As healthcare providers strain under intensifying margin pressure, revenue cycle optimization has emerged as a particularly vexing challenge. Finalytics™ has developed technology to help. Finalytics is a healthcare fintech company offering its patented Flex™ solution to modernize the insurance revenue cycle by monetizing outstanding insurance claims. With Flex, accounts receivable are paid quickly and efficiently. Flex also offers clients a new way of tracking financial performance using one simple metric: WADIO.
What is 'WADIO' and why is it important?
When calculating a simple average from a data set, all numbers are treated equally and assigned equal weight. Days Insurance Outstanding (DIO) is a simple average that can be a distorted metric because it does not take into consideration the value of each claim.
Finalytics recognized the deficiencies in measuring healthcare accounts receivable and has developed a new metric capable of providing superior insight into the real financial value of aged Accounts Receivable (A/R) as well as the time-performance of payers. Weighted Average Days Insurance Outstanding (WADIO) is a financial metric that creates an accurate picture of providers' risk from all outstanding insurance claims. It is calculated by multiplying the number of days each claim has been outstanding by its receivable amount, adding up the results for all outstanding claims, and then dividing by the sum of the receivable amount for all claims. By considering the length of time that a claim has been outstanding in addition to the claim amount, providers have a more accurate picture of their risk. They can make informed decisions by identifying trends and adjusting their billing strategies accordingly. This ensures they can maintain profitable practices while providing their patients with the care they need.
Predictive and scalable metrics are difficult to identify, and WADIO is a simple way to track performance. Finalytics understands that providers need to see the real financial value of all accounts receivable, so we incorporated WADIO as our primary metric in Flex. With Flex, providers significantly streamline the insurance revenue cycle. Flex is the only automated, end-to-end platform that monetizes insurance claims in three days, reducing WADIO by about 90 percent.
WADIO vs DIO — an example
Weighted averages provide more accurate insights, and those insights help providers run their practices more efficiently.
Example
There are two claims in the system: $10 that was paid after 20 days, and $10,000 paid after 140 days. A DIO calculation will tell us the average days outstanding is 80. However, by calculating WADIO, our result is a whopping 139.9 days. This gives us a much more accurate representation of how the bulk of our revenue is flowing into our practice, and it helps us prioritize our workflow.
WADIO FOR THE WIN
At Finalytics, we know that providers operate on thin margins. We're here to help.
To learn more, visit flexbyfinalytics.com or reach out to info@finalytics.com.