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Perspectives

The impact of decentralization

How hidden connections reveal improvement opportunities

With costs increasing and margins declining, determining when and how to centralize front-end operations can mean the difference of remaining profitable or not. This piece explores how the effectiveness of decisions to centralize or decentralize front-end operations can be determined by taking a closer look at registration related denials.

Taking a deeper look at the impact of decentralization

Providers today face a tough choice. Many health systems are consolidating often leaving front-end operations decentralized and disparate throughout the organization. These decisions can also impact patient engagement and satisfaction. As patient payment obligations rise, consumers continue to seek better access, improved customer service, and more involvement in care decisions.

What is one way provider executives can improve front-end operational results, which can lead to patient satisfaction and an increase in revenue? Take a closer look at registration related denials.

Insights and analytics

​In an attempt to cut costs, an east coast academic health system decentralized registrars across many of its clinics. An analysis of denial rates by registrar for calendar year 2014 revealed some unintended consequences of that decision.

The analytics showed that:

  • Registration related denials led to write-offs of 2.7 percent of annual net revenue—that’s $27 million in revenue margin leakage per every billion in net revenue.
  • Staff that infrequently registered patients (<20 per week) completed the registration on three percent of all accounts. This three percent of accounts represented 11 percent of registration related denials amounting to $2.8 million in write-offs per billion in annual net revenue.
  • More experience is better—lower denial rates per registrar directly correlated with higher weekly registration volumes indicating that specialists perform better than generalists. They accumulate more registration experience, and hence are more productive and produce better quality in less time.

For this provider, it was not possible to centralize many of these registration points, but it was clear going forward that corrective action was needed to help further prevent these avoidable registration related denials in the first place.

Key considerations

Provider executives can improve front-end operational results across decentralized locations and prevent avoidable registration related denials by utilizing several methods, including:

  • Adjusting registration training to document additional required steps
  • Providing consistent training for registration staff across locations
  • Implementing a feedback loop to raise awareness of costly mistakes
  • Determining how high performing staff is reinforced and incentivized by the management team
  • Aligning activities based upon corresponding volume
  • Considering the impact on reimbursement for both cost and revenue strategies
  • Establishing tools to continue to analyze decentralized registration points and identify additional areas for operational improvements

About the Sustaining Success series

The demand to derive greater value from health care is urgent and pervasive. Leading hospitals and health systems are identifying performance improvement strategies which transcend traditional cost reduction and respond to new payment models. Providers that increase value will be the most competitive. Organizations that fail to improve value and protect future margins are likely to encounter growing pressure.

This digest of articles shares examples of how health care providers are pursuing value through both short- and long-term initiatives within the dimension of performance improvement. Providing a view beyond traditional cost cutting methods, the series places a data-driven lens focusing upon how providers can utilize data analytics to identify and implement innovative solutions.

Visit the Sustaining Success series archive to explore the current digest of analytics-based perspectives on performance improvement in health care.

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