Ouch! Taking the Axe For Poor Revenue Cycle Management
Shocking headline aside, what is the real story behind revcycleintelligence.com's recent article stating that 61% of CFOs expect to take the axe for poor revenue cycle management? We'll examine the issues at stake, but first, may we say as empathetically as possible, it doesn't have to be this way.
To try to provide a snapshot of what's really going on financially in US hospitals, Black Book surveyed 2,330 hospital CFOs, CIOs and business managers between June and October 2014. Forty percent self-identified as working in organizations that are insolvent or overextended, and the reasons were well laid out:
Patient responsibility has increased, not decreased, in spite of technological advances. Regardless of the emphasis on the tools, processes also need upgrading in order to achieve financial improvements.
"As healthcare organizations face a difficult time in 2015 with ICD-10, Stage 2 Meaningful Use, and the beginnings of penalties for non-participation in CMS quality programs, a hospital’s ability to implement and leverage next-gen RCM tools may be a deciding factor in which organizations remain in business just a few short years from now."
Wait. Financial success is certainly impacted by the need for next-gen tools including patient-estimation tools, EHRs and other software that will lead the charge to reducing costs.
However, there are immediate, less costly options available now to improve the solvency of a provider. We are proponents of closing the gaps on revenue leakage and improving work processes and efficiency. To this end, we believe that a process-oriented consulting team can help providers see significant improvements quickly.
But back to the tools. When a provider doesn't have immediate funds on hand for next-gen tools, improving cash collections can help.
In order to achieve immediate cash acceleration, begin with evaluating your self-pay strategy. Understand propensity to pay, practicing price transparency and collecting at the point of service are all sound practices. And, along this vein, taking opportunity to educate patients regarding their financial responsibility is a key principle that will assist in this admission and future admissions.
When the patient understands the bill, they are more likely to pay.
Healthcare isn't getting any easier. What is critical today, particularly for hospitals with tight margins, is finding a proven partner that can alleviate some revenue cycle stresses and help increase cash collections, both short- and long-term.