Revenue Optimization Services

The healthcare marketplace continues to evolve, and to meet the demands of your operating environment, you need to ensure you are retaining the revenue you need. CBIZ revenue optimization evaluates a number of business functions and determines where financial performance can be improved.

Common engagements include:

Charge Transparency

Your customers are price shopping for their healthcare services. Are you comfortable with your facility’s pricing compared to what your competitors are charging?

A market-based pricing analysis of charges will assist hospitals in achieving pricing transparency, which empowers customers to make their own healthcare-related choices and could benefit your facility significantly. To assist your facility in these efforts, our pricing services provide a comprehensive review of pricing and charges for your market. Our approach will consider competitor pricing, prices at comparable hospitals and “customary” charges reported by payers.

Although the most defensible and rational price is one rooted in the actual cost of providing the service or item, implementing cost-based prices can be strategically and financially detrimental to a hospital without proper market sensitivity. Attention must be paid to competition, fee schedules, payer contract terms, sophisticated net revenue models, audit trails, public relations and other business considerations in setting an optimal pricing strategy.

With these considerations in mind, CBIZ offers two options for review of pricing under the market-based pricing program:

  • Market-Based Pricing: Our project sets prices for hospitals based on market data. The deliverable we provide includes suggested revised pricing based on the local market and other competitive factors. This project will ensure consistent and competitive pricing but it does not include an impact of the revised pricing on net revenue or review of the Charge Description Master (CDM) for accuracy or completeness.
  • Market-Based Pricing and Net Revenue Analysis: In addition to the elements of the market-based pricing option mentioned above, our market-based pricing and net revenue analysis also considers the impact of suggested revised pricing on net revenues. Based on the parameters provided by the hospital, CBIZ will forecast the revenue impact of the proposed charges utilizing different scenarios of pricing to achieve desired outcomes.

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Strategic Charge Setting

As economic pressure mounts on all healthcare providers, it is vital that charges are set to balance the cost of the procedure, payment methodologies and community price sensitivity, with the net revenue needs of the provider. CBIZ has developed a tool based on computerized reimbursement models to ensure that a hospital is charging at appropriate levels.

Our service-industry approach helps the provider take into account the numerous methods by which final payment is made. We also help the provider to consider the market factors that can affect the margin on an individual procedure charge. Our ultimate goal for these analyses is to evaluate whether there is price elasticity for key services. The analyses provided by strategic charge setting include:

  • Procedural Charge Analysis: Our procedural charge analysis process is a review of procedural level charges for each department to determine the optimal charge level that results in the highest net revenue. The analysis considers payer mix, charge level of like procedures and gross revenue increase.
  • Competitive Charge Analysis: Our competitive charge analysis evaluates the provider's charging policies to tap into new revenue sources and to ensure that the provider takes full advantage of any competitive opportunities.

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Decision Support Services

The choice to implement a decision support system can be confusing and labor intensive. Often times, hospitals or health systems have a system in place, but fail to use it to capacity due to resource constraints or design issues. CBIZ has significant experience in the development, selection and implementation of successful decision support systems that generate meaningful results. CBIZ provides the following services related to decision support:

  • Development of economical decision support databases and reporting
  • Assistance in choice and implementation of system
  • Development of costing factors employed in the tool
  • Outsourced assistance in the maintenance and report generation of the decision support department
  • Revival or updating of existing decision support systems that have not been updated or maintained, or that have been abandoned due to lack of internal resources

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Benchmarking analyses are provided for hospitals, healthcare systems, providers interested in the quantification of value and providers who want to know how they stack up against their competitors. CBIZ focuses its benchmarking efforts in those areas which yield the greatest return on clients' investments. These efforts include:

  • Resource Consumption Analysis: Our analysis provides an overview of staffing and spending levels of your facility compared to standards based on local competitors or our national provider databases.
  • Selected Departmental Profiles: We analyze the cost of providing services within a specific department, adjusted for volume and case-mix intensity. This service will highlight areas where spending is above the norm and uncover causes for these variances.
  • Quantification of Value through the Hospital Value Index Analysis: Our analysis uses a blend of outcome, cost and length-of-stay information to develop the Hospital Value Index at the diagnosis-related groups (DRG) or product-line level. CBIZ develops norms using data from a cross-section of all-payer states and allows the provider to choose from a number of peer comparisons.
  • Competitor Profiling: CBIZ has the most comprehensive database available today for evaluating a client's position in the marketplace. The client's position is measured through DRG cost and length-of stay analyses, built around our best demonstrated practice benchmark approach.

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Economic Integration Model Development

The economic integration model serves emerging health systems or financially troubled health systems by demonstrating whether the creation of the new system will result in lower costs for the system and/or local community. The analysis uses Medicare cost report and uniform billing data to cost out every patient at each provider within the proposed system. The final determination includes the level of cost savings that can be achieved if each member of the health system performed at the best demonstrated practice and established reasonable targets.

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RVU/ABC Factor Development

CBIZ assists hospital in the development of Relative Value Unit (RVU) or Activity Based Costing (ABC) factors to be used in decision support tools or other finance packages. Our financial expertise allows us to offer two levels of assistance:

  • Development of Tools and Oversight: Our professionals work with clients and train them in the use of our factor development tools. CBIZ provides the worksheets, training and oversight, but the client handles the process.
  • Outsource Development: Under this option, CBIZ manages the entire factor development process with minimal interruption of the finance workflow. CBIZ directs all meetings, data collection and factor development, and is responsible for delivering a final product.

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Key Contact
Richard C. Parker Richard C. Parker Executive Director