Financial and Operational Benchmarking Trends & Techniques€¦ · 31/10/2018 · 2018 Capital Link 1 Financial and Operational Benchmarking Trends & Techniques Susan Petrie Chief

2018 Capital Link 1www.caplink.org

Financial and Operational Benchmarking Trends & Techniques

Susan Petrie Chief Operating OfficerOctober 31, 2018


Capital Link - Overview

• Launched in 1995, nonprofit, HRSA national cooperative agreement partner

• Offices in CA, CO, MA, FL, LA, MO, and WV• Over $1.1 billion in financing for over 231 health center capital

projects

• Metrics and analytical toolkits, trainings, and assistance in measuring, evaluating, and implementing performance improvement

• With HRSA support, have created the Capital Link Benchmarking Toolkit: www.caplink.org/resources/publications


Capital Link Benchmarking Toolkit

www.caplink.org/resources/publications

http://www.caplink.org/resources/publications


Capital Link – Data Sources

• Proprietary database that merges financial and operational information for national FQHCs:

• Over 80% of annual FQHC financial audits for 10+ years

• 100% of UDS reports for 10+ years

• With HRSA support, have developed the 2013-2016 National Trends Report www.caplink.org/resources/publications

• HRSA is also supporting an updated 2014-2017 National Trends Report: Expected publication date: early calendar 2019


National Trends Report

www.caplink.org/resources/publications

http://www.caplink.org/resources/publications


Data Included in Charts/Trends

National FQHCs

Data 2014 2015 2016 2017

Financial Audits 1,022 1,112 1,113 977

UDS Data 1,278 1,342 1,320 1,348


Improved Access,

Quality Care, & Financial

Sustainability

Staffing

Productivity

Utilization

Clinical Outcomes

Patient Satisfaction

Financial Operations


Why Metrics Matter

You can’t manage what you don’t know and…You can’t know what you don’t measure

Given context, becomes

Given meaning, becomes

Given insight, becomes


Data

Presenter

Presentation Notes

Building blocks theme: data is the foundation


Data by Itself Is Not Always Helpful

But, using metrics to show the relationship between various pieces of data to reveal trends and/or indicators for deeper analysis provides more useful information.

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRxqFQoTCLfQzuuYicgCFUwWkgod2SsLKw&url=http://www.risk.net/risk-magazine/feature/2395869/kva-banks-wrestle-with-the-cost-of-capital&bvm=bv.103073922,d.aWw&psig=AFQjCNHIikL4lZFInXRamn1kiamadtipsQ&ust=1442961537217036


Performance Benchmarking

WHAT do I want to track?

WHERE do I find the data?

WHICH metrics do I need?

WHO do I compare to?

WHAT does it mean?

Benchmarking/Questions to Ask


Creating Performance Dashboards

Explore your available reporting toolsLook to Excel as a simple tool for charting

performanceTime intensive to set up, then efficient for

routine reporting

Match your reporting objectives to your available data sourcesAnnual data often most reliable:

Audits, UDS, OSHPD, etc.Monthly/quarterly data better support real-time

decision making: PMS systems, interim financials, etc.

Choose your financial and operational metricsLimit what you are tracking (5-10 metrics) Stay consistent with your ratio definitions &

calculations

Identify your target audienceDashboards should be customized Board members vs. executive management vs

clinic managers

Building Performance Dashboards


Patient Access, Service and Patient Mix,

Revenue & Expense Trends


National Patient and Visit Trends

21 23 24 25 26 27

84 88 93 99

106 110

-

20

40

60

80

100

120

2012 2013 2014 2015 2016 2017

Mill

ions

Patient Visits


Patient and Visit Growth: National Median

5%

3% 3%

5% 5%5%

3%

5%

7%

6%

0%

1%

2%

3%

4%

5%

6%

7%

8%

2013 2014 2015 2016 2017

Patient Growth Rate Visit Growth Rate


Services Provided by Health Centers

42

99

258

347314

366

0

50

100

150

200

250

300

350

400

One Two Three Four Five Six or more

Num

ber o

f Hea

lth C

ente

rs


Annual Growth in Visits by Service:National Median

2%4%

5%4%3%

7% 7%6%5%

14%

16%

14%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2014 2015 2016 2017

Medical Dental Mental Health


Number of Patients by Service:National Total

19.2 20.1 21.0 22.3 23.3

4.5 4.9 5.3 5.7 6.21.2 1.3 1.5 1.8 2.12.1 2.2 2.4

2.5 2.6

-

5

10

15

20

25

30

35

40

2013 2014 2015 2016 2017

Mill

ions

Medical Dental Mental Health Substance Use Other Professional Vision Enabling


Patient Mix: National MedianPercentage of Patients by Payer Source

26% 22% 21% 20%

40% 43% 45% 45%

8% 9% 9% 9%

15% 16% 17% 18%

0%10%20%30%40%50%60%70%80%90%

100%

2014 2015 2016 2017

Uninsured Medicaid Medicare Public Insurance Private Insurance


Payer Mix: National MedianPercentage of Collections by Payer

9% 8% 7% 7%

61% 62% 62% 62%

9% 9% 10% 10%11% 11% 13% 13%

0%10%20%30%40%50%60%70%80%90%

100%

2014 2015 2016 2017

Uninsured Medicaid Medicare Public Insurance Private Insurance


Operating Revenue and Expense Growth: National Median

8%

10%

13%11%

9%

13% 13%

10%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2014 2015 2016 2017

Operating Expense Growth Rate Operating Revenue Growth Rate


Financial and Operational Metrics


Financial and Operational MetricsMetric Why This Is Important

1 Operating Margin Measuring stick of your business model; margins typically small but need to be positive

2 Bottom Line Margin Is performance dependent upon large capital grants and/or other sources of non-operating revenue?

3 Personnel-Related Expense Consumes 70-75% of budget; key driver of financial performance

4 Days Net Patient A/R Financial management starts with collecting your money efficiently

5 Days Cash on Hand Is there enough liquidity to keep operations running smoothly?

6 Physician Productivity (visits) Productivity is the basis for revenue generation

7 Mid-Level Productivity (visits) Productivity is the basis for revenue generation

8Dental Provider Productivity (visits)

Productivity is the basis for revenue generation

*Capital Link Performance Benchmarking Toolkit


Financial Health: Important Metrics

• Operating Margin =

Change in Net Operating Assets / Total Operating Revenue

• Personnel-Related Expenses as a % of Total Revenues =

Salaries & Related Expenses + Fringes & Payroll Taxes + Professional/Contracted/Consultant Fees

Total Operating Revenues

• Days Cash on Hand =

Unrestricted Cash(Total Operating Expenses – Depreciation) / 360 days)


Operating Margin

6.8%

9.2%10.1%

9.2%

1.9%

3.7% 4.3%3.6%

-2.2%

-0.2%0.5%

-0.2%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

2014 2015 2016 2017

75th Quartile Median 25th Quartile Benchmark


Bottom Line Margin

9.9%10.9% 11.4%

10.3%

3.3%

5.1% 5.5%4.4%

-0.4%

0.8% 1.3% 0.9%

-2%

0%

2%

4%

6%

8%

10%

12%

2014 2015 2016 2017



Personnel-Related Expensesas a Percent of Operating Revenue

78.1%76.6% 75.4% 76.6%

72.4%70.9% 70.2%

71.8%

65.3% 64.0% 63.2%65.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

2014 2015 2016 2017



Days in Patient Accounts Receivables

65

60 6257

4341 41 39

29 28 29 2725

30

35

40

45

50

55

60

65

70

2014 2015 2016 2017



Days Cash on Hand

91106

115 121

4253

63 67

18 24 28 29

0

20

40

60

80

100

120

140

2014 2015 2016 2017



Provider Productivity – Visits per FTE:National Median

2,817 2,704 2,650 2,575

3,035 2,933 2,859 2,780

2,535 2,443 2,439 2,401

1,927 1,904 1,819 1,762

1,048 946 947 963

0

2,000

4,000

6,000

8,000

10,000

12,000

2014 2015 2016 2017Total Mental Health Visits per Mental Health FTE

Total Dental Visits per Dental FTE

Total Advanced Practice Visits per Advanced Practice FTE

Total Physician Visits per Physician FTE

Total Medical Visits per Medical FTE


Percentage Change in Productivity:2014 to 2017: National Median

-9% -8%

-5%

-9% -8%-10

-9-8-7-6-5-4-3-2-10

Total Medical Visitsper Medical FTE

Total PhysicianVisits per Physician

FTE

Total AdvancedPractice Visits perAdvanced Practice

FTETotal Dental Visits

per Dental FTE

Total MentalHealth Visits per

Mental Health FTE


Additional Critical Operational Metrics in FFS Model


Revenue per Patient and Visit:National Median

$772

$206

$834

$224

$900

$238

$931

$246

$- $100 $200 $300 $400 $500 $600 $700 $800 $900

$1,000

Operating Revenue per Patient Operating Revenue per Patient Visit

2014 2015 2016 2017


Visits Per Patient Per Year

4.3 4.4 4.4 4.5

3.6 3.7 3.7 3.7

3.1 3.1 3.1 3.2

0.00.51.01.52.02.53.03.54.04.55.0

2014 2015 2016 2017

75th Quartile Median 25th Quartile


Evolving Business Models


Transition from FFS to Value-Based Reimbursement


Value Based TransitionTransition from FFS to Value-Based Reimbursement


Fee for Service

• Volume

• Individual Health

• Quality is a concern

• Stand-alone systems can thrive

• Little financial risk

• Manage revenues


Value-Based

• Outcomes

• Population Health

• Quality is financial driver

• Collaboration is essential

• Increased financial risk

• Manage costs


Redesigned Incentives




Metric Why This Is Important

9 Medical Provider Productivity (patients) Becomes more important in transition to team-based care

10 Medical Team Productivity Who are your teams? How do they perform?

11 Cost (Revenue) Per Visit How are your visit costs changing over time?

12 Cost (Revenue) per Patient With the move to PCMH, how are patient costs changing?

13 Medical Support Staff Ratio How strategic is the staffing the medical teams?

14 Non-Clinical Staff Ratio Non-clinical employees are not revenue drivers

*Capital Link Performance Benchmarking Toolkit


Medical Patients per Medical Provider

1,108 1,082

1,054 1,032

933899

876 864

751717 715 699

650 700 750 800 850 900 950

1,000 1,050 1,100 1,150

2014 2015 2016 2017



Medical Patients per Medical Team Member

387370 365 356

319304 299 295

263247 242 241

200220240260280300320340360380400

2014 2015 2016 2017



Cost Per Patient and Visit: National Median

$755

$200

$788

$211

$843

$224

$874

$234

$- $100 $200 $300 $400 $500 $600 $700 $800 $900

$1,000

Operating Expense per Patient Operating Expense per Patient Visit

2014 2015 2016 2017


Medical Support Staff Ratio

2.3 2.3 2.4 2.3

1.9 1.9 1.9 1.9

1.5 1.5 1.5 1.5

0.0

0.5

1.0

1.5

2.0

2.5

2014 2015 2016 2017



Non-Clinical Staff Ratio

43% 42% 42% 41%38% 38% 37% 37%

33% 33% 33% 32%

0%5%

10%15%20%25%30%35%40%45%50%

2014 2015 2016 2017



How Does Your Health Center Compare:Dashboard Sample


Capital Link Performance Evaluation Profile






Benchmarking Benefits

Productive Teams

Stable Operations

High Staff and Patient Satisfaction

Quality Outcomes/Access/Depth of Care

Financial Sustainability


Contact

Questions?

Visit us Online: www.caplink.org

• Learn more about our products and services• Download our free publications and resources• Register for upcoming webinars• Sign up for our e-newsletter, Capital Ink• Subscribe to our blog at capitallinksblog.blogspot.com

Susan PetrieChief Operating [email protected]

Jonathan ChapmanDirector of CHC Advisory [email protected]

http://www.caplink.org/

http://www.capitallinksblog.blogspot.com/

Documents

Financial and Operational Benchmarking Trends & Techniques€¦ · 31/10/2018 · 2018 Capital Link 1 Financial and Operational Benchmarking Trends & Techniques Susan Petrie Chief