Data Integration Models for Pay-for-Performance: A CFO Perspective
Human services organizations are currently working on strategies to manage the changing landscape of value-based purchasing and pay-for-performance. As this new era continues to evolve, many C-Suites are challenged with preparing their organizations to meet the demands of new payment models. The first, and most crucial, step to managing these changes is to ensure that the organization has the right tools in place. Next, executive teams need to develop ways to combine data from multiple sources in order to produce the reports needed to meet payer-mandated performance requirements and manage value-based contracts.
Across many organizations, the surprising champion for these new initiatives is the CFO. The CFO position has been historically diverse, wearing hats in accounting and strategy. However, in recent years they have seen an unprecedented surge in time spent within the HR and IT departments. According to Robert Half Management Resources, CFOs have reported a 21% increase in time spent in HR and a 19% increase in time spent in IT. This is due largely to the fact that the complexity of the financial environment is growing rapidly between healthcare reform, new payment models, and difficult cost allocations, driving the need for increased collaboration between departments to streamline data collection and reporting.
The CFO is now responsible for collecting information from multiple systems to compile robust reports on the productivity of employees, and programs as a whole, for the analysis of costs and revenues at a granular level. This requires the organization to have highly capable systems in place, such as General Ledger, HR & Payroll, and EHR software solutions. However, the biggest challenge comes from finding ways to cohesively combine data from these systems using efficient integrations.
Efficient integration can be the biggest hurdle for CFOs, particularly if the core systems that they are using are already “pieced-together”. The average organization uses 3-4 systems to manage HR & Payroll, with only 13% using one, unified system. This can prove to be problematic, especially when considering that salaries and benefits are the highest expenses that organizations face. Those expenses are significant in the productivity, cost, and revenue calculations needed for a pay-for-performance model.
In order to fuel data collection and innovative integrations, a stable structure needs to be developed. One way to approach this is by automating multi-dimensional labor distribution through the use of organizational levels such as Job Code, Funding Source, Location, Program, Cost Center, and more. Organizational levels can then be assigned to positions and inherited by employees. By mapping GL codes throughout different organizational levels, you will be able to generate a GL file from your HR system into your Financial system, that will include the robust labor distribution data required to meet payer requirements.
Additionally, integrating your EHR with your HR & Payroll enables the transfer of service delivery units into the HR system. This will allow your organization to automatically allocate hours worked to the proper programs or, organizational levels. This helps organizations break down their labor costs by program in order to analyze the breakdown of costs and revenues at a granular level. Your organization will be able to produce reports that show the service level delivery of each employee. This information is critical to maintaining accurate staffing levels and ensuring that you are providing the highest quality care.
Maintaining multi-system integration between EHR, HR & Payroll, and GL systems allows organizations to measure the productivity and effectiveness of programs at a level of granularity that would have been otherwise unachievable. Not only is your organization able to track costs across organizational levels, you will also be able to understand the costs needed to achieve outcomes and deliver higher quality care. Combining this comprehensive data for costs, revenues, and service-level performance, allows CFOs to position their organization for efficient and manageable value-based contracts.