Hospital Spend Analytics™
Hospital Spend Analytics™ is a data skill that is growing exponentially and could be a great opportunity for new cost effective approaches for healthcare providers. We will describe some of the top metrics and methods that can be used in analyzing spending data with hospital financial professionals.
Hospital Spend Analytics™ encompasses a vast discipline of analyzing spend and utilization data in different aspects such as pricing, utilization and specific comparisons of hospitals.
There are many different areas that can be analyzed and strategies that can be used to increase the efficiency of healthcare spending. Sometimes healthcare providers have a hard time finding the best strategies to reduce spending without affecting the quality of care and patient experience. With our expertise in hospital analytics we can help you find cost savings while maintaining quality care.
Some Hospital Metrics to use in Analytics Include:
- Utilization metrics: This is an important aspect in analyzing financial data of hospitals, by looking at specific areas of the hospital’s operational budget such as supply costs and staffing costs. The main metric used for this type of analysis is Case Mix Index (CMI).
CMI looks at the difference of patient volume across both acute and long-term care settings in a hospital. It is important to measure how your hospital is performing relative to other hospitals, this allows you to see areas where you can improve efficiency.
- Pricing metrics: This metric can be used for different analyses depending on what type of data you want to analyze. The main metric that is used for pricing metrics include Average Revenue Per Bed (ARPB) and Hospital-Specific Volume Growth Percentile (HSVG). These two metrics are excellent methods for analyzing pricing percentage growth rate as well as comparing pricing performance between hospitals.
- Supply Chain and Purchasing metrics: This includes metrics such as productive hours, labor costs, supply costs and other spend variables. The main metric used in this type of analysis is Productivity Rate (PR).
- Cost-Volume-Profit (CVP) metric: This method can be used to determine the break even points for a specific hospital department. Reimbursement rates can be looked at in relation to the cost of providing care. One major aspect of the CVP model is ensuring that your hospital isn’t charging above market rates for procedures or services that are not necessary.
Some Strategies That you can use for Analyzing Spending Data:
- Reverse Pricing: In this strategy hospitals can determine what are the most profitable procedures. This is done by setting a maximum price per service or procedure. This ensures that you are not overcharging for services that do not provide as much value as other procedures.
- Payer Mix Analysis: Payer mix analysis is used to compare the number of insured patients to uninsured patients against specific payers and underinsured patients against certain types of plans. This allows you to see how much money in revenue goes towards a specific payer type and thus see where your hospital can adjust its pricing strategies and focus more on patients with coverage.
- Payer Analysis: This analysis takes into account all of your reimbursements by payer type and compares it against the total revenue generated for each payer type. The main purpose is to make sure that your hospital is not overcharging one specific payer type.
- Productivity Analysis: Productivity analysis allows you to determine how productive a department is in comparison to other departments within the hospital. This process compares labor cost per case against other departments or even the same department and can be used to track productivity trends over time.
We can Help you in Four Ways to Support Your Hospital Spend Analytics™ Projects.
- Work behind the scenes and provide your team with Hospital Spend Analytics™ so you can utilize for your cost savings initiatives.
- Work with you and your team on spend analytics projects. We will work with your data and present cost savings opportunities that can be immediately achieved. We will provide the cost savings funnel and roadmap for your cost savings goals.
- Provide outsourced Hospital Spend Analytics™ professionals.
- Provide spend analytics training for your team.