November 8, 2017
By Brian Paradis
This article originally appeared in Becker’s Hospital Review at: https://www.beckershospitalreview.com/finance/making-your-revenue-cycle-work-for-you.html
With a variety of changes to U.S. healthcare on the horizon, health systems are in a hurry to prepare by making meaningful investments for the future. The challenge is to figure out where to allocate resources to produce the best return.
While often overlooked, investing in the optimization of revenue cycle could be the key to a system’s financial strength and resilience. As healthcare continues to face turbulence with payment models and incentives, leaders ought to first consider a new outlook on revenue cycle– starting with the notion that it is more than a process, but rather a strategic asset. With that in mind, there are a few steps that -health leaders can take to elevate their revenue cycle process to a strategic asset.
1. Engage the broader organization in the effort to be paid appropriately for the services they provide. This will require collaborating effectively with not only other C-level executives, but also teams of physicians, clinicians, marketing representatives and operational leaders. While revenue cycle is usually perceived as a necessary evil best left to finance, CEOs and senior leaders need to do their part to help different teams understand the important role they play in its efficiency. This knowledge will surely strengthen performance at the process level, but in the long-term, can pay off in the form of new models and methods of payment.
2. Identify niche services and technologies that increase yield, lower cost, or engage patients or members. Despite all the tools at our disposal today, accounts receivable often uses outdated methodologies for measuring success. Typically, health systems write accounts off after exhausting their in-house collections process, and then outsource to one or more agencies as a last resort. Meanwhile, there are increasingly sophisticated databases and algorithms that they can turn to instead for addressing zero-based accounts. There are even strategies for scoring accounts to determine which should be handled by an internal team, and which should be outsourced to an external collection agency. There is new technology driven service providers that identify payment sources for the uninsured at initial registration. All of this is to say that leaders should be taking advantage of innovations that have the potential to improve workflow, access additional information for decision making and lead to a reduction in the cost of collections. The ability to identify and deploy these tools will change the business of healthcare as we know it.
3. Develop referral retention strategies. Most health systems invest heavily in attracting new patients to their hospitals and related networks when they should be just as concerned with referring and retaining existing patients within their networks. This occurs for a host of different reasons: one being that we simply don’t operate the services those patients need. Other reasons include the challenge of not knowing where to refer existing patients, the difficulty of facilitating a handoff, and the lack of a follow up or tracking mechanism to measure success. Consider the “treat and street” mindset of an emergency room. Without a frictionless process and organizational accountability, there are likely referrals and, ultimately, potential revenue leaving your network from the emergency department. This is important in a volume-based world, but equally if not more so in a value-based world.
4. Experiment with optimizing new payment models and methods. Start small. Most organizations have existing incentive-based contracts, which are often not well understood or tracked at an operational level, and are reported only at contract renewals. This is a great place to start learning by having health systems identify a few other known methodologies and try them with their own employee health plan for select groups. This doesn’t have to be complicated or initially require expensive investments. Keep an open mind and continue to learn and absorb everything. This yields the best results when executed as an organization-wide effort, with those learnings being formally shared outside of the C-suite.
Health systems will see the most success when they begin investing more time and resources into transforming their revenue cycle into a fully developed asset. These steps can unlock the true potential of a health system by preparing it to achieve profitability in the volume world today, while also helping it progress with an eye toward the value-based future.
Brian Paradis is a senior partner at CSuite Solutions, a strategic advisory firm serving health system leaders across the U.S. Most recently, Paradis served as President and Chief Operating Officer of Florida Hospital’s Central Region and as the Chief Financial Officer for the Florida Division of Adventist Health Systems.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.