If we were to pinpoint one crucial statistic that’s impactful in (nearly) every payer/provider contracting scenario, we’d pick percent of negotiated rate change over time. Lots of data is nice for data analysts, but if you’re walking into a negotiation with five minutes to prepare or staring down the barrel of your quarterly earnings report, you need specific, relevant rates and minimal noise. You need actionable data. You need a hero history.
In this blog, we’ll explain why we think percent of rate change over time is the MVP of price transparency data and exactly how you can use it during negotiations.
Knowing where something is right now is nice, knowing how it got there is better
Before price transparency data, we had no idea what the negotiated rate was for any item or service, let alone how rates were changing over time. Thanks to price transparency regulation circa 2021 and onwards, we can now look at healthcare costs over time. If having the ability to utilize historical data for trends, projections, and general pontifications isn’t your idea of a good time, we disagree on the definition of a good time!
We download, store, and parse all data that has been posted since the dawn of price transparency regulations. The legacy storage and continued regular data refreshes ensure you get the most accurate, holistic view of the data regardless of what date range you’re interested in.
Historical rate changes highlight what’s possible based on the past
Say you’re going into negotiations with your biggest payer or health system. Access to historical rates allows you to calculate the exact percent of rate change year over year. And it’s not just your own historical rates we’re talking about either, because we know there’s a lot of valuable insight to be gained from the results of other hospital or payer negotiations.
Maybe you want to explore the outcomes of a specific payer/provider negotiation. You can run a report in Analyze and see that Hospital A had an 11% increase in the inpatient setting and a 4% increase in the outpatient setting.
You don’t need to know that payer/provider's exact rate before and after. You don’t need to look at all the rates for that code today and run a big report, gather your data analysis team, and wait for a PowerPoint to hit your inbox. Instead, you’re laser-focused on the one statistic that’ll drastically inform what you ask for and (hopefully) what you get.
You can also leverage historical data to tackle precise, needle-moving initiatives
Welcome to the Advanced portion of this lesson. Cookies and water are on the table by the door. After leveraging historical data for negotiations at large, you can begin to leverage it for precise, needle-moving initiatives.
If you have a set of shoppable services or departments with very competitive rates, you can use historical data to monitor those same services’ rates at other hospitals. Over time, are your rates holding steady? Do other hospitals appear to be targeting the same shoppable services for their own competitive strategy as well? Historical rates offer a level of business savvy when making decisions on the rate you care about the most.
History, you the real MVP
There are countless metrics one could explore to glean insights prior to managed care negotiations. If you’re looking to identify The One to grab when there isn’t a moment to spare on prep strategy, percent of rate change over time is your best bet. Use it to run a quick search on YoY increases or do some extra digging to find advanced-level opportunities for growth. Whatever you do, just remember: If we don’t learn from history we’re doomed to repeat it!
Hunting for more advanced level uses of historical data? Drop us a line! We’re happy to help.