Margin improvement requires a long-term strategy that prioritizes stabilization and fosters patient and employee loyalty and retention. While cost-cutting measures may offer short-term financial gains, they often fail to build a robust financial foundation. Instead, adopting a holistic margin improvement strategy allows providers to implement structural changes that ensure long-term results and stability, with the flexibility to accelerate timelines when necessary.
To facilitate this effort, BDO recommends using a holistic checklist to guide the development of a tailored plan and implementation roadmap, focusing on the following areas:
Phase I: Identifying Cost and Revenue Opportunities
- Benchmark your costs at line item against industry standards.
- Assess your revenue cycle management to identify gaps and inefficiencies.
- Review your patient access, demand, and capacity management to identify gaps and inefficiencies.
- Assess the profitability of each of your service lines.
Phase II: Reviewing Balance Sheets
- Identify priority strategic initiatives and determine the capital requirements to support them.
- Conduct property, plant, and equipment (PP&E) assessment to determine if any assets should be sold, leased, or disposed.
- Identify opportunities to deploy or reinvest working capital.
- Reevaluate your debt structure to assess your organization’s current financial risk level.
- Determine whether you have any unclaimed property and, if so, review your state’s regulations around reporting and refunds ahead of balance sheet transactions.
- Assess your management of assets like technical systems and medical equipment to identify gaps and inefficiencies.
- Identify opportunities to capitalize on R&D tax credits.
Phase III: Accelerating Digital Enablement
- Leverage data and machine learning to reduce preventable readmissions and offer expanded consumer-centric self-service tools with a side benefit of shifting work into the hands of patients.
- Assess your EHR platform to determine if it is properly integrated with your other systems and can support data-driven predictive analytics.
- Prior to introducing new technology systems, evaluate their potential impact on and disruption to clinicians and administrative staff.
Phase IV: Exploring Partnership Opportunities
- Consider opportunities to partner and collaborate for functions such as IT, contact centers and supply chain purchasing agents.
- Explore outsourcing and managed service arrangements to achieve efficiencies in core business operations.
- Critically evaluate mergers and integration opportunities to ensure they are patient-centric and focus on improving care at lower costs.
Phase V: Developing Your Workforce
- Consider how you can enable remote work opportunities to expand your talent pool.
- Invest in continuous learning to promote employee retention and satisfaction.
- Integrate advanced practice providers (APPs) across service lines.
- Invest in recruiting and training licensed practical nurses (LPNs) and medical assistants (MAs).
Phase VI: Concurrently Addressing Payers/Managed Care Strategy
- Assess state of payer contracting and conduct a readiness assessment for VBC preparedness.
- Review gaps in care, issues with care retention/capitation & referral leakage, and develop access expansion to satisfy network and managed contracting goals to achieve contract compliance and risk revenue return.
Implementing these solutions will help your organization optimize healthcare services, enhance revenue performance, and improve cost efficiency, driving bottom line results.
Schedule a meeting to discuss how to implement these steps in more detail and tailor a plan to meet your specific needs.