Your Data: The Ruby Slippers to Your Practice’s Profitability

Remember “The Wizard of Oz” when Dorothy discovered her ruby slippers could have taken her home all along? She spent days trudging through a strange land and dodging danger to get back to Kansas… only to learn she had the answer to her problem literally underfoot the entire time.

Frustrating, right? Yet your healthcare or dental practice could be in the same boat when it comes to improving profitability. Between accounting process issues, difficulty with collections, coding discrepancies and rising costs, the struggle is real.

But what if your practice already has what it needs to better its bottom line? Good news: You do! It’s called your data. And when you have it organized and easily accessible, you can use it to face your most common challenges.

How it All Works

For most businesses, accessing and using data is anything but straightforward.

“Most days you’re interacting with a bazillion different systems,” said Marie Monet, director of data analytics and business intelligence at James Moore. “Different vendors, different invoicing systems, different bank functions. We’re pulling out reconciliations, we have about 87 Excel spreadsheets, and we’re trying to run reports.”

This is where the first step of the process — data wrangling — comes in. The term might evoke images of a cowboy herding livestock using a lasso. While that’s definitely not an office environment, the concept is similar. In the simplest of terms, data wrangling involves collecting scattered data and putting it in one place. Once it’s pulled from multiple sources, it’s transformed into a common format.

Then your data can be analyzed in a step called (appropriately enough) data analytics. This is where you look for patterns and trends in your data. These can indicate operational areas ripe for improvement, from how you bill for procedures to why revenues are falling.

An important component to this step is the ability to view your data quickly and easily. With so much information, it’s easy to become overwhelmed. So we use dashboards, which are essentially snapshots of your data put into a visual form that’s easy to digest. They’ll incorporate charts, graphs and other aids that allow you to quickly see the information you need.

But what good is all of this data if it takes forever to use? Automation speeds up all of these processes, from making entries in the first place to retrieving the information when you use it.

These components come together to create analytic process automation — the use of systems and technology to collect data, put it in a usable format (like a dashboard) and leverage it to make decisions.

“Once we’re able to automate our processes and get data in these bigger data sets, then we can throw these technologies onto it to say, ‘Tell me something I didn’t know,’” said Marie. “Sometimes it’s proving to you something that you had a gut instinct on. ‘It feels to me costs are increasing. It feels to me labor is increasing. It feels to me we’re not getting reimbursed for this diagnosis code.’ This feeling that you have. And again, you don’t necessarily have time to go piece through all that data. (Analytic process automation) gives you the ability to get to that.”

Applications at Your Practice

Several common accounting challenges can be overcome with analytic process automation. Take your chart of accounts, for example. This general ledger tool breaks down all of your financial transactions into categories. But having too much (or too little) detail or too many categories can make this information difficult to process.

“Sometimes we see a chart of accounts that’s extremely small. You can’t extract any type of analysis from them,” said James Moore partner Nadia Batey. “And I’ve seen some medical practices with an account for every provider, every segment. And once you print those financial statements, it’s hard to analyze them because they’re seven pages long. How do we condense that chart of accounts to make analysis a little bit easier?”

Condensing a chart of accounts could take countless hours as you examine one transaction at a time and see how it could be reclassified with others. Automation, however, can make this a much quicker task.

Data analytics can also help remedy inefficient medical billing processes. Because every insurance carrier has different billing requirements, the same procedure yields different financial results depending on who is billed.

“We had a provider performing a specific procedure that required really expensive materials. But the procedure itself generated a significant return on their investment,” said Marie. “They found that over their different insurance carriers, there was a pretty wild variation in how long it took for reimbursement.”

Your billing data can be analyzed for average claim reimbursement times and amounts to see which carriers lead to higher and more timely payouts. Analysis of diagnosis codes can also indicate when and why some providers have higher reimbursement rates.

On a similar vein (no pun intended), you can use your data to find unnecessary write offs. Sometimes in the accounts receivable process, there are simply too many payments to be processed and/or collected. Writing off an amount due becomes a short cut to completing your A/R work. However, this is often a sign that your collection process just isn’t working. Analyzing how often write offs happen and other related factors can help you zero in on a solution.

Analytic process automation can also help with the timeliness of accounting operations. Bank account reconciliations and ledger entries might not always be made regularly. This could be due to missing personnel, lack of software training or other reasons. Regardless of why, it makes it difficult to rely on your financial data — causing your practice to be more reactive instead of proactive.

“We’re constantly dealing in historical information. And we ask, “How do we make that historical information current? And then how historical is it? Are we talking 30 days, 60 days, 90 days, 120 days?” said Nadia. “The timeliness of getting that information is so important to pivot, especially today when the cost of everything is increasing.”

How can you get started?

You might already have some of the tools you need. If you have Microsoft Office, for example, you might already have Power BI – a suite of cloud-based business analytics tools. Power BI gives you a 360-degree view of your most important data and the ability to build custom dashboards. Other external tools, like Tableau Desktop, Domo and Alteryx APA Platform, are popular with businesses around the world.

However, a consultation with an experienced data analytics services team can get the ball rolling. Your advisor can help you assess opportunities, sort through helpful products, and find those proverbial ruby slippers to get the most out of your medical practice.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.