Preparing for the changes in healthcare: Part 2 Operational Improvement

Both healthcare providers and payers are under a lot of pressure due to rising costs as well as governmental requirements and regulations. To better serve their customers and to stay ahead of the challenges, health care enterprises must improve their operational as well as financial performances. Many organizations will have their own in-house consultants or management team, but not all. Any health care organization will benefit from seeking healthcare management consulting to improve their strategies and achieve their goals.

Congress passed health “insurance reform” on Sunday night and the President will sign into law shortly, we as both consumers of healthcare as well as those who work in healthcare will see changes as costs go up and government increases its regulatory role. It is also likely that reimbursement will decrease. It will be interesting to see how it all unfolds over the next few years but preparing for the future is now even more important. Not only is the financial aspects critical but making sure your healthcare organization is running at peak efficiency is critical.

Improving Operational Performance
The operational aspect of a health care organization must also be strengthened through the help of healthcare management consulting. With a strong backbone, organizations can implement the right programs and services. The organization can set new goals in order to increase effectiveness, efficiency and productivity.

With these elements in the right place, the programs can better serve the customers and provide higher quality care. With a new focus, the organization will meet government regulations and have enhanced ways of communicating with physicians and other health care professionals.

Importance of Financial Analysis

Does your organization use financial benchmarks and evaluations for future planning?  Do you have a clear indication on how your business is performing and where it could improve?  If you answered no to either question then your organization could benefit from a financial analysis.  A financial analysis is a comprehensive tool which is essential to understanding how your business is currently performing, and how you can allocate resources for improvement in the future.  Financial analysis can help you evaluate your return on investment and also give you an edge over the competition in a down market. “Few things are more vital to the success of an organization than a comprehensive financial analysis. It takes the guesswork out of success and can greatly help your organization from a strategic standpoint” said Brian Johnson BHM’s SVP of Fianciacial and Claims Operations.  In fact now when many organizations are experiencing lower profit margins and wide cutbacks a financial analysis can be an important tool in getting the most bang out of your buck.  It can really help you pinpoint your strengths and weaknesses and adjust your planning strategy accordingly.  Analysis can improve profitability, allow you to set benchmarks, assist your organization in optimizing productivity, and allow you to get a thorough look at your finances situation now and into the future.  Tomorrow I will review the essential components of a financial analysis.

The Wellpoint Mugging by WSJ 1 18 10

The Wall Street Journal reported today about the very controversal Wellpoint rate hike in CA. It appears that everyone is jumping on the evil health insurance band wagon.  We have discussed that even if health status and health cost per person in america was stable that the current recession will drive up healthcare costs. As employees loss their jobs, they and their family do some quick math.  What are my monthly known medical expenses and what is the current cost of COBRA.  Families that have high health care cost in relation to the premiums they will be charged for COBRA keep their insurance where as those that have low or no real healthcare cost ( ie the healthy population) chose to take the risk of a major medical event while uninsured.  This has a double impact on health insurers, decreased revenue due to lost members( layed off employees) and increased expense ( health insurance companies biggest expense is their members health care cost). In response to this I suspect we will see large increases in health insurance premiums over the next few years.  The WSJ went on to say that the recently proposed health insurance reform will led to very similar rate hikes.  Any type of healthcare reform has to take very seriously the unintended consequences.