Summary:
When a healthcare organization faced rising competition and operational challenges, they brought in Elliott Davis to help. Challenges included cash flow issues, high operating costs, and a lack of infrastructure optimization. Through a detailed analysis of finances and operations, we identified key issues hindering profitability. Recommendations focused on establishing actionable key performance indicators (KPIs) across the enterprise, improving revenue cycle protocols, and maximizing clinical efficiency. When fully executed, these initiatives are projected to boost profitability by up to 14%, strengthening the organization’s financial health and shareholder value.
Context:
- A multi-location healthcare enterprise was experiencing significant clinical and market shift, as the organization had recently lost several clinicians to retirement and market competitors. Noticing these challenges, the customer approached Elliott Davis with concerns about cash flow, operating costs, operational functionality, and infrastructure.
- To promote growth in both present and future markets, the client engaged Elliott Davis for a detailed analysis of practice operations to address challenges with practice profitability and shareholder value.
Our Approach:
- Aggregated 60+ data files to provide an initial analysis of the current state.
- Assessed the cost/revenue components of the business to improve earnings before interest, taxes, depreciation, and amortization (EBITDA), including revenue streams, billing and coding, provider production and oversight, policies and procedures, payer contracts, patient flow, the revenue cycle (RC), and staffing throughout the enterprise.
- Visited clinic sites to assess patient flow, understand the physical plant layout, and review limitations and benefits of each location.
- Aggregated site visit and constituent interview data to partner with quantitative findings.
Findings:
Based on our data analysis and research, key findings included:
- IT infrastructure inefficiencies – Operations suffered from inefficient workarounds and lack of communication between the Electronic Medical Record System and Practice Management System.
- Human capital and management infrastructure – Staff had sound job descriptions but lacked measurable KPIs for job performance. Limited oversight from management led to expense creep in easily adjustable areas like overtime pay.
- Revenue cycle – RC benefitted from a seasoned leader with a clear understanding of goals, but lacked defined processes and protocols, especially regarding denial management and lag day optimization.
- Ambulatory Surgery Center (ASC) optimization – One of two ASCs was fully optimized. The other had a gap in services where procedure days were inefficiently parsed, leaving salaried staff idle and increasing per-case contracted anesthesia costs.
- Operational and financial data transparency – Lack of actionable data points and identified baseline KPIs led to management and shareholder stress, especially when financial or operational outcomes were not as strong as expected. Highest levels of the Company operated with limited insight into the day-to-day operations, leading to management by firefight.
Customer Impact:
- Identified KPIs to streamline operations, reduce expenses, and increase revenue opportunities, bolstering bottom line growth.
- Provided a detailed implementation timeline for improvements.
- When fully implemented, combined cost savings and revenue opportunities projected to grow profitability by up to 14%.
For more information about how Elliott Davis can assist you and your organization, contact a member of our team below.
The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.
