Budgeting, Forecasting and Financial Reporting for Healthcare Providers

Using BusinessObjects Planning and Consolidation

March 23, 2010

Budgeting, Forecasting and Financial Reporting for Healthcare Providers

Using BusinessObjects Planning and Consolidation

March 23, 2010

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AgendaAgenda

Introduction

Corporate Overview

Edgewater’s Healthcare Experience

Challenges in Today’s Healthcare Environment

SAP BusinessObjects Planning and Consolidation (BPC)

SAP BPC Live Product Demo

Q&A and Contact Information

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Consulting Firm Advisory Services Vertical Services Enterprise Applications Strategic Technical & Data Services

Founded in 1992 Headquartered in Wakefield, MA 335 Employees, 238 Consultants Large North American Footprint Focus on Middle and Global 2000 Market Publicly Traded (NASDAQ: EDGW)

Corporate Overview

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Edgewater Technology: Service OfferingsEdgewater Technology: Service Offerings

Edgewater’s integrated offerings bring the best of business, technical and data management expertise to solve client business problems

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Cancer Center: Enterprise DW for Personalized MedicineCancer Center: Enterprise DW for Personalized Medicine

The Need• Focus on Personalized Medicine

• Numerous, Diverse Source Systems

• Lack of Integration: Data, Process

• Needed a Strategy for Enterprise Data

The Solution• Integrated 14 Subject Areas

• Comprehensive Data Architecture

The Benefits• “360º View of the Patient”

• For-Profit Partnership

o Attracting $90M+ in Investments

o New Licensing Revenue Streams

Requirements: Clinical, Business, Technical, Data, Analytics

Roadmap & Plan

Technology Architecture

Vision

Current State Assessment Gap Analysis

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Healthcare Provider: Surgical Analytics PlatformHealthcare Provider: Surgical Analytics Platform

The Need• Needed an Enterprise Data Strategy to Leverage

Anticipated EMR Implementation

• Identified an Initial Focus Area as a Proof-of-Concept for the Enterprise Strategy

The Solution• Surgical Services Analytics Platform

• Integrated 4 Application Systems from 7 Hospital Sites

The Benefits• Enables Unified Clinical, Operational, Financial Views

• Projected Savings of $5M+ in First Year of Use

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Healthcare Provider: Surgical Analytics PlatformHealthcare Provider: Surgical Analytics Platform

WHERE are we ACHIEVING our QUALITY GOALS across SERVICE LINES?

Are our RESOURCES DEPLOYED to SATIFSY the PATIENT MIX?

What is the PROFITABILITY across SURGERY for the ENTEPRISE for THIS YEAR vs. LAST YEAR?

ExecutiveUser

Functional User

Power User

Highly Aggregated

More Detail

Complete Raw Data

• Graphical Display, Dashboards, Interactive

• Aggregated Data

• Controlled Drill Down

• Standard & Ad hoc Reporting

- Parameter-Driven by Users at Run-Time

- Sorting, Selection, Filtering, Drill-Down

• Utilizing Standard Functions and Models

• Direct Access to Detailed Raw Data

• Model Development & Deployment

Traceability Consistency

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Healthcare Provider: Service Line Definition & ManagementHealthcare Provider: Service Line Definition & Management

The Need• Needed Integrated Strategy and Platform for Analytics,

Supporting Both Health System and Hospitals

• Needed Standard Service Line Definitions & Performance Metrics

The Solution• Multi-Tiered Analytics Data Architecture and Platform

• Initial Service Lines, Configurable Business Rules, Market and Benchmark Data, Organizational Assessment

The Benefits• Improved Service Line Analytics, Performance Metrics,

Anticipating Unified Clinical, Operational, Financial Views

• Shorten Time to Decision, Anticipated Improvements Across Continuum of Multiple Care Settings

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Healthcare Analytics Platforms: Implementation SpectrumHealthcare Analytics Platforms: Implementation Spectrum

BI Analytics FastTrack

Data Quality or Readiness Assessment

Enterprise / Subject Area Data Strategy

Focused Data Mart or Pilot

EDW Solution

Enterprise / Subject Area

ImplementationValue &

Impact to the Organization

Embedded & Predictive Analytics

Quality of Care

Surgical Analytics

Service Line Management

Financial & Strategic Planning

Utilization & Cost

CRM / Marketing

Level of Data Integration

Best Practice Alerts

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Challenges Facing Today’s Healthcare ProvidersChallenges Facing Today’s Healthcare Providers

• Improved patient care and satisfaction• Improved quality and accessibility of medical care• Better reporting and improved tracking – increasing transparency• Need to reduce and minimize medical errors

Tight competition and customer demand for high quality care

• Better financial and operating control• Streamlined administration, ancillary and critical support activities• Consolidated back office systems for better real-time patient information• Focus on service line management

Rising operating costs

• Need to align with key cost and margin trends by clinical service line• Balance costs due to evolving operating environment, new technology adoption and quality of care given diminishing reimbursement trends• Respond to changing demographics and plan for future reimbursements

Reduction in reimbursement from public & private payers

• Automate billing and claims processing activities while adhering to compliance mandates such as HIPAA• Increased reporting of safety and compliance with quality standards

Increased regulatory requirements

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SAP BusinessObjects Planning and Consolidation Best in ClassSAP BusinessObjects Planning and Consolidation Best in Class

Best in

Class

•Industry leading Excel and Microsoft Office Integration

•Packaged Business Process Flows

•Strong multidimensional capabilities

Ease of Use

•Guided Action Panes

•Finance User owned and managed

•Unified Planning, Consolidations, and Reporting

Most Advance

d Capabilities

•Automated Variance Analysis

•Structured and Unstructured Data

•Predictive Analytics

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SAP BusinessObjects Planning and ConsolidationSAP BusinessObjects Planning and Consolidation

Most familiar and easiest to use Enables rapid adoption by leveraging

existing Microsoft Office tools (e.g. Excel) and web browsers accessing a central database

Financed owned and managed Report and input wizard templates

Pre-defined process flows Configurable business process flows guide

users and drive process consistency

Truly unified solution Single, integrated application reduces

maintenance, improves data integrity, and simplifies deployment while enabling flexible planning & consolidation functions

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An “Implementation Accelerator” DefinedAn “Implementation Accelerator” Defined

Data Model for GL, Payroll, Patient Centric imports Pre-built Business Rules/Logic and defined Business Process Flows Key Input Schedules and Management Reports

Deliverables

Incorporates ‘best practice’ approaches Reduces the implementation time Reduces the implementation cost

Benefits

A pre-configuration of SAP BusinessObjects Planning & Consolidations

Supports hospital budgeting and planning processes Design is a collaboration with existing customers and in-house expertise

Definition

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How SAP streamlines the planning process for healthcare providersHow SAP streamlines the planning process for healthcare providers

Chief Financial OfficerChief Financial OfficerFinance

Manager of ICU

Nursing

Manager of X-RayAncillary

Reimbursement Manager

Reimbursement

• Leverages a familiar interface - Microsoft Office (Excel, Work, Ppt)• Context sensitive “action panes” make navigation easy• Define customer menu & business process flows

A solution designed for the end-userEase-of-use features promote end-user adoption

A configurable, scalable planning platformCan grow and evolve as your planning needs change• Supports Long Range & Capital Planning, Forecasting & Budgeting• Templates-based approach addresses unique modeling requirements• Industry standard technologies – enterprise scalability, web access

With Healthcare Methodologies built-inReduces the cost & time to implement• Configured to streamline hospital budgeting• Data model, pre-configured templates, and pre-built reports• Integrates Volume, Workload, Reimbursement and Expense plans

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Budgeting & Planning for Healthcare:Methodologies OverviewBudgeting & Planning for Healthcare:Methodologies Overview

FinancialReports

BusinessPlanning &

Consolidations

ReimbursementModeling

Global Assumptions

DepartmentLevel Planning

Payroll

GL/ERP

DecisionSupport

Data Imports

• Workload

• Inflation• Efficiency

• Admissions

• Visits• Pt Days

2

4

3

5

1

AncillaryDepartments

RoutineDepartments

AdministrativeDepartments

Outpatient

Inpatient

Administrative

Multiple VersionsMultiple Passes

Pre-configured modeling “views”

or “templates”

Pre-configured modeling “views”

or “templates”

Updates to Gross Revenue

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Departmental Budgeting:

A templates-based approachDepartmental Budgeting:

A templates-based approach

• Primary driver is patient days• Operations are 24/7 (shift based)• Must align labor plans to census levels

• Patient days ‘linked’ to Global Stats• Staffing Grid helps set labor requirements

according to ADC targets• Projection methods for non-labor:

•Variable Method •Input Total •Input Monthly •Fixed and allocated totals

• Refine workload given top-down targets• Ability to refine labor given the impact of

volume changes on dept workload

• Ability to assess volume impact on plan• Set labor plan by skill mix, revisions made

against historical run rates• Incorporate benchmarks• Projection methods for non-labor:

•Variable Method •Input Total •Input Monthly •Fixed and allocated totals

• Require more simplified views• Little ‘volume impact’ on plan• A ‘bottom-up’ approach

• Labor plans set by Employee:•Add new/terminate •Transfer between departments

• Planning methods for non-labor:•Input Total (choose spread)•Input Monthly •Fixed (allocated totals)

Nursing Ancillary Administrative

Planning Requirements: Planning Requirements: Planning Requirements:

Points-of-control: Points-of-control: Points-of-control:

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SAP BPC Live Product DemoSAP BPC Live Product DemoR

epo

rt Distribute plans and analyze variances to drive re-forecasts

An

alyz

e

Consolidate and model multiple scenarios

Co

llect

Collaboratively create plans and forecasts

Co

mm

un

icat

e

Communicate top down targets, timelines, and guidelines

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SummarySummary

Why Now?

• Today’s market demands quicker and more accurate data

• Spreadsheets are error prone and require too much maintenance

• Budgeting, Consolidations, and Reporting must be integrated

Why SAP BPC?

• Built –in Healthcare best practice

• Benefits of Excel without the downside

• Easiest to implement, learn, and maintain

Why Edgewater?

• Leverage our strong EPM expertise and complementary Healthcare knowledge

• Proven engagement models – partner, consultant, technical, organizational

• Enable client success – excellent client references

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Thank You for Joining UsThank You for Joining Us

To schedule a live demonstration, or for more information about Edgewater Technology and our Healthcare Practice, contact:

Maury DePalo Jennifer LyDirector, Healthcare Practice BPC Project Lead781-246-3343 714-514-4600mdepalo@edgewater.com jly@edgewater.com

Q & A