Using report cards to sustain revenue cycle improvement: we manage what we can measure, and we manage well what we measure well

Healthcare Financial Management, July, 2005 by David Haray

Guiding Principle #3: Ensure that effective technology infrastructure is in place. Revenue cycles crave stability. Two events that can undo a revenue cycle are key management turnover and a computer conversion. During a conversion, it is important to minimize system downtime, maximize response time, and prioritize cash-flow-related system requests through regular meetings between IT and finance. One example of working with IT at Stanford is reducing month-end close from five days to an overnight process, which was essential to enable review of month-end results and establish work priorities for the following month. A second example is reviewing the prioritization of reports, ensuring that reports and computer jobs that generated both bills and follow-up work lists receive top priority and are available when staff arrive in the morning.

Guiding Principle #4: Deploy at all levels a comprehensive management tool set and report card metric (dashboard). A report card needs to:

* Measure each department's key performance indicators against goals

* Be published regularly

* Be distributed widely (including executive level)

* Incorporate KPI goals into management performance evaluations extending up the chain of command

Examples of KPIs are A/R days, cash versus 13-week average, adjustments versus 13-week average, revenue versus 13-week average, credit days, work in progress or being held by departments after discharge/registration by key revenue cycle stakeholder departments by reason category, aging > 90 days by dollar stratification, stratified billing productivity versus unbilled inventory, stratified follow-up productivity versus unworked follow-up, late charges, bad debt, cost to collect, and denials.

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The two most challenging aspects in introducing report cards are ensuring service-line executive support and buy-in and ensuring agreement and confidence around the sources of the data. Once these aspects are achieved, dialogue can focus on support, goal attainment, corrective action plans, removal of barriers, and acknowledgment of a job well done.

Stanford University Medical Center produces and distributes report cards every Monday. The complete report package is 58 pages, with the first three pages containing the executive summary:

* Page 1, a snapshot of selective KPIs, for the week ending Friday

* Page 2, written narrative highlights

* Page 3, 11-week trend of key KPIs plus prior fiscal year-end baseline

Guiding Principle #5: Sustain a culture of accountability. Create a venue where key executives and revenue cycle stakeholders come together to review the report card or dashboard. Stakeholder departments include patient financial services, health information management systems, contracting, IT, case management, admitting, and finance. The meetings should be chaired by the organization's revenue cycle leader. Continued executive involvement is crucial. The meetings should occur as often as necessary to obtain desired performance.

The organization's revenue cycle task force should meet monthly to ensure sustained revenue cycle success and achieved goals. This meeting should be the main meeting event of the revenue cycle. All other meetings should be preparatory meetings in anticipation of the main revenue cycle meeting. Preparatory meetings should be held daily, weekly, or biweekly as appropriate within, between, and among key stakeholder departments. At these meetings, key stakeholders should review their own respective dashboard reports and billing work in progress that is delayed and in inventory. The focus of these meetings should be to be proactive and to prepare the key stakeholder department leader for his or her report at the main revenue cycle task force before the executives. Examples of these preparatory meetings are: