Using Agency Data to Manage Effectively
Posted On: June 18th, 2013
Former Vice President, Product Marketing and Strategy, McKesson (Retired)
The idea is to collect relevant metrics, share them widely and manage to them, says Andrea L. Devoti, president and CEO at Neighborhood Health Agencies, Chester, Pa. All staff receives top-line financial information quarterly, while managers receive in-depth monthly reports that track certain key metrics. Management goals include:
- Break even from operations
- Cover next year’s raises, insurance increases and reimbursement decreases
- Increase volumes and efficiencies
Devoti says that the last point is particularly important, because increasing volumes and efficiencies can help improve margins. She tasks managers with reviewing contracts at least twice a year, which on the supply side can keep vendors on their toes. Insurance contracts also should be examined frequently, adds David J. Berman, CPA, CVA, principal at Simione Healthcare Consultants LLC.
“More revenue isn’t necessarily better,” says Berman, who also serves as interim chief financial officer at Neighborhood Health Agencies. “If you’re taking a loss from any payer, you need to understand why and wonder whether that contract should be renegotiated or dropped.”
Managers are constantly on the lookout for new product lines to boost revenues, Devoti says. To increase efficiencies, she says employees can be shifted between departments on a pay period to pay period basis. And anyone who is on workers’ compensation returns with a restricted duty job, she notes.
Finally, the agency has no marketing department, because “marketing is everyone’s job,” says Devoti. She adds that employees are heavily engaged in the community.
Carefully watching financials by no means equals a reduction in quality. In fact, the agency’s staff costs are routinely higher than state averages, Devoti says.
These tips can be used by both for-profit and nonprofit home health and hospice agencies, notes Berman, and adds that being a nonprofit “is not an excuse to be inefficient and unprofitable.
“Remember, no money equals no mission,” Berman says.