William Cleverley is such a regular at the annual American College of Healthcare Executives conference that he can't give an exact count of his speaking gigs there. This year is about No. 20, he says.
In addition to a lot of harsh Chicago weather, Cleverley has experienced his share of financial storms in the industry. But with reimbursement pressures at a peak, never has his brand of expertise been more in demand.
Cleverley is one of healthcare's best-known financial troubleshooters, assisting hospitals in their efforts to maximize the bottom line. He founded the Columbus, Ohio-based Center for Healthcare Industry Performance Studies, which was sold about a year ago. He recently left after a falling out with the center's ownership. Last December, he opened a new firm, Cleverley & Associates, in Columbus.
His presentation, "Strategies for Maximizing Hospital Value," will be made at 4: 15 p.m. Monday, March 27, and at 8: 30 a.m. Tuesday, March 28.
Cleverley takes a comprehensive approach to his consulting work, reviewing everything from investment income portfolio management to accounts receivable to the cost of capital financing. He uses comparative data from his own clients and public sources, namely HCFA, in the process.
"Anything that we think can have an impact on performance, we try to look at," he says.
His presentation will consist of an overview of a financial tune-up, followed by a case study, he says.
One hot topic is revenue enhancement. Cleverley says hospitals have historically focused on controlling costs with far less attention to boosting income through price increases and proper billing. In the current climate, that's starting to change.
"Right now, there's never been greater interest in looking at revenue for improving performance," Cleverley says.
He says price increases can have a dramatic impact. He cites an example of an unnamed client-a community hospital in a market with little managed care-that expects to roughly double its 1999 profit of
$4 million this year under a new pricing scheme. Cleverley says his firm reviewed prices for 9,000 procedures and adjusted all of them, based on the hospital's orders to raise rates by no more than 8% overall and charge no more than competitors for any procedure.
Of course, hospitals can't raise prices to their biggest payer, Medicare. Moreover, substantial hikes might not be feasible in markets with heavy competition and lots of managed care.
Hospitals need to identify procedures that have high concentrations of patients who pay on a charge basis, compare their charges with those of competitors and adjust accordingly, Cleverley says.
"If you've got 25% to 40% of your business that is related to charges, making some changes there can have a very large impact," he says.
Another pressing issue is Medicare's new ambulatory patient classifications, which are being rolled out this year. APCs will be used to apply prospective payments to hospital charges for outpatient procedures.
Although APCs won't be the focus of his talk, Cleverley says he's developing a system to analyze them. Hospitals can minimize the blow by closely examining their coding practices and bundling procedures, he says.
"The initial estimates are that hospitals are going to lose a significant chunk of money when HCFA moves to APCs. . . . I think the average hospital would find it's going to lose somewhere around 10% (of outpatient Medicare revenue)," he says.