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BI for Healthcare: Revenue Cycle Management

Business intelligence can be an enabler for performance improvement across multiple areas of a Healthcare business. In this blog I will focus on revenue cycle management.


While cost of delivering care continues to rise, getting reimbursement from patients and insurance companies is getting more difficult for doctors and hospitals. Complex coding and billing requirements, combined with reluctance of patients to pay their portion of healthcare costs is increasing the number of days to receive payment on accounts and decreasing margins. BI can help ensure accurate claims submissions, improve payment collection processes, accelerate cash flow and increase profitability.


Common areas where BI can aid in revenue cycle management include;

Service Line Analysis – Measure and monitor service line income and expenses; identify root causes of trends and variances; compare volume and margin across service lines; and forecast future revenue and profit. Understanding drivers of service line performance helps healthcare organizations identify procedures that are not financially sustainable, evaluate improvement opportunities, and make fact based decisions about which services to grow and how to grow them.

Claims Denial Analysis – Measure and monitor reasons for denial; denial appeal status; provider and payer responses to authorizations and concurrent denials; physicians and departments involved in the denial process; level of care determinations; and revenue lost or at risk. Understanding which payers are denying claims and why helps healthcare organizations reduce revenue leakage by decreasing coding and billing errors and increase cash flow by speeding up claim turnaround time.

Accounts Receivables Analysis – Measure and monitor the effectiveness of your collection processes; prioritize accounts by ability and likelihood to pay; determine which accounts to collect in house and which to send to third party agencies; forecast collected amounts and compare against account receivable balances.


The following screenshots show how SAP BusinessObjects Explorer can be used to analyze profitability.

This screen shows gross profit for fiscal year 2009 sorted by hospital. Manor Mesa Medical Center was the worst performing so we’re going to filter for just that hospital.


Now we’ve sorted by diagnosis group and can see that stroke is where we are losing the most money. So we will filter on stroke.


This screen shows the services associated with the stroke diagnosis group at Manor Mesa in 2009. It’s apparent that ICU service was the biggest drain on profitability.


Finally we have filtered on ICU and sorted by patient name. In the top right we can see the physician associated with these patients as well as the diagnosis. All it took was a few mouse clicks and we are ready to have a fact based discussion with the head of the hospital on how to maintain financial viability.

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