predicting monthly cash with confidence and accuracy
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Predicting Monthly Cash with Confidence and Accuracy. Steve Markesich, CPAM Yale New-Haven Health Maryland, AI - 2012. The History. Background Hospital Only The challenge The evolution Trial and error Success. The “Model”. - PowerPoint PPT PresentationTRANSCRIPT
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Predicting Monthly Cash with Confidence and
Accuracy
Steve Markesich, CPAMYale New-Haven HealthMaryland, AI - 2012
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The History
BackgroundHospital OnlyThe challengeThe evolutionTrial and errorSuccess
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The “Model”
There is no “model” – one model doesn’t work (at least not for me - I use 5)
Why more is better Works across all hospitals within system 2-3 year process to get to this point
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The Factors or Variables
Gross Revenue• Net would be better if you didn’t have to wait
Cash (historical) Posting days Days of the week Current average daily census “Hiccups” Seasonality
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Revenue cashCalendar days historical
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Revenue/cashHistorical posting days
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6 month cash byday of week (mean)
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Coming up with thenumber
THE FORECAST RECIPE:• 3 month calendar projection: $24,795,672• 2 month calendar projection: $24,284,585• 3 month posting projection: $25,763,757• 2 month posting projection: $25,126,436• 6 month daily mean projection: $23,112,500• AVERAGE: $24,616,590
• Month Projection: $24M - $25M
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Tracking progress
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6 month cash byday of week (mean)
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The results for our organization THE RESULTS THIS FISCAL YEAR
Hospital A (1,000 beds) - accurate within 1% Hospital B (350 beds) - accurate within 2% Hospital C (200 beds) - accurate within 1%
OVERALL ACCURACY WITHIN 1%
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Current routine Offer forecast on the first or second
business day of the month Track cash and trends daily Update trends five business days prior to
month end. Communicate problems you know will
impact cash as early as you identify them (but don’t be “Chicken Little”)
Previous month issues
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What I track dailyPrevious day’s
• Census• Gross Revenue• Payments• A/R
• In-House•Minimum Hold•Candidate for Billing•Active
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Flies in the ointment
Computer conversions (don’t even bother) System issues (internal and external)
• Need to identify and report within the month
External fiscal year ends The finance department Census Price increases/new programs
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Suggestions to start off Do this on your own for a while and don’t
tell anyone until you get a comfort level Be slightly conservative in your
forecasting at first and update later in month with good news
Over time, trust your instincts Be an expert on historical trends within
your organization
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Final thoughts Develop your own process and routine Have confidence in your projections or
don’t offer any Be bold when the time is right Be careful about putting your operational
managers under the gun Keep tuned into everything that goes on
in your shop
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GOOD LUCK! Now for a brief update on Healthcare
Reform…………………….