The Bottom Line

With Lila Kelso

In today’s health care market amidst closings and mergers, revenue is clearly a top priority for hospital leadership. And there are several ways to add to the bottom line – increase caseload volume or reduce spending per patient episode… all the while without sacrificing quality.  

A newly published article in Renal and Urology explores the evidence-based tactics used to increase revenue and shares insights from Avant-garde Health Founder and CEO Derek Haas, referencing an additional article he co-authored in the New England Journal of Medicine entitled “Adding Value by Talking More”.

The narrative examines two operational adjustments that have proven to build efficiency in patient care:

1.    Engage with a specialized, qualified support staff
2.    Invest in physicians speaking with patients

Both require an additional investment, but both can deliver a strong ROI according to the research.

When hospitals use physician extenders, those trained to complete tasks such as typing up charts and preparing exam rooms, providers are then able to practice “at the top of their license,” performing specialized patient care. With this type of increased staffing support, physicians can worry less about time-consuming tasks or paperwork, and take more time to focus on the patient with a goal of increasing quality outcomes.

According to the Renal and Urology article, “In its 2017 DataDive Cost and Revenue Survey, MGMA found that offices with more physician extenders and other support staff had higher revenues. Practices with a ratio of .41 or more non-physicians to providers earned more than those with .20 or fewer, regardless of the specialty. The offices with more support staff reported having 34% to 55% greater productivity as well.”

Also, when hospitals encourage physicians to have more meaningful conversations with patients, outcomes improve. When they spend more time preparing patients for an upcoming treatment or introduce them to how they should manage their newly discovered condition, the patient is more likely to shorten their length of stay during hospitalizations and require less costly continued care for the treatment of a chronic condition. By spending more time up front, doctors are saving time and money for each episode.

According to the NEJM article in one scenario, “The presurgical conversation cost less than $200 for the clinician time, and it produced cost savings of more than 10 times that amount, as well as better patient outcomes.”

For hospitals in value-based payment models, this reduction can result in higher reconciliation payments applied to revenue goals. In fact, one of Avant-garde Health’s west coast clients was able to receive a payment from CMS for $815,000 by reducing the average costs across the care continuum in orthopedics. 

For hospitals looking to increase capacity, this reduction can mean additional revenue for new admissions. Another Northeast client estimated that by reducing the average length of stay as a result of more efficient care pathways and better patient education, they were able to add $4.3M in capacity to treat additional patients annually.

To read more of our case studies on how health systems are increasing profits and improving quality, go to https://www.avantgardehealth.com/case-studies/