Today’s environment necessitates that healthcare CFOs and financial managers explain, document, and defend the rationale behind their CDM prices.
Hospitals and healthcare systems have experienced years of inadequate inflationary update factors often reduced by factors such as presumed over coding under the federal inpatient and outpatient prospective payment systems. Consequently, operating margins, once attained through tight operating budget controls and across-the-board price increases to payers, have suffered for decades. Many hospitals experienced reimbursement shortfalls and some optimized their chargemaster prices to subsidize such losses and to help maintain their financial viability. Unfortunately, those techniques have caused individual chargemaster line item prices to become irrational and indefensible. Hospital Zero-Base Pricing® establishes prices based on actual unit costs and provides comparisons to local peer’s prices. Where needed, you can use sophisticated software and analysis to estimate unit costs, which saves the burden and expense of implementing a traditional cost account system.
To learn why your organization should consider a hospital zero-base pricing initiative, download our white paper: “Hospital Zero-Base Pricing®: A Novel Approach to Establishing Rational Chargemaster Prices.”