Sole community hospital reshapes financial outlook through service line analysis

Client background 

A sole community hospital that has more than 150 hospital beds, nearly 100 physicians and an annual revenue of less than $500 million.  

The business challenge 

Like numerous U.S. hospitals, this healthcare provider faced challenges with persistently thin margins and the challenges of managing reduced revenues amidst escalating costs, particularly intensified by the impact of the COVID-19 pandemic. Other external factors, including industry consolidations, staffing shortages, supply inflation and shifts in patient insurance due to aging populations also had an impact on its financial performance. 

The organization also faced the challenge of managing a recent conversion to a new electronic health record (EHR) system and limited access to analytic insights that could help to drive strategic business decisions. When analytics were requested, this provider had a reliance on third-party contractors to fulfill analytics through the creation of custom reports, which were time intensive to create and had limited potential for re-use. To address these challenges, this healthcare provider sought a streamlined solution that could: 

• Enhance transparency related to service line performance and deliver actionable insights by leveraging operational data, specifically regarding direct, controllable costs and revenues 
• Consolidate disparate expense and reimbursement data sources into a single source of truth, and allow drill-through into a detailed encounter and claim level 
• Facilitate exploration of service line opportunities at various levels of granularity, including service line, physician, and DRG/procedure, allowing for comparisons amongst peer groups or similar services 
• Improve data visualization capabilities and reduce the time required to fulfill diverse data requests, providing valuable operational insights for the organization, particularly with their general surgery and orthopedics service areas 
• Enable multi-disciplinary stakeholders to review the insights to identify and prioritize which opportunities to develop action plans on 

Baker Tilly’s solution-driven approach 

The hospital engaged Baker Tilly to implement and utilize Service Line Data Signs, a unified analytics solution that helped consolidate more than ten data sources into a single source of truth for one-stop-shop insights. By working with the leadership team and other stakeholders, Baker Tilly was able to retrieve the applicable data from numerous disparate upstream systems, transform it into a standardized and consolidated data model, and schedule an ongoing, automated data refresh that powered actionable, easy-to-use, drill-down dashboards.

After collaborating with the senior leadership team to construct reports and dashboards for in-depth analysis of the general surgery and orthopedic service lines, Baker Tilly engaged with the broader leadership, IT and finance teams to further enhance and fine-tune the reporting capabilities. This refinement process ensured that the reports provided a comprehensive overview at the executive-level while also providing transparency into the specific encounter-level details for a granular understanding of what was driving the observed performance trends. 

Continuing their collaboration, Baker Tilly assisted the finance and leadership teams in investigating discrepancies and addressing questions arising from the generated reports. Presently, the internal finance team actively utilizes Service Line Data Signs to uncover additional insights, explore variances and opportunities identified, build action plans for improvement, rectify problem areas and maintain data accuracy within the organization. 

The accomplished results 

By fostering collaboration among eight cross-functional departments, such as finance, clinical staff, marketing, IT, and quality, the hospital successfully enhanced its comprehension of financial operations and identified areas for improvement measures. Employing a unified approach across the organization and consolidating data from disparate systems, the team has reduced their time to fulfill analytics requests from days-to-weeks to minutes-to-hours and unveiled numerous opportunities for success. Examples of the opportunities uncovered, include: 

• One significant finding involved a single physician outlier whose per-case orthopedics supply expenses averaged more than $6,000 per case higher than peers resulting in potential savings surpassing $500,000 annually following the implementation of targeted supply and cost utilization enhancements.  
• Another notable finding was that the analysis across three major service lines revealed an annual total variance payment of over $600,000 to a particular health plan, highlighting a stark contrast compared to other top-paying insurance providers with whom the hospital had contracts. 

Through increased collaborative efforts between hospital leadership and various teams as well as frequently using Baker Tilly’s Service Line Data Signs to help inform opportunity identification and prioritization, the organization achieved a significant milestone by transitioning from sustained losses to a profitable status, marking the first time of this occurrence in several years.