Medical practices have arrived at a juncture where the importance of business intelligence to strategic planning and growth cannot be ignored, says Scott Law, founder and CEO of Zotec Partners. “Physicians are, first and foremost, scientists, and historically they have focused on the science of their discipline as opposed to the business side of medicine,” he says. “In the current environment of evolving health care delivery and reimbursement models, the key to survival is finding ways to differentiate yourself—not only through productivity and efficiency, but also through quality and improved outcomes, which we are really beginning to be able to measure for the first time.”
Measuring, reporting and improving upon these critical aspects of the medical practice is essential, but many of the tools through which information is aggregated and analyzed have yet to reach their full potential, Law believes. “There’s a huge trend, in health care, of giving people information derived from their various information technology platforms, but there is not enough attention to making it simple and understandable,” he says. “That is a trend that is continuing to evolve: making the data more usable.”
In fact, Law says, when properly leveraged, business intelligence can have an impact on almost every issue impacting practices’ bottom lines. As an example, he points to payor negotiations and contract compliance. “Practices go out and sign all these payor contracts agreeing to 140% of Medicare rates, for instance,” Law explains. “Then 30% of the claims are either inappropriately paid or denied, and of that 30%, half are never followed up on by a typical practice. There’s not a lot of industry knowledge about how to monitor those contracts to ensure you’re getting every dime to which you are entitled.”
With properly leveraged business intelligence, on the other hand, practices can detect the red flags that indicate that a payor isn’t fulfilling its contractual obligations. The next step is even more powerful: “When you go into negotiations with a given carrier and you have the data at your disposal, you can negotiate into your contract that if they don’t pay appropriately by a certain number of days, a penalty is assessed,” Law says.
Demographic information is also of growing importance to practices’ financial health, especially as the health care system braces for an influx of newly insured patients in 2014 and beyond. “What we’ve seen is that 35-40% of ED procedures are not reimbursed by the person receiving the services, meaning they go unpaid,” Law notes. “We’re optimistic that when those services are covered, a practice with a lot of Medicaid patients in its mix should see payment increase. We can accurately predict a practice’s future revenue based on the business intelligence we have about those unpaid encounters.”
All the information in the world is useless if visualization is not a key consideration, Law cautions. “There’s no shortage of data coming out of today’s practices,” he observes. “Just as physicians take a scientific view of medicine, so those of us providing solutions to them need to take a scientific approach to data. We try to take these reams and reams of data and put them into images that are immediately digestible.” He concludes, “That’s the art of this business: making this new wealth of data understandable and actionable.”
Cat Vasko is editor of MedPracticeBiz and associate editor of Radiology Business Journal.