At Adonis, one of the most common questions we get asked is how to measure revenue cycle effectiveness. While every medical practice should have a system in place to collect revenue, not every practice employs process or technology to analyze the effectiveness of its revenue collection. This process of revenue collection analysis in healthcare is typically called revenue cycle analytics.
Revenue cycle analytics is the systematic computational analysis of data related to a medical practice’s revenue cycle, which is the sequence of activities that a company goes through to manage its financial performance. This can include activities such as billing, payment processing, and revenue management. The term, revenue cycle analytics, often refers to software that offers insight regarding revenue leakage and opportunities for revenue cycle management (RCM) improvement.
How it works
The first step in the revenue cycle analytics process is to identify and collect historical patient, procedural, billing, and other operational data from a practice’s systems of record. This data often comes from EHR/EMR, practice management, and billing systems. All the collected data represents a piece of the revenue cycle and is used in the ensuing analysis.
Once collected, the data is moved to a unified repository - typically a data warehouse - where it’s then properly formatted and qualified in preparation for analysis. This step of data compilation is the most arduous part of the revenue cycle analytics process, as most of this data comes from disparate sources and is not uniform.
After being formatted and unified, the analysis is performed using a variety of techniques such as statistical analysis, data mining, and machine learning algorithms. The analysis is then distilled into various reports defined by predetermined metrics of interest. These reports are typically displayed in a singular dashboard and used by management to understand trends, inefficiencies, and improvement opportunities related to their organization’s financial performance.
What it shows
The key reports offered by revenue cycle analytics solutions provide an in-depth look into the financial health and performance of a medical practice. More specifically, the reports show how well a practice is operating its revenue cycle and where revenue is leaking. Some examples of the types of information revenue cycle analytics can show include:
- Trends and patterns in a practice’s revenue and profitability over time
- Inefficiencies or bottlenecks in the revenue cycle that may be impacting financial performance
- Opportunities to improve the efficiency of the revenue cycle and optimize financial performance
- Insights into patient behavior and preferences that can inform billing and payment strategies
- Comparison of a practice’s financial performance to industry benchmarks or other medical practices
Revenue Cycle Analytics Solutions
There are many different software and tools that can be used for revenue cycle analytics. Some examples include data visualization tools, which can be used to create graphical representations of data to help convey actionable insights; statistical analysis software, which can be used to perform complex calculations and analysis on large datasets; and machine learning algorithms, which can be used to automatically identify patterns and trends. The best revenue cycle analytics solutions combine all of the aforementioned tools into a comprehensive platform, often acting as the single source of truth for a medical practice’s revenue cycle.
The majority of practices use at least one of the following solutions for revenue cycle analytics:
- Built-in Electronic Health Record (EHR) Report
EHR software is used to consolidate a patient’s medical chart into digital documents. Many practices also use EHRs to manage certain aspects of their revenue cycle and financial operations. As such, EHRs that offer additional billing products and services also offer built-in RCM reports. These reports pull from the billing and financial data housed within the EHR and show high-level revenue cycle performance.
While helpful, EHR reports are not viewed as the most effective source of revenue cycle analytics due to a number of limitations. Many EHRs are only able to update reports monthly, meaning much of the insight being conveyed is informed by data that is stale and outdated. Also, EHR reports are highly reactive and not the best at proactively uncovering actionable insight and trends. One of the biggest drawbacks of EHR reports expressed by practices we work is the lack of customization. For most EHR systems, what you see is what you get.
- Spreadsheet Programs/Excel
Spreadsheet programs like Excel provide another avenue for revenue cycle analytics typically used by in-house RCM teams. While highly manual, building reports in Excel gives practices a more granular view into the performance of their revenue cycles. An analysis for most topics regarding RCM can be built within Excel as long as the data is available and collected, unified, and formatted correctly. However, this is easier said than done.
Limitations of Excel and other spreadsheet programs are dependent on the skill of the user building the reports. Creating the data models, pivot tables, and graphical representations are not only time consuming, but also extremely challenging if the user does not already have a high proficiency in statistical analysis and the program it’s performed in (unfortunately, most medical practices don’t have Excel wizzes on staff). Additionally, the reports built in Excel often need to be manually updated to show timely and accurate insights.
- Custom/3rd Party Platforms
While still considered a nascent offering within RCM, third-party vendors are beginning to provide custom revenue cycle analytics solutions that deliver added levels of specificity and insight. These third-party solutions are similar to the EHR report and spreadsheet options in that they help measure the health of a practice’s revenue cycle. However, the provided reports tend to be much more bespoke and go a layer deeper into revenue cycle analysis.
Although third-party solutions may be a costlier option initially, the custom nature of these platforms help practices be more proactive regarding RCM improvements and ultimately aid in increased profitability. Not all practices are driven by the same indicators of performance, so custom revenue cycle analytics solutions offer a great option for those that want to generate insights specific to the needs of their organization. Additionally, custom solutions typically mitigate the need for a practice to build the data pipelines and models required for the analysis themselves. Some custom solution vendors also help introduce a level of predictive analytics through machine learning. The added intelligence enables a practice to take action before predicted revenue leaks ever occur.
Ready to Add Intelligent Analytics to Your Revenue Cycle?
Adonis takes revenue cycle analytics a step further with its Revenue Intelligence platform for modern healthcare organizations. Our mission is to identify missed revenue opportunities and revenue leakage, allowing providers to focus on what they do best - patient care.
Adonis’ revenue intelligence platform unifies end-to-end RCM operations into a single, powerful view. By aggregating data from systems of record, the platform delivers actionable insights resulting in improved revenue cycle performance. To see the platform and discuss revenue cycle pain points, request an Adonis Revenue Intelligence demo with one of Adonis’ RCM experts.