CHICAGO (March 19, 2019) – Using data gathered by the Crowe Revenue Cycle Analytics (Crowe RCA) software, Crowe analyses revealed that seasonality materially affects hospital net revenue. The Crowe report, “Seasonality Has a Bigger Net Revenue Impact Than You Think,” provides support for these findings.
Crowe is a public accounting, consulting and technology firm with offices around the world. The Crowe RCA solution captures every patient financial transaction in more than 1,000 hospitals nationwide. In this report, Crowe analyzed a portfolio spanning 45 states, including 605 hospitals within Medicaid expansion states and 409 hospitals in nonexpansion states. The metrics measured include accounts receivable (AR), denials, bad debt, credit balance and cash to expected pay.
According to Brian Sanderson, managing principal of Crowe healthcare services, finance teams often cite unsubstantiated reasons to explain month-over-month fluctuations in net revenue and revenue cycle performance. These include end-of-calendar-year benefit enrollment, summer physician specialty conferences, severity of flu seasons and the number of Medicare payments in the month. “For health system finance professionals who long suspected that seasonality affected net revenue but didn’t know how much … you were correct, and the effect is material,” Sanderson said.
The Crowe study examined quarterly trends:
According to Sanderson, health systems that use last fiscal year’s budget as a baseline for this year’s budget by dividing costs and revenue equally over 12 months are most affected by seasonality fluctuations. “Adopting quarterly or rolling budgets can allow finance teams to more easily adjust to anticipated changes, whether they are updates to managed-care contracts, new service line developments or the expected impact of seasonality,” Sanderson said. “Projecting net revenue performance allows health system operators to modify resource needs, diagnostic equipment usage and other cost drivers that affect already thin operating margins. Additionally, building greater autonomous functions into the revenue cycle allows hospitals to handle ebbs and flows of exceptions without the need to adjust their workforce.”
To view a video on the findings and download a copy of the report, please visit Crowe Benchmarking Report.
About Crowe Revenue Cycle Analytics (Crowe RCA) benchmarking data
More than 1,000 U.S. hospitals use the Crowe RCA solution to capture every patient transaction for purposes of automating hindsight, accounts receivable valuation and net revenue analyses. The benchmarking database spans 45 states and comprises 605 hospitals within Medicaid expansion states and 409 hospitals in nonexpansion states.
Crowe LLP (www.crowe.com) is a public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory, risk and performance services. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.
# # #