In the past, the US healthcare system relied on patient volumes, and fee-for-service (FFS) care to maintain its financial stability. The Covid-19 pandemic caused elective surgeries to be postponed, chronic disease treatments to be delayed, and a more than 70% decrease in hospital visits. The healthcare system suffered financial hardship due to the overflow of Covid-19 cases and the onerous staffing requirements. The system also highlighted the shortcomings of the cumbersome FFS model and gave value-based care more authority.
FFS rewards quantity, while value-based care rewards quality. Value-based care has long been a priority for Medicaid and the ACA. It goes beyond just providing the necessary care. It is about managing population health, preventive care, post-treatment experience, and post-treatment lifestyle management. Value-based care has a competitive advantage thanks to data analytics and predictive modeling.
In the post-pandemic era, cost management, claims management, and revenue cycle management (RCM) solution has become crucial to aiding organizations in restoring their financial health. Financial analytics can, therefore, only make the switch to value-based care easier and improve the system’s financial stability.
Why Use Analytics in Healthcare?
One of the most important factors in the decision-making process is data. However, healthcare analytics must be used to methodically transform raw data, which consists of dispersed facts and figures from numerous and diverse sources, into a meaningful format. This task is completed through an automated process using specialized software that sorts and processes the data using intricate algorithms and formulas. The end product is a readable output for online dashboards with graphs, tables, and printable reports that clinicians and hospital leadership can easily understand.
Additionally, hospitals must report patient care and financial data analytics software to ensure compliance with regulations because they are under constant state and federal inspection. As a result, there has never been a more pressing need to report accurate data timely. In addition to giving a clear picture of the effects on revenue, data analytics helps hospital administrators with this responsibility.
More about Financial Analysis
The management functions of control and financial management include financial analysis and management reporting as essential components. Investors, creditors, and management can assess a healthcare organization’s past, present, and future financial performance using financial analysis techniques. When the analysis is finished, the results are communicated to the relevant internal and external stakeholders, who decide based on the information.
Financial Analytics Adoption Catalysts
The healthcare sector’s biggest challenge is finding the ideal governing balance in healthcare financial management with increased efficiency and accountability. New difficulties in the shared services sector also appear in areas like budgeting, growth planning, cost-effectiveness, and benchmarking.
The traditional financial management approaches require overall proper financial management at all times, given the raised expectations for cost-effective and result-driven solutions. Through wise financial management and planning, the same can be effectively managed.
Healthcare organizations must address challenges and improve operational efficiency through efficient healthcare financial management solutions created specifically for hospitals. They must choose solutions supported by evidence and from knowledgeable financial managers.
According to the most recent MarketWatch report, the market for Healthcare Financial analytics is anticipated to expand at a CAGR of 24.5% from 2018 to 23. Growth is expected to be fueled by factors like escalating federal pressure to reduce costs, preference for telemedicine, adoption of electronic health records (EHR), initiatives focusing on the quality of care, and personalized medicine/treatment plans.
Improving the Use of Analytical Tools
93% of C-suite executives, according to research from Black Book Market research in 2020, think that data analytics will be “crucial” to meeting future healthcare demands and running effective operations. The use of advanced analytics at their company, according to 84% of them, is “negligible.”
Analytics were typically used to support prior decisions rather than for strategic planning. With the new changes brought about by the pandemic, there is a shift toward identifying crucial growth recommendations.
More Information but Few Correct Answers
There is a vast amount of data, but most are well-spent. 90% of all data and almost 70% of all-payer data are not used. It is gathered and kept but never interpreted, operationalized, or organized.
Adoption-Related Difficulties for Financial Analytics in Healthcare
Effective Financial Analytics is essential for all industries due to the high cost of medical care and to improve medical billing in the healthcare sector. The significance of financial management in healthcare organizations is evident: those in charge of any medical practice require a dedicated task force to handle the administrative and economic facets of running a medical facility.
The specialized and committed finance team manages personnel, accounting, and facility operations while enhancing patient care and lowering healthcare costs. However, there still are some challenges while adopting healthcare analytics software are listed below:
Limited Data Management
The healthcare sector still needs to prepare for a significant influx of data. The data collection and processing processes involve numerous manual steps. Another obstacle in healthcare organizations is the need for a unified data view for all users.
The adoption of the cloud is still in its early stages. Many organizations are still battling legacy issues. 59% of healthcare organizations, according to the Association of International Certified Professional Accountants, need help to extract data from old systems.
A new technological trend develops quickly. But the necessary skills take time to come by. The same holds for analytics implementations.
To ensure profitability and balance in your organization, financial analytics offers granular insights through targeted datasets, point-and-click functionality, and drill-to-detail analysis. Our tools include RVU productivity, in-depth reimbursement analysis, payment lag, days in A/R, denial recovery rates, and much more, in addition to volumes and receivables.