Error in characteristic derivation at the level of the invoice item when re

[Former Member]

We are implementing the SAP project for just one small private medical Center which includes mainly outpatient cases in different medical Clinics (different departments in the same medical center) .For example: Radiology center/department, cardiology center Obstetrics center and so on.

We have defined each center/department as a different profit center.

Some of departments are subdivided to several medical organizational units; each unit represents a different cost center at the same profit center/department.

A case-based order (internal CO orders relating to a patientu2019s case) is created in the background when the patient is admitted

The same patient can get services from few organizational units (in ISH)/cost centers at the same visit/case and that's why it is important to collect revenue and costs at the same case based order. The revenue is posted to the case base order by using billing in the ISH module and the costs by internal activity allocation.

We have assigned IS-H services to activity types in Controlling; the services transfer to the case based order. CO-relevant services are posted from IS-H to cost centers in CO and within internal activity allocation, allocate them to the case-based order.

For example:

X ray service assigned to Technician minutes activity type.

Each X Ray service takes 20 minutes of Technician (Qty Cnv Facto=20 MIN)

The service transfer is preformed automatically at final billing.

We have implemented Case Costing Level 2 in order to analyze case costs in CO-PA.

We want to have the ability to derive the profitability analysis characteristics at the level of a line item in the case, for example: we want to define a service or the preformed organizational unit as a characteristic in PA.

We are not sure what the best feasible solution for this requirement is.

We investigated few alternatives:

1. We have defined the case based order as real order with a settlement rule to a profitability segment. Revenue and Costs are posted to the cased based order and then settled to the profitability analysis. We eliminated this alternative because we didn't find any way to distribute revenue and case costs to PA between the different "line item characteristics" (for example: different services in the case).

2. After eliminating the first alternative we tried to change the solution.

We have dealt with revenue and costs separately.

1. Revenue: In the "configure revenue accounting" We flagged the Post to Prof.Segment checkbox, the patient billing module attempts to determine a profitability segment in CO for each invoice item and to post the revenue to it. The system determines the profitability segment using the characteristics of the patient and case data we defined.

We are using ISH_CHARACTERISTIC_* functions for characteristic derivation but we couldn't derive user defined characteristics which are defined at the level of the invoice item. (For example: billable service in the case or preformed organizational unit for each service.).We didn't succeed to it by using the ISH_CHARACTERISTIC_* functions.

2. Costs:

We tried to posts case costs (internal activity allocation) directly to profitability analysis, this way we hope to have the ability to derive characteristic of the line item.

We know that when we use transaction: KB21N for internal activity allocation and we define two receivers, internal order and profitability segment- In case the order will be statistical the true posting will be to profitability analysis segment.

Therefore we have defined the case based order as statistical order.

We want to intervene in the automatic creation of account assignment lines by enhancement NHCO0001 IS-H: Create account asgmt. line during CO transfer.

The transfer program creates for CO-relevant services account assignment lines for Assignment rules.

But-We didn't find any way to do it, because the profitability segment object is missing in enhancement NHCO0001.

As an alternative we tried to use User-Exit in the profitability analysis valuation (transaction: ke4u) but also with no success. (Enhancement COPA0002).

Could you Please advice what to do,I didn't succeed in my ideas and investigations.

Thanks

Yael Jacobi

Controlling Consultant

[Claudius]

Hi Yael,

if I understand you right you are looking for a profitability analysis on service level rather than case-level.

Two questions:

First, I assume that you can bill (i.e. assign revenue) per single service. Do you have complex pricing rules for such services (like the x-ray in your example) or are the pricing rules rather simple?

Second in regards to cost per service. I understand you don't measure relevant actual values (e.g. technician times) per service, but only calculate based on a fixed rule, right?

Regards

Claudius

[Former Member]

Dear Claudius,

You understand correctly, I am looking for a profitability analysis on service level rather than case-level.

1. Yes, I can Bill per single service. We don't have complex pricing rules for such services.

2. Yes, we don't measure relevant actual values per service, but only calculate based on a fixed rule.

Best Regards,

Yael

[Claudius]

Yael,

ok, but in case you are not measuring any actual cost relevant values what kind of outcomes do you expect from your profibility analysis on service-level?

E.g. you "sell" your x-ray service at $40 and based on your cost calculation you "know" that your internal cost (e.g. technician time) on average is $20, then what other outcome then the rather simple math can you expect? You are assuming that the internal cost to render the service is not depending on any characteristic of the case.

Regards

Claudius

[Former Member]

Dear Claudius,

I will describe the process again because I want to be sure that we understand each other.

The case costs from services are posted to the case based order.

We have assigned IS-H services to activity types in Controlling; the services transfer to the case based order. CO-relevant services are posted from IS-H to cost centers in CO and within internal activity allocation, allocate them to the case-based order.

The costs are allocated by means of internal activity allocation. The responsible cost center (assigned to the performing organization unit) is credited and the case based order is debited. The amount is calculated as follows: The fix activity type price which is defined in the sender cost center multiple by the activity type quantity.

For example:

X ray service assigned to Technician minutes activity type.

Each X ray service in the radiology department takes 20 minutes of Technician (Qty conversion Factor=20 MIN)

Activity type (Technician MIN) price in the radiology center=1 USD.

The radiology department is credited and the case is debited by: 20MIN* 1=20 USD.

The price is fixed but the quantity is actual. I expect to get the profitability of an X ray service (Revenue and costs). The internal cost to render the service depends on the quantity of services related to the case.

[Claudius]

Hi Yael,

thank you for providing additional information. I think I understand the main flow. However, what I may miss is the following: if you say that ultimately you do want to find out whether the service (as your "product") e.g. the x-ray is profitable yes or no and you have a fixed external price (revenue) on the one hand and on the other hand calculate/estimate the cost to render an individual service via a fixed rule which seems to be NOT depending on any case-specific data, isn't then the profit per service simply external revenue - internal cost and you multiply with the total amount of services which you have rendered during the observation period?

Or can you bill for the service (x-ray in your example) only once per case and so the "case profitability" would decrease if for whatever reason you had to perform multiple x-rays per case? And again what would be result of such analysis - not to perform services inhouse anymore but rather outsource? Make clinicians aware of potential avoidable services?

Another thing would be to analyze profitability on (aggregated) case-level (which I think many customers do) based on certain clusters (e.g. DRG-like groupings, other case-related data) and then drill down to areas which show unexpected results (e.g. loss or low profit) and then analyze the reasons. Typically the reasons for bad results can be very different ranging from unfavorable case mix, outliers, too high cost etc.

Regards

Claudius

[Former Member]

Dear Claudius,

I will give you an example.

We want to have the ability to analyze the profitability from x-rays services (in the radiology department) sold to insurance provider X and that are given to male patients at the age group between 30-40 (who have Doctor .Peter Shiffer as the referring physician etcu2026..).

Revenue-The service price is not fix, we sell it at different prices for each customer/insurance provider/self payer u2026.(and the insurance provider is a case characteristicu2026.).

Costs-Also the activity price is changed between the organizational units which perform the service. For example a physician minute cost 4 USD in the cardiology center and 3 USD in the Obstetrics center.

Best Regards,

Yael

[Claudius]

Hi Yael,

ok, assuming you would get all this information and we would find out that the profitability for the x-ray is "42" for insurance provider X in the specific age group - what would we do with this information?

In other words I am not sure I understand how you could really "control" your business with such analysis. And maybe you can achieve the same business goal via other means.

Still I would assume that you could use the system to perform such kind of "product cost accounting" - the trick will be to find a suitable object in the system, because our internal order clearly represents the patient case, so the standard IS-H CO interface assumes that the complete case is seen as the "product" of the healthcare provider organization.

I hope that other people might join this conversation and maybe have additional hints. In regards to the more technical aspects in regards to the user exits I understand that you have also issued a service ticket. So let's see whether you get some help from there as well.

Best regards

Claudius

[Former Member]

HI Claudius

Thanks for your answer, I will try to discuss it again with my customer to understand weather he really needs/wants a profitability analysis on service level.

I processed also an inquiry within the Service Remote Consulting according , I will let you know their answer as well.

I have additional issue to discuss with you , please let me know wheatear you can help me.

There are internal service sales between different departments in the same medical center. For example: Radiology center/department sells X-rays services for the cardiology center. We need the ability to sell a service to a different department in a different price than to an external payer/customer/insurance provider.

Is it possible to implement profit center transfer prices along with the ISH_CO integration?,

How is it getting along with the posting of internal activity allocation when services transfer to Controlling?

At standard the costs are allocated (by means of internal activity allocation) between profit centers. The responsible cost center (assigned to the performing organization unit) is credited and the case based order (which is assigned to different profit center) is debited.

Is it possible to implement transfer prices in case the performing organizational units are connected to the same profit center? (because some of departments are subdivided to several medical organizational units; and each unit represents a different cost center at the same profit center/department).

Do you recommend defining a different profit center also for each sub-department?

Do you have any other proposed solution for this issue?.

Thanks,

Yael

[Claudius]

Hi Yael,

let's keep this thread focused on the first topic - you have [posted this question already|;, right?

Regards

Claudius

[Former Member]

Yes, I thought that maybe you have any idea regarding the other

issue, and maybe you haven't seen my message.

Any way,I will update you regarding the first message.

Thanks

Best Regards,

Yael