Guidehouse Helps Rural Hospital Save $18 Million in Six Months

Challenge

Leaders of a 49-bed rural hospital embarked on an initiative to proactively rebrand, with the goal of becoming a regional healthcare network. However, a more than 20% decline in inpatient volumes and a drop in days cash on hand – from 54 to 21 days – forced leadership to put the project on hold.

Solution

The hospital contracted with leading global consultancy Guidehouse to initiate an enterprisewide performance assessment and margin improvement initiative. Guidehouse set a rapid analysis in motion, across seven areas—workforce innovation, growth strategy, change management, supply chain, physician enterprise, care management, and revenue cycle.

Guidehouse revenue cycle experts quickly discovered the hospital could strengthen revenue capture and boost cash by improving the accuracy of patient classification and reducing discharged not final billed (DNFB) pending physician action to $0. The hospital adopted these steps in just the second week of its work with Guidehouse. By week three, these efforts boosted net patient revenue by 8%.

Guidehouse then set out to identify ways to achieve $32 million in operational savings in one year, a primary goal of the hospital’s leadership team. In collaboration with team members across the hospital, Guidehouse:

• Worked closely with the hospital’s CEO and CFO to track and manage cash more effectively
• Strengthened leaders’ change management and leadership capabilities
• Strategized ways to create a high-performing physician organization
• Implemented targeted processes and technologies to drive revenue cycle performance
• Leveraged advanced optimization analytics to staff to demand
• Redesigned clinical processes and roles based on best practices
• Engaged physicians in reducing medical supply expenses
• Redesigned the care management team to standardize care delivery and improve patient classification

Impact

1. Identified $32 million in annualized improvements within 30 days of projections
2. Rapidly moved from assessment to implementation to generate ROI and cash flow within the first month of engagement
3. Realized $18.4 million in savings across workforce, revenue cycle, supply chain, clinical effectiveness, pharmacy, and physician enterprise workstreams within six months of project kick off
4. Achieved Rural Health Clinic status and Medicaid rate increases in just six months, immediately optimizing revenue