Case Studies
The Challenge:
Facing a significant potential operating deficit, BDC Advisors’ client enacted a set of revenue enhancement and cost reduction initiatives. Among the revenue enhancement initiatives, we were challenged to take bold action in the local market to radically restructure payer contracts and increase revenues.
BDC Advisors has significant experience in developing and implementing payer strategies. We customize our payer strategies based on individual market circumstances and facts. For a western academic medical center, we directed an effort to exit capitated hospital contracts and renegotiate all payer contracts. By analyzing the profiles of payers and our client’s current contract experience with them (e.g., effective payment levels based on collected revenue versus contracted expectations, patient volume, and market share by strategic clinical area, profitability by payer), identifying key points of negotiating leverage (e.g., our client’s indispensability to payers, payer compliance, and market-competitive rate realization by service), and developing tactical plans by payer (e.g., grounds for re-opening contract, targeted rate realization, employee, patient, and physician implications), our efforts resulted in annual rate increases of over $27 million and a loss of only 5,000 out of 50,000 HMO members.