Activity-Based Costing Software for Millions in Healthcare Savings

Activity-based costing (ABC) analytics software is in use among healthcare delivery systems with tens of hospitals, thousands of inpatient admissions, millions of outpatient visits, and thousands of physicians. Healthcare systems admit that the ABC analytics helps to tackle challenges to sustainability through effective cost management and clinical improvements. They mention cutting costs by millions and improving patient outcomes for such metrics as patient satisfaction, hospital readmissions, complications, patient outcomes, for example, in surgical fields, particularly orthopedics and other specialties. Applying the ABC analytics software also improves clinical results in such domains as women’s health and cardiovascular. What is the strategy that healthcare organizations implement to achieve these sustainable results? 

If healthcare organizations have a transparent comprehension of how much patient care provision costs and how those costs correlate to the results achieved, they will not have to tackle cost increases. 

However, a lack of relevant tools often prevents healthcare organizations from eliminating waste-related costs and decreasing the total cost of medical care. Data analytics helps them determine unnecessary variations in medical care procedures or in the use of supplies and apply timely corrections.

Cost Challenges to Deal with Activity-Based Costing System

Healthcare costs are growing steadily. According to McKinsey, the affordability of healthcare for patients as well as the profitability of medical providers and payers are under threat. 

The expansion of government programs, development of alternative payment methods, and changes in employer plans cause healthcare organizations to change their reimbursement strategy from volume-based to value-based and reduce the costs for improved patient health outcomes.

Healthcare delivery systems have to address the following issues in the cost management process:

• Insufficient knowledge about the actual costs of healthcare and their correspondence with the medical outcomes
• Superfluous cost variances of medical care routine and use of supplies
• Absence of price transparency for concluding relevant payer agreements

Features of Activity-Based Costing Software to Address the Challenges

Healthcare teams work together to create protocols that define the best care for patients.

ABC's analytics software then checks if these protocols are being followed or if there are any unnecessary variations.

Here are the tasks the software deals with:

• Developing and delivering cost and quality data for each patient
• Determining the areas where clinical variations can be eliminated
• Providing clinical process enhancement, service line reporting, and contract modeling
• Assessing the results to measure performance

What Benefits Can Practices Expect from Using ABC Analytics?

To deliver great patient care with fewer resources, the solution needs to pull together data on quality, results, and costs to find the best care pathways. 

Understanding how labor costs relate to the time spent on each case (like in operating rooms) helps make it clear what's driving hourly expenses. 

The analytics platform helps show how costs and clinical outcomes are connected. 

Medical executives use these insights to find operational variations and to focus on using resources more effectively. 

With activity-based costing analytics software, healthcare delivery systems notice the following improvements: 

• Leaders have a deeper understanding of cost variation and the reasons for inefficiencies in different parts of a healthcare organization, for example, in the operating room environment
• Spotting unnecessary differences in how the procedure is done across different service lines, even when there is a standard approach, helps better understand the areas for financial improvement, cut down treatment times, and reduce complications
• More cost-effective usage of the supplies
• Millions of dollars saved with the implementation of analytics software protocols
• Improved patient outcomes and healthcare quality in such metrics as patient satisfaction, hospital readmissions, complications, reports of treatment results, etc.

How Belitsoft Can Help

Belitsoft is a full-cycle software development and analytics consulting company that specializes in healthcare software development. We help top healthcare data analytics companies build robust data analytics platforms.

For integrated data platforms developed to collect, store, process, and analyze large volumes of data from various sources (Electronic Medical Records, clinic management systems, laboratory systems, financial systems, etc.), we:

• Automate data processing workflows (cleansing, standardization, and normalization).
• Configure scalable data warehouses.
• Set up and implement analytical tools for creating dashboards, reports, and data visualizations.
• Ensure a high level of data security and compliance with healthcare regulations such as HIPAA.
• Integrate machine learning and AI into analytics.

We also help build specialized analytical applications like Activity-Based Costing Analytics Software to support:

• Calculating factual labor and supply costs
• Allocating costs to various medical procedures and routines 
• Applying a flexible cost calculation system
• Combining the data from different sources (EHRs, personnel data, payroll information, general ledger, patient accounting systems, supply chain, pharmacy, etc.)
• Assigning direct costs of medicines, supplies, and labor costs to patients on the basis of their factual utilization
• Calculating and assigning remaining expenses, including minutes spent in the operating room, time planned for a particular procedure, or time spent on the MRI machine

If you're looking for expertise in data analytics, data integration, data infrastructure, data platforms, HL7 interfaces, workflow engineering, and development within cloud (AWS, Azure, Google Cloud), hybrid, or on-premises environments, we are ready to serve your needs. Contact us today to discuss your project requirements.