IPA Administrative Cost Reduction
IPA Operations were inefficient and not responsive to customers. Administrative costs were running 16% of revenue.
Operational staff was aligned by function. They could not understand the details of the health plan contracts. They also did not communicate with other departments. The operational disconnection created a significantly long time to resolve issues. It resulted in the identification of duplicate work efforts.
We placed staff from all areas, including Claims, Customer Service, and Medical Management on teams. The teams were aligned according to health plan. The teams were then trained on the details of the health plans they managed.
Staff was reduced, the accuracy of work was improved, and the time to resolution was improved. Overall administrative costs were reduced from 16% to 11% of revenue.
Completing managed care negotiations on time and securing great terms is often a struggle for hospitals and IPAs. Why? Because most management teams are already stretched thin, and it can be nearly impossible to find the time to research market rates and engage in effective negotiations. In the end, negotiations are often completed late and result in below-market rates.