Challenge
A provider of risk-adjustment/HEDIS chart retrieval, coding/abstraction, and analytics was faced with significant declines in margins due to reduced demand and increased competition.
The company sought to improve contribution margin by re-engineering its operating strategy and optimizing staffing and productivity.
Approach
- Deployed Economic Activity Analysis to measure activities, times, and costs, mining “touchpoints” of 3.2 million charts through the value chain to develop a view of marginal cost and utilization
- Re-engineered model to create dynamic labor pools to match monthly demand and capitalize on labor cost arbitrage
- Analyzed internal and external data sources to develop competitive pricing data sets, compute customer-level price elasticities, and pinpoint where economic loss was occurring
Results
Transformed operating strategy resulted in a 66% increase in resource utilization across the production workforce
Improvements yielded a 23% increase in contribution margin and created a sustainable path for profitable production
Implemented a new set of operating procedures and metrics to manage optimal staffing and drive-up productivity levels