Hospital Zero-Base Pricing Yields Better Results than Traditional Across-the-Board Chargemaster Price Increases
- Written by Frederick Stodolak
If your hospital annually introduces across-the-board increases to its chargemaster prices (charges) and has leaders who believe that doing anything more sophisticated would not be worth the effort due to an ever-declining charge payer mix—think again.
Clients in more than a dozen states—including California, Washington, Arizona, Florida, Virginia, New Jersey, New York, Ohio, Massachusetts and others—annually upload their current chargemaster; usage statistics regarding service codes, patient types and payer plan code levels; charge payer contract terms; fee schedules and pharmacy and supply charge data to www.HospitalZeroBasePricing.com. With expert consulting support provided by Panacea at no additional cost, sophisticated “what-if” pricing models taking into account unit cost, customized peer group market data, Medicare and managed care fee schedules, and contract terms are run. The result is prices that are not only more rational and defensible, but prices that yield more net revenue than would otherwise be raised by a simple across-the-board charge increase.
Unlike traditional optimization, Panacea’s pricing algorithms ensure that net revenue is optimized, but only within the confines of customized market and other benchmark corridors. The system also takes payer caps and exceptions into account, producing a comprehensive set of on-screen and Excel reports grouped by department, patient type, payer, service code and more, illustrating gross and net revenue financial impacts.
Most clients have charge payer percentages ranging as low as 7 to 20 percent, and each year they receive the benefits of defensible pricing along with updated data and improved net revenue.
If your fiscal year starts anytime from Oct. 1 through Jan. 1, there is no better time to implement a hospital zero-base pricing approach—because we now have your competitor claims data available through December 2011, from which customized peer group standards can be developed easily using our cloud-based tools.
For an on-demand presentation, go online to http://panacea.articulate-online.com/5560909254
About the Author
Frederick Stodolak is the Chief Executive Officer of Panacea. He has 30 years of financial, accounting, software development and marketing experience in the healthcare industry and was responsible for inventory control and cost accounting in the manufacturing industry. Fred was among the first nationwide to utilize public data to perform integrated clinical, financial and strategic planning analyses, to develop hospital transparent pricing systems, and to introduce integrated systems resulting in paperless business office and health information management departments. Contact Fred at 866-926-5933 x703 or firstname.lastname@example.org.