Know Your Costs

Service Line Margin Tool

Gain a better understanding of your costs to get adequate payment for your services.

Connie Ouellette, CPA

BerryDunn's tool can help you analyze operating margins by cost center or service line, based on your operations and input.

The healthcare industry is one of few industries that does not know what it costs to provide services. We can help you gain insight into your costs.

Improving or eliminating service line costs is crucial in adapting to healthcare payment reform. You need to know your performance drivers and be able to associate the correct costs and activities with each service line. BerryDunn healthcare experts can help you gain a better understanding of your costs and where you should target improving or eliminating services. 

Do you know your profitability centers?

Understanding the costs and activities associated with each service line gives you the ability to deal with the alternative payment mechanisms facing healthcare providers. 

Gain confidence in your cost determination.

To formalize the cost reporting technique and provide a time and cost effective methodology for analyzing service line margins, we've created a tool that analyzes your hospital's operating margins by cost center or service line, based on your operations and input. We work with your most recent cost report, trial balance, payer mix, and insurance contract terms, to assign and allocate costs and compute net reimbursement by service line.

Once you've established the parameters for cost allocation and reimbursement, you can update the tool by importing your latest trial balance. It requires only a few hours each time to update the analysis, saving you the additional FTEs associated with costing programs.

Let us help your organization:

  • Develop a baseline for monitoring departmental contribution margins
  • Understand which services are profitable
  • Analyze particular costs within a service line or practice pattern
  • Align cost reporting within your departmental financial reporting
  • Start to look at procedures within each service line for profitability
  • Aide in discussions with your Board about your programs
  • Gain control in payment reform mechanisms