“We need behavioral health financial improvement services that will help us increase the hospital contribution margin.”
“Our psychiatric service line is losing money – how can we improve financial performance?”
“How can we improve our behavioral health program’s cash flow and make debt payments?”
Behavioral Health Financial Improvement Services
Schafer Consulting’s behavioral health financial improvement consulting team works with hospitals and health systems operating psychiatric service lines, residential treatment programs and community-based behavioral health programs improve their contribution margin and profit. We use real world business solutions to enhance efficiency, improve staff productivity, restructure costs and optimize revenue cycle and supply chain systems.
Since 1993, our focus has been uniquely on behavioral health programs operated by hospitals, residential treatment centers, and community behavioral health programs. Our Behavioral Health Financial Analysis, has prevented bankruptcy, and restructured debt for behavioral health operations by actively working with all stakeholders: Board of Directors, banks, bondholders, and creditors.
- Behavioral Health Financial Improvement Benefits
- Behavioral health financial sustainability
- Improved cash flow
- Revenue cycle improved coding, charging, billing and collections
- Increased hospital and psychiatric service line productivity
- Supply chain enhancements
- Improved use of data
- Focused, “same page” physician enterprise and practice operations
- Increased patient access and volume across all settings
- Restructured debt obligations if necessary
- Interim Management and Turnaround Services
Our financial improvement services fall into 3 main steps:
- Behavioral Health Financial Analysis is the crucial Step One in positioning for long-term financial viability in behavioral health systems.
- Effective change occurs while following the Step Two Behavioral Health Financial Improvement MAP (Management Action Plan).
- Step Three is Interim Management (optional).
Step One: Behavioral Health Financial Analysis
During the financial analysis, we identify the revenue and expense assumptions, the breakeven point, and collaboratively validate “low”, ‘mid point” and “high” opportunities. As a first step to quantify opportunities for financial improvement, we analyze elements related to:
1. Cash flow
2. Patient volume / Average Daily Census / Average Length of Stay / Outpatient site capacity
3. Operational workflow and efficiency; patient access and throughput
4. Provider and support staff productivity, number, skill mix, and function
5. Relationship with practitioners, compensation model and incentives
6. Payer mix
7. Revenue cycle performance & coding for professional and facility settings
8. Capital costs
9. Program model / specialty tracks / center of excellence
10. Business development, referral sources and alliances
11. Geographic locations
12. Supply chain and non-salary purchasing
13. State and federal funding changes
14. Impact of new programs, e.g. Behavioral Health Homes, Integrated Behavioral Health and Primary Care, Accountable Care Organization, Delivery System Reform Initiatives, DSH reduction, etc.
Step Two: Behavioral Health Financial Improvement Management Action Plan (MAP)
We draft and collaboratively refine a MAP that sequences activities relative to recommended changes that improve net revenue. In the course of the project, we will identify and communicate observations regarding the behavioral health services. These may include options your operation may wish to consider, such as:
- Discussion or assessment of the impact of regulations on expanded services
- Site review for expanded services – inpatient, day treatment, etc.
- Partnering with other healthcare systems and agencies
- Start up implementation / transformation management
Management Action Plan Components:
In the Management Action Plan we recommend a prioritized series of actions with time frames and responsibilities that can be shared, modified and updated as often as necessary by the leadership team.
I. Financially Quantified Opportunities for Improvement
- Based on the above operational enhancements we develop a written forecast of quantified financial improvements, focusing on those with the greatest significance for our client.
- We describe and measure the impact of various changes: improved revenue cycle, new sources of revenue, increased productivity, higher volume, changed payer mix, cost controls, and other changes.
- We utilize national behavioral health benchmarks for staffing ratios, productivity, and other relevant metrics.
II. Financial Projections and Scenarios Developed Collaboratively with Hospital Financial Staff
- We project net revenue and contribution margin associated with revised cost structures, new or modified programs, modified staffing ratios and structure, provider and staff productivity, payer mix, and other changes.
- We define revenue and expense assumptions relative to key recommendations and scenarios (e.g. specialty programs, revised psychiatric service line structure, improved collections).
- We include in our review applicable reimbursement rates, and the fiscal relationship with practitioners (employees, contractors/vendors, billing).
III. Manager Tools
- We provide proprietary management tools that reduce complex data to manageable, key metrics front line supervisors and managers use to drive desired outcomes.
- We teach and mentor managers in using the new tools, involving staff, and updating the Management Action Plan.
Step Three (Optional): Interim Management for Behavioral Health Financial Improvement
The optional Step Three involves the Schafer Consulting team providing interim management in order to implement the management action plan. We work 24/7 “boots on the ground” to provide interim management of the psychiatric services in order to assist a hospital or health system reverse financial losses. Our Senior Partners have owned and operated psychiatric hospitals and health systems making us uniquely qualified to attain financial growth and stability for your facility. For more information, please see our Turnaround Management service.
Schafer Consulting applies real world business solutions to behavioral healthcare operations with a resulting financial improvement. Our experience planning, building, and operating psychiatric hospital systems and multi-state children and youth residential treatment centers means we can efficiently, effectively, and seamlessly develop and implement a realistic and usable Management Action Plan for your organization.
Talk to us
Uniquely focused since 1993 in behavioral healthcare, we are knowledgeable of the specific financial challenges facing behavioral health service lines and organizations. We look forward to speaking with you about your specific needs. Call or contact us in confidence.