At the Margins

Our latest insight into health care margin improvement efforts

Want to improve your margin performance? We can help.

by Eric Fontana and Trevor Goldsmith February 8, 2018

Hospitals and health systems feeling margin pressures are not alone. Moody's recently predicted that not-for-profits health systems' operating cash flow will shrink by 2% to 4% over the next 18 months. Indeed, in an environment of rising costs and uncertain revenue growth, there are no shortage of reasons for flagging margins.

But although the cost and revenue challenges are industry wide, their exact impact can differ significantly from hospital to hospital. To define and implement an effective margin strategy, hospitals need to understand the root causes of their margin performance. 

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Considering a physician-office-based CDI program? Here's why you should.

by Eric Fontana and Jamie Landsman January 30, 2018

Few hospitals and health systems doubt the financial impact of effective inpatient clinical documentation improvement (CDI) programs. The same principle—that providers must document and code both patient illness and care activities to ensure full payment and minimize audit or denial risk—holds in the physician-office setting as well.

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3 reasons hospitals can't afford to 'take their foot off the gas' on bundled payments

by Hunter Sinclair and Laurie Sprung January 22, 2018

Coming just a few weeks after CMS finalized its decision to roll back mandatory bundles, the agency's announcement of the BPCI Advanced voluntary bundled payment program has reenergized leaders committed to managing episodic costs.

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70% of hospitals will lose money on Medicare P4P, plus other takeaways for FY 2018

by Eric Fontana and Kenna Hawes January 17, 2018

Medicare's pay-for-performance programs (Hospital Readmissions Reduction, Hospital-Acquired Conditions Reduction, and Value-Based Purchasing) place up to 6% of your hospital's Medicare inpatient revenue at risk. As hospitals around the nation face increasing margin pressure, it's critical to remain aware of how these programs are changing.

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Map: New overall star ratings are out. How did your hospital fare?

by Eric Fontana and Kenna Hawes January 3, 2018

On Dec. 21, CMS released a long-awaited update of its Overall Star Ratings. 3,692 hospitals received ratings in the latest update, which was postponed from July while the agency revised the underlying methodology.

The methodology changes have certainly impacted hospitals' performance: The December update contains a much broader distribution of hospital performance across the range of star ratings (see below) than the old methodology would have yielded.

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2 weeks before major 340B changes, CMS answers some of your top questions

by Eric Fontana and Kenna Hawes December 20, 2017

Major changes to the 340B Drug Pricing Program are scheduled to kick in on Jan. 1, 2018—and CMS just released a new FAQ answering some of providers' top questions. 

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Our 2017 revenue cycle benchmarks are out. How do you stack up?

by Eric Fontana and Lulis Navarro December 14, 2017

Without a doubt, it's a critical time to refocus on the revenue cycle. In the face of growing reimbursement pressures and accelerating costs, finance leaders must elevate revenue cycle performance by both increasing revenue capture and lowering the cost of doing so.

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Community hospitals: Are your finances on solid ground?

John Johnston, CPA, MHA December 6, 2017

John Johnston, CPA, MHA

Following months of uncertainty regarding health care reform and anxiety about provider margins, Moody's August report confirmed the assumptions of many hospital executives: Not-for-profit operating margins declined in FY16, and for the first time in several years, annual expense growth significantly outpaced revenue gains.

Moody's forecast for tighter margins for the not-for-profit hospital sector going forward is troubling news for all, but especially for community hospitals, which typically have lower margins and fewer resources to fall back on than their large-system peers. Industry analysts have responded by emphasizing the structural challenges facing the industry, and some have noted the growing difficulty for independent hospitals to go it alone, while speculating on a possible uptick in mergers.

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