60%Net Collections > 60% 30% to 60% < 30%

Administration Good Warning BadEntry Lag 0 to 3 Days 3 to 6 Days > 6 Days

Denial Rate 0% to 15% 15% to 25% > 25%Hold Lag 0 to 2 Days 2 to 4 Days > 4 Days

Mgr Hold Lag 0 to 6 Days 6 to 20 Days > 20 DaysSatisfaction 5 to 3.5 3.5 to 2.5 2.5 to 1

Do you have the right tools?

Possible Analysis Tools

Practice Management Reporting

EHR Reporting

Clearinghouse Reporting

Data Feeds into Excel

Third Party Reporting

Business Intelligence Platform

“Doing Well to Do Well” – Financial Health Vital Signs

MGMA Data Experience 2013