National financial impact analysis for a COVID-19 Compensation agreement
About the collaboration
LOGEX closely collaborated with 20 volunteer hospitals on behalf of the Dutch Hospital Association (Nederlandse Vereniging van Ziekenhuizen, NVZ) to test the financial impact and potential risks of a national COVID-19 compensation agreement that aimed to provide financial security for hospitals amidst the national COVID-19 outbreak.
In July 2020, after extensive negotiations, the Dutch Hospital Association (NVZ) and the Association of Health Insurers (Zorgverzekeraars Nederland, ZN) reached a landmark agreement to guarantee financial security for hospitals amidst the national COVID-19 outbreak. In order to ensure sufficient capacity for COVID-19 care, hospitals deferred regular treatments, which had a significant impact on their earnings. The national agreement allowed hospitals to cover their fixed costs, aiming to provide financial stability in the healthcare system. Compensation, however, was applied through generic parameters, while hospitals were not equally hit by the effects of COVID-19. In this unprecedented situation with many unknowns, the NVZ approached LOGEX for support in conducting an in-depth financial ‘stress-test’ by means of a financial P&L forecast among 20 of its member hospitals across the country.
It was vital to test and understand the financial impact of the COVID-19 compensation scheme, its potential sensitivities or risks, in order to make a well-informed decision on an arrangement that aims to provide financial security for the Dutch hospitals.
Leveraging insights and experience of its Financial Control portfolio, LOGEX worked closely with 20 individual hospitals to develop a detailed P&L Forecast for the remainder of 2020, including the expected effects of the national agreement and various sensitivity analyses.
LOGEX’s deep knowledge of hospital financial control helped the hospitals and the NVZ develop a better understanding of the sensitivities and potential risks or opportunities of the compensation scheme, to a level that otherwise would not have been possible within the highly demanding timeframe. Furthermore, partnering with LOGEX allowed the NVZ to focus more of their efforts on managing the already challenging negotiations, backed with clear and quantified insights.
Our Financial Control suite enables you to gain mastery over patient volumes, resources and finances for the entire organization, leading to better financial performance—with the numbers to prove it.
We cover the full spectrum of financial and operational processes, from costing and budgeting to forecasting and contracting.
Our activity-based costing model empowers you to:
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Make cost calculations for healthcare providers that are easy to understand, apply, and optimize.
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Allocate resources and costs to patients, care activities and episodes.
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Benchmark unit costs with national and international peers to identify areas for improvement.
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Deliver information to national regulators automatically and in full compliance with National Cost Collection requirements.
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Bottom-up budgeting functionality facilitates collaboration with non-financial stakeholders.
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Forecast and monitor volume, revenue and cost
Stay on top of expected vs. realized volumes, revenues and costs on a near real-time basis.
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Automate value-at-risk calculations for all contractual agreements with commissioners.
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Build and maintain reliable, easy-to-access forecasts based on machine learning algorithms.
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Deliver periodic financial results that are fully compliant with national regulations.
Overall ease of use
Simple navigation with a full audit trail integrated analytics and benchmarking. No need for internal SQL skills. Costing practitioners and Trust colleagues can focus on engagement and identifying performance improvement opportunities
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NHSI submission requirements
- Easy visualisation of how your costs relate to NHSI categories
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LOGEX’s Financial Solution team was able to:
- Develop a detailed financial forecast in an extremely challenging year
- Help analyze, identify and quantify variable elements in the hospital cost base
- Help review and standardize each hospital’s cost base, for comparison with 20 hospitals
- Consolidate findings in a management report to the NVZ board with (anonymized) results from the analysis
- Invest significantly for the national interest conducting an extensive analysis for 20 hospitals and consolidating findings in a timeframe of under 2 months, leveraging the team’s experience as well as LOGEX’s Financial Control platform
LOGEX support on conducting the financial stress-test (Elandproef) significantly helped concretize discussions between the NVZ and ZN. These talks would likely have been severely more challenging without a solid analysis as a base.