Improving Financial Performance by Modeling and Analysis of Radiology Procedure Scheduling at a Large Community Hospital

Radiology tests, such as MRI, CT-scan, X-ray and ultrasound, are cost intensive and insurance pre-approvals are necessary to get reimbursement. In some cases, tests may be denied for payments by insurance companies due to lack of pre-approvals, inaccurate or missing necessary information. This can lead to substantial revenue losses for the hospital. In this paper, we present a simulation study of a centralized scheduling process for outpatient radiology tests at a large community hospital (Central Baptist Hospital in Lexington, Kentucky). Based on analysis of the central scheduling process, a simulation model of information flow in the process has been developed. Using such a model, the root causes of financial losses associated with errors and omissions in this process were identified and analyzed, and their impacts were quantified. In addition, “what-if” analysis was conducted to identify potential process improvement strategies in the form of recommendations to the hospital leadership. Such a model provides a quantitative tool for continuous improvement and process control in radiology outpatient test scheduling process to reduce financial losses associated with process error. This method of analysis is also applicable to other departments in the hospital.