The 100-Percent Solution to Improving Healthcare’s Operating Margins

随着医疗保健机构适应COVID-19带来的收入压缩，以及来自保险公司和数字颠覆者的竞争加剧，战略成本转型是成功的关键。为了提高盈利能力并作出降低成本的战略决策，卫生系统需要充分了解其临床成本，并在视线范围内了解其临床成本。对大量开销池的成本和分配的估计是不准确和过时的方法，会导致财务团队迅速失去医生和管理人员的信任。基于医疗保健活动的成本计算(ABC)是准确度量和评估组织临床成本并了解谁在消耗资源——在组织中的何处以及用于什么目的的唯一方法。

Why Healthcare Needs Activity-Based Costing

COVID-19加剧了对成本的优先考虑。大流行对医疗服务模式的影响(例如，转向虚拟护理和减少急诊部门的数量)要求新的成本足迹是可持续的，并与相关收入正确匹配。由于许多系统还没有恢复到传统的数量/收入水平，问题是某些活动是否会恢复。

Also complicating healthcare’s financial future is the emergence of large insurers. These entities are making investments on the provider side, acquiring physicians and surgery centers or partnering withvalue-basedprimary care providers (e.g.,Oak Street HealthandChenMed) to reduce utilization by Medicare patients. These initiatives aim to decrease the traditional fee-for-service volume that has driven provider growth and expansion over the years.

Current cost accounting solutions are likely ill equipped for this increasing complexity, as they are often revenue-focused and deliver generic or inaccurate costing models. Many are home-grown systems, difficult to maintain and rarely used in strategic decision making. Estimates and allocations are inherent in these methodologies, and they don’t capture healthcare resource use at a granular level or provide actionable intelligence.

Healthcare Activity-Base Costing: A Solution to Match New Challenges

Healthcare CFOs can meet emerging cost challenges by adopting a comprehensive, scalable, and maintainable costing solution—ABC. As a healthcare costing methodology, ABC breaks organizational resource use down by patient, provider, service-line, diagnosis-related group, or chosen subset. The data is granular and actionable, pinpointing where the system has the opportunity to improve financially. The Health Catalyst PowerCosting™ is the first activity-based cost accounting system widely available today to track 100 percent of clinical costs, using time-driven and other activity drivers to understand resource consumption accurately.

The old methods of assigning cost reduction targets or setting across-the-board percentages for reduction will no longer work. Instead, ABC insights allow for new methods and approaches to optimize resource consumption and reduce costs.

The ABC methodology and insights of cost at a patient/physician level allow for rapid deployment and implementation of service-line management and provide insight into clinical practice variation and its impact on resource consumption and a framework for true cost productivity. Together, these capabilities allow for ongoing measurement and accountability around patient volumes and effective labor and resource optimization to ensure patient safety and operating efficiency.

Why Service-Line Management Is Increasingly Essential

服务线管理将成为一项必不可少的功能。当医院与较大的组织合作时，合作实体的住院和门诊设施在地理位置上往往相距较近。这种邻近性提供了一个机会，并迫切需要优化护理提供，质量和成本效率的服务领域-服务线的方法。

虽然卫生系统以前在医院或门诊中心的四面墙内管理成本和临床服务，但设施的地理集中度可能会造成重叠，并有机会更全面地查看设施的足迹、服务提供和患者人数/人口统计数据。通过在较少的地点整合服务，并创建专科医院或品牌/重点护理机构，而不是拥有各种专业的综合医院，临床服务可能会在质量结果、患者安全和成本生产率方面受益。

While consolidating facilities and services may seem intuitive, organizations need crisp and comprehensive data, both clinically from the EMR and financially from decision-support systems. Aggregated data enables a full understanding of the activity levels, resources used, and ultimately the profitability. The general ledger most likely only records information by the location, and old costing solutions and methods don’t have the capability to create these service-line financials.

Optimizing Cost Accounting Starts at the Service-Line Level

当组织了解他们在服务线级别的成本时，他们可以管理和优化它们。服务线路管理按特定属性(如诊断、疾病类别等)对患者或人群进行分组。Healthcareservice linestend to be patient facing, with examples including orthopedics, oncology, pediatrics, neurosurgery, behavioral health, and more. Organizations can consider service lines equivalent to a traditional profit and loss (P&L) center, with full revenue and expense elements.

Service centers是服务线路管理的组成部分，因为它们为服务线路提供关键服务。例如成像、实验室、护理/ICU和外科服务。服务中心可能有一个单独的收入流，但更合适的分类为成本中心，而不是服务线。他们主要支持所有领域、医生和服务线路，为患者提供关键的服务和支持。

Service lines and centers work together in the diagnosis and treatment of patients. They frequently interact during the patient’s care journey; service-line physicians’ clinical decision-making and practice patterns often drive consumption of service-center resources. However, separate physician and administrative executives often lead service lines and centers, and organizations financially track and measure them separately.

Given the service-line/service-center relationship, an accurate costing methodology must track and account for resource consumption throughout the care journey. Cost-accounting solutions need the ability to record all specific costs incurred, no matter the department or area of the hospital. The ABC system can match the physician’s decision-making throughout the care journey to the actual consumption of resources and cost (full-consumption costing), fully leveraging a wealth of clinical information in the EMR (Figure 1). Clinical revenue is specifically matched to the inpatient episode or outpatient procedure, enabling accurate, timely, and systemic creation of service line P&L and profitability insights by patient/physician/procedure.

The 100-Percent Solution

Generally, less than 50 percent of an organization’s total clinical costs are direct costs (e.g., medical-surgical supplies or pharmacy). The service centers generate the other 50 percent of the total cost (e.g., utilization of surgical services, labs, imaging, and the inpatient stay). As such, a cost-accounting solution must track 100 percent of clinical costs to control resource utilization, understand clinical variation, and identify opportunities to improve productivity. Tracking must include both the direct service-line costs and the indirect costs from the service centers. There is nothing “free” in healthcare. Care decisions result in the consumption of resources, and organizations must attribute the cost of consumption to the physician, procedure, and service line responsible for the decision.

Many of the home-grown cost accounting and productivity measurements, as well as the current software-as-a-service (SaaS) products in the market, only address the direct costs, making proprietary methods “50-percent solutions.” The incomplete solutions then use estimates or imprecise or incorrect allocation methodologies, such as relative value units (RVUs) or outdated standard costs, to allocate the service center costs. This can be a huge dissatisfier for clinicians, who often don’t recognize their practice patterns in these allocated costs; credibility and physician support for cost accounting can quickly fade.

由于不完整的成本计算解决方案，组织往往不能准确地将服务中心的资源消耗2022卡塔尔世界杯赛程表时间或临床变化归因于相应的服务专线医生。相反，组织倾向于让医院领导层单独对超支的结果负责，而不是让下医嘱和做护理决定的医生也负责。

目前的成本核算解决方案没有正确地将资源消耗与医生2022卡塔尔世界杯赛程表时间的决策相匹配，也没有突出同一服务线上的医生之间的显著差异。例如，对于住院病人，谁负责住院时间(LOS)?是院长还是科室主任?还是最终决定手术、药物治疗和出院的是医生?

Length of stay is often “free” to the service line physician, meaning there is no tracking nor consequence for having a three- versus a four-day LOS, even though the more extended stay is more costly. Still, health systems often hold the hospital or nursing leadership accountable for over-budget LOS, not physicians. If an organization can’t properly measure the cost of the physician’s decision-making, how can it hold them accountable for delivering on healthcare’sTriple Aim?

在下面的例子中，某卫生系统在腰椎融合术中的临床变化(图2)，在852个手术中，服务中心的成本接近总成本的一半(46%)。尽管该手术的平均费用为18220美元，但费用差异从平均水平的55%到155%不等——这显然是医疗系统减少差异的一个机会。

The example above illustrates the significance of service center costs in the total cost of care and the significant variation in clinical practice and the resulting cost variation. ABC is the only solution that can accurately account for the entire cost of care and illustrate the significant transformation opportunity in reducing unnecessary clinical variation and the utilization of service center resources.

Endless Possibilities: Insight for Physicians and Administrators

Clinicians and administrators need real-time data and self-serve capabilities around operating performance. They need the freedom to pose and answer questions about clinical efficiency, profitability (by procedure, clinician, and site), practice variation, resource optimization, and quality cost. As a solution, PowerCosting links seamlessly to an organization’s chosen visualization tools (e.g.,QlikView®,Tableau,Power BI等)，同时具有预先填充和临时功能，以交付业务智能。

随着临床信息系统的数据与患者级别的财务系统相连接，组织现在可以使用准确的数据来寻找机会和解决以前未见或未知的问题。财务团队可以确定真正的降低成本的机会，减少或消除“全面”降低成本目标的需要。服务部门领导可以“横向”查看整个卫生系统，以寻找潜在的冗余和整合和优化医疗服务和资源的机会。

Tools for Simple but Powerful Productivity Measures

Many health systems have established resources and reporting to measure various aspects of operations, purporting to measure efficiency and assist the clinical areas in their business decision making. Many organizations publish numerous monthly statistical and budgetary reports. However, are the reports actionable? Are they a source of insight for physicians and operators? Does the system hold leaders accountable for productivity when volume varies or just for meeting the budget? Is an organization still measuring labor productivity using nursing hours as a proxy for cost?

为了回答上述问题，ABC解决方案(如PowerCosting)提供了简单但强大的生产力度量，利用提供临床护理的实际成本作为“输入”度量和一套“输出”量度量来优化。这种能力确保组织拥有成本生产率的框架，从全球/系统级别开始，然后深入到单个医院/门诊设施，最终到单个部门、单位、服务线路和服务中心。

The following categories provide a framework for systemwide accountability and measurement, but the PowerCosting provides the capability to customize and add additional or alternative measurements. All measures are rooted in the idea of “cost per”; every clinical output is anchored to its resource (cost) input, providing a clear and comprehensive indication of the optimization of resources.

Clinical productivity and analytics comprise “cost per” metrics for all large cost, including the following:

• Global:
  • Total Hospital/physician cost per patient day.
• Supporting:
  • MedSurg/ICU nursing cost per patient day/discharge.
  • Surgical Services cost per operating room (OR) hour.
  • Physician/APP cost per work relative value unit (wRVU).
  • MedSurg supply cost per patient day.
  • Drug cost per patient day.
  • Others/Custom-design (“___ per ___”)

Financial Analysis and Automated Reporting

In addition to the individual physician and service line P&L capability mentioned previously, ABC and the PowerCosting allow finance teams to automate the completion and reporting of monthly results and financial analysis. Instead of using multiple databases and clinical systems to retrieve operating data, the PowerCosting provides one source of truth by leveraging all available data from the EMR and other clinical systems.

将这些数据与直接来自总账的财务信息结合起来，分析师现在就有了一个强大的工作空间来分析业务结果，并完全自动化报表的创建和准备。这种一体化的财务规划和分析概念充分利用现有数据，结合临床和财务数据来解释业务结果和趋势。该概念还完全自动化报告创建，并与可用的可视化工具无缝集成，允许团队分析结果，并花时间与临床医生和管理员，以民主化的信息和提高操作性能。

Healthcare Activity-Based Costing—the Most Efficient Path to Strategic Cost Transformation

Organizations must understand their costs comprehensively and accurately in an era marked by pandemic pressures and new entities and trends reshaping the healthcare financial landscape. As a comprehensive, transparent costing methodology, ABC solutions can help health systems transition from estimation-based cost accounting with limited visibility into the cost drivers to a full understanding of cost across the care continuum. This insight will enable the strategic cost transformation organizations must deliver in healthcare’s new normal.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

1. Activity-Based Costing in Healthcare During COVID-19: Meeting Four Critical Needs
2. Activity-Based Costing: Healthcare’s Secret to Doing More with Less
3. Six Strategies to Navigate COVID-19 Financial Recovery for Health Systems
4. How UPMC and Health Catalyst Improve Outcomes Using Innovation in Activity-based Costing
5. New Generation Activity-Based Costing Accelerates Timeliness of Decision Support

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