The Louisiana health system establishes itself as an organization capable of keeping pace with changes around quality and care.
Lafayette General Health (LGH) has won awards in the past, but this recent one has a special place on its trophy shelf. And it credits Cerner with helping it win.
“We have been on our Journey to Excellence for some time at Lafayette General Health and have been honored with many awards in our clinical and technology areas,” said Carolyn McBride, LGH’s director of patient financial services. “So it was so wonderful to finally achieve recognition in the finance division.”
This fall LGH received a measure, apply and perform (MAP) award from the Healthcare Financial Management Association (HFMA) – one of only three organizations in the country recognized by the HFMA for performance improvement in revenue cycle.
The key achievement of LGH is best illustrated by the dramatic fall in Net AR Days – an indicator of overall A/R performance and revenue cycle efficiency. “There was a point right after our 2012 conversion where we topped 75 days net,” said McBride. “We ended our 2014 fiscal year at 44.” The HFMA sets the Net AR Days target at or below 55 days; LGH beat this by 11 days.
LGH was also able to reduce its Discharged Not Final Billed (DNFB) – which indicates revenue cycle performance and can identify performance issues impacting cash flow – from double to single digits. “There were days we were near $20 million, now we have days where we are down to near $6 million,” said McBride.
According to Moody’s Investors Service, the average operating margin for nonprofit hospitals is 2.5 percent. A variety of forces including the economic recovery, increased regulatory pressure and new care models have impacted the financial operations of health care organizations, contributing to increased operating costs.
Faced with increased costs, health care systems are watching their bottom lines very closely and striving to improve key performance indicators – like DNFB, Net AR Days, and Cost-to-Collect – in order to protect margins.
LGH began their Cerner revenue cycle journey in 2003. Two years ago, they implemented Cerner Patient Accounting which has allowed them to take advantage of a fully integrated revenue cycle system to help drive improvements in their financial operations. The solutions fully integrate with LGH’s Cerner Millennium® acute EHR, which enables staff to capture accurate and complete information at the front end, provides financial clearance capabilities and enables clinical data to drive coding, billing and cash collection operations.
In the coming years, two different groups will emerge in health care: those capable of keeping pace with the changes around quality and cost, and those incapable. LGH has not only firmly established itself among those in the former group, it has distinguished itself.
"I still remember when Patient accounting cut holes in walls between offices and put computers on swivels so that two offices could share a computer,” said McBride. “Having a system that brings clinical and financial information together combined with leadership, staff accountability and ownership has allowed us to take another leap forward.”