How LOGEX Financial Analytics helps create a smoother budgeting and costing process at Erasmus MC
About the client
LOGEX collaborated with the largest hospital in the Netherlands, Erasmus MC, in upgrading them to the LOGEX Costing solution. A year later, Erasmus MC already sees the benefits of the integrated LOGEX Financial Analytics by leveraging their unit cost to the Budgeting and Forecasting solutions.
The challenge
The costing system of Erasmus MC was ready for an upgrade, as the system didn’t meet the organisation’s requirements. The older version was centrally maintained, giving the risk of being dependent on the knowledge of specific people within the organisation as the only point of contact. The department managers and clinicians had no access to the system, and it was very challenging to explain the cost built-up and results. As a result, the unit cost was only delivered to the regulator and not applied in practice, and the value of information could not be used in the budgeting and forecasting process within Erasmus MC. Furthermore, contracting discussions with payers resulted in a changing portfolio of healthcare which they needed to reflect in budgets per specialty and department.
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We wanted to objectively adjust future budgets per specialty and department, given changes in payer contracts and our portfolio.
Mieke Moller – Manager Business Control – Erasmus MC in Rotterdam
The solution
In 2019 LOGEX helped Erasmus MC smoothly upgrade to the new Costing solution, creating more trust in the output. At the same time, Erasmus MC decentralised the process and heavily involved their department controllers. The solution also significantly improved the engagement of the clinicians. In addition, the strong foundation built in one year gave them the confidence to directly apply the unit cost in the budgeting process for 2021.
Later, in 2020, Erasmus MC fully integrated the output of the Costing solution in their budgeting process, applying activity-based-budgeting principles of the LOGEX Budgeting solution. Accounting for changes in portfolio and payer contracts, the solution helped Erasmus MC to objectively set their budget for 2021 and have much better data-driven discussions with over 40 controllers of all departments on their cost structure. In addition, the strong costing foundation and acceptance helped them successfully and smoothly embed this in the budgeting process.
From 2021 onwards, Erasmus MC will implement the LOGEX Forecasting solution to monitor and compare their activity-based budget to their actuals, allowing them to open discussions and make adjustments during the year rather than retrospectively.
The impact
- More efficient and easy to maintain Costing update due to rule set up.
- The Costing solution is decentralized, so can be maintained by multiple members.
- Support for calculated unit costs and benchmarks with management and clinicians.
- Extra add-on possibilities: Budgeting and Forecasting solutions
The knowledge and practical approach of LOGEX’s consultants made this project a success. We are super happy with our switch to LOGEX.
Mieke Moller – Manager Business Control – Erasmus MC, Rotterdam
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