Big Data Can Make a Big Difference for Academic Medical Centers

Updated on July 24, 2018

By Todd Langer

As healthcare providers know, one of the biggest industry trends is nonpayment. Patients are shouldering a heavier share of the costs of medical treatment these days and many are buckling under the weight of such payments.

A recent TransUnion Healthcare study, showed that 68 percent of patients failed to fully pay off medical bill balances in 2016, up from 53 percent in 2015. This number is expected to climb to 95 percent by 2020. Of the 14 percent of hospital bills above $3,000, almost all weren’t paid in full in 2016.

This trend — driven by higher deductibles — is bad news for all healthcare providers but is hitting academic medical centers (AMCs) particularly hard. Such facilities process large volumes of complex, expensive medical claims. Though AMCs bolster their revenue with government subsidies, grants and charitable donations, their share from direct patient care is threatened by the same trends affecting other providers in the industry. Those including the fact that patients are visiting hospitals less and, in aggregate, often aren’t paying off their full balances.

This would seem to be a losing battle for AMCs except for one thing: New tools and technologies are giving them the means to recoup payments that are causing revenue leakage. In particular, artificial intelligence and big data can help identify such opportunities. We will explore the effects of AI and big data below.

AMCs Fight Against Lost Revenue

For AMCs, revenue leakage has many causes. Insurance data may not be provided at registration, policy numbers may be missing or incorrect and claims denials can cause such leaks.

According to The Advisory Board Company, more than 3 percent of net patient revenue is lost in denials. But two-thirds of those denials are recoverable and 90 percent are preventable.

A U.S. Government Accountability Office study reported that as many as one in four claims is denied – a statistic that is not surprising considering the constantly changing insurance carrier landscape. As providers are forced to choose between getting new bills out the door and evaluating whether old bills have been paid, recovering receivables has become a significant challenge.

Cost of care and patients’ inability to pay also play a significant role in revenue leakage – for AMCs and other providers alike — and this is likely just the beginning. The patient is currently responsible for 30 percent of the average healthcare bill and patient self-pay is expected to increase at a compound annual growth rate (CAGR) of 10 percent — from $47 billion in 2015 to $68 billion by 2019.

AMCs aren’t alone in facing those challenges. In a recent statement released by the Association of American Medical Colleges, the organization pledged that America’s teaching hospitals will continue to care for patients who may not have the ability to pay for care. That means they will be forced to absorb the resulting uncompensated care costs, threatening their ability to support and advance their research and education missions.

Big data stems the bleeding

That might seem an untenable position until you consider the potential of Big Data and AI. Both are revolutionizing every industry right now, and its effects on healthcare to date have centered on wearable technology and preventative care. There is also an opportunity for big data and AI to help hospitals and academic medical centers in particular make ends meet.

Analyses of patient data is helping AMCs manage the revenue cycle by controlling costs, improving profits and cutting down on lost revenue and wasted overhead. Through the use of big data technologies, hospitals and other healthcare facilities have been able to reduce costs by more than 10% and grow revenue by 30 percent.

In particular, an intelligent analysis of data can reexamine atypical billing requirements, identify hard-to-find insurance coverage and manage timing delays and changes in payer eligibility databases.

Such tools may not be a panacea but they can go a long way toward helping AMCs stop revenue leakage. Since AMCs play such a central role, that’s good news for anyone who cares about the U.S. healthcare system.

Todd Langer, VP of TransUnion Healthcare Ops, has a B.S. in accounting from Brooklyn College and a J.D. from Brooklyn Law School. He is certified by HFMA in patient accounts and managed care and has more than 40 years of experience in Healthcare billing, finance and administration. To learn more please visit

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The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.