How our COVID-19 National Financial Impact Analysis helps contribute to financial security for hospitals
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 nationwide COVID-19 outbreak.
The challenge
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. To ensure sufficient capacity for COVID-19 care, hospitals deferred regular treatments, which had a significant impact on their earnings. In addition, 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 the effects of COVID-19 did not equally hit hospitals. In this unprecedented situation with many unknowns, the NVZ approached LOGEX for support in conducting an in-depth financial ‘stress test using 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 to make a well-informed decision on an arrangement that aims to provide financial security for the Dutch hospitals.
The solution
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 on managing the already challenging negotiations, backed by clear and quantified insights.
Financial Control
Our Financial Control suite enables you to gain mastery over patient volumes, resources and finances for the entire organisation, 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:
Calculate, apply, and optimise
Make cost calculations for healthcare providers that are easy to understand, apply, and optimise.
Maximise the flow of resources
Allocate resources and costs to patients, care activities and episodes.
Benchmark and improve
Benchmark unit costs with national and international peers to identify areas for improvement.
Deliver, regulate and meet standards
Deliver information to national regulators automatically and in full compliance with National Cost Collection requirements.
Our activity-based budgeting model makes it possible to:
Build and benchmark budgets
Seamlessly link volumes, resources and finances in one budget.
Anticipate and respond to future demand
Match the deployment of resources and manpower to the future demand for care.
Zero in on areas for improvement
Determine how portfolio choices impact operations, and spot areas for improvement.
Involve physicians and managers in budgeting
Bottom-up budgeting functionality facilitates collaboration with non-financial stakeholders.
Our forecasting model enables you to:
Forecast and monitor volume, revenue and cost
Stay on top of expected vs. realised volumes, revenues and costs on a near real-time basis.
Analyse and factor risk into payer contracts
Automate value-at-risk calculations for all contractual agreements with commissioners.
Leverage machine learning algorithms
Build and maintain reliable, easy-to-access forecasts based on machine learning algorithms.
Produce timely, compliant reports with ease
Deliver periodic financial results that are fully compliant with national regulations.
Bring down costs by providing the right treatments, at the right time. We help you take the first step, starting with a critical assessment of treatment options and care processes.
Reduce variation among physicians and providers
Identify unwarranted variation in treatment decisions and care processes.
Deep-dive into data adjusted for meaningful differences
Compare disease-specific peer group selections adjusted for case-mix, patient characteristics and complexity scores.
Elevate commissioner contracts from volume- to value-based
Establish objective indicators to qualify for innovative value driven contracts with commissioners.
Benefits
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
Hosting
- Fully hosted and secure
- No need to rely on internal IT infrastructure and resources or invest in expensive infrastructure
Engagement
- Integrated analytics so less reliance on Trust-wide BI infrastructure
- Unlimited use
- Full access control
- “Live” system enables use in meetings
Pricing
- Fully inclusive annual subscription with no hidden extras
- All Technical Consulting support included
- Unlimited use included
- Analytics included
Speed
- Fast set up and model build
- Make changes live and use for discussion in meetings
NHSI submission requirements
- Easy visualisation of how your costs relate to NHSI categories
- Automated submission outputs
Implementation
Fast turnaround with limited input required from the Trust team
More value from Costing data
- Use costing data and methodology for budgeting, forecasting, and costing care pathways
- Fully integrated financial management control platform
System working and benchmarking
- Easily configured to support group working
- Integrated benchmarking to identify performance improvement opportunities
LOGEX’s Financial Solution team was able to:
- Develop a detailed financial forecast in a highly 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 two months, leveraging the team’s experience as well as LOGEX’s Financial Control platform
LOGEX’s support in conducting the financial stress test (Elandproef) significantly helped concretize discussions between the NVZ and ZN. However, these talks would likely have been severely more challenging without a solid analysis as a base.