Dynamic market forces emanating from the changing U.S. regulatory landscape are transforming the healthcare industry's traditional volume-based care reimbursement model to one centered around value and quality outcomes. This shift to value-based care is impacting all stakeholders along the value chain — perhaps none more so than hospitals and health systems, many of which are discovering that they need to modernize their revenue cycle capabilities to mitigate reimbursement risk and position themselves for growth.
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Forward-thinking healthcare providers are already evaluating how to transform their revenue cycle operating model and customer engagement strategy using digital enablers and advanced analytics to address the challenges introduced by VBC-driven market trends of consumerism and competition. With regulatory and market conditions expected to remain in flux, it may be time for your organization to do the same.
Consumerism
The healthcare industry is encountering growing consumerism — as evidenced by more informed, active, and connected healthcare customers. This requires providers to attract and retain patients in new and innovative ways — especially as provider financial rewards under value-based payment contracts are increasingly tied to outcomes and patient engagement. Fueling the increase in consumerism, healthcare costs continue to shift to the patient, most noticeably by the increase in high-deductible health plans and rising out-of-pocket expenses. This has made many healthcare consumers more cost-conscious, driven their demands for more information and choices, and modified their decision-making process. Effective customer relationship management is more important than ever and, therefore, should be a focus area for planned revenue cycle capability enhancements, especially in the areas of:
- Retail-like consumer engagement. Emulating the retail industry by adopting a consumer-centric focus positions healthcare providers to improve transparency, enhance service access and transform their customer engagement capabilities. For many providers, this will require investments in digital patient engagement, mobile health solutions and other consumer-facing and self-service technologies that enable transparency and efficiency.
- Patient acquisition and experience. Using digital platforms to deliver and manage a consistent experience across the entire patient journey, from acquisition through care delivery, enabling highly customized interactions that promote customer relationship beyond a single encounter and improve customer "stickiness" and brand loyalty.
- Patient receivable management. Addressing the continued growth in bad debt and patient receivables is critical for providers' long-term financial health. As costs continue to shift to the consumer and the patient portion of health systems' receivable continues to grow, effective management of the patient receivable asset becomes increasingly critical to preserving margin. Cognitive analytics deployed across the end-to-end revenue cycle can help protect reimbursement by predicting payment on accounts based on customer-specific economic conditions and behavior patterns.
Competition
Nontraditional players are driving competition in the healthcare market. Services provision is shifting to unconventional venues and mediums (i.e., retail clinics, physician e-visits, mobile scheduling, prescription refills and online portals) and technologically nimble new entrants are gaining ground with younger consumers in search of a more personalized health care experience. Meanwhile, increasing infrastructure, operating and compliance costs are driving consolidation among hospitals, physician practices and health systems as providers search for scale to leverage operating expenses across a wider base. Enhanced revenue cycle capabilities will be essential to address continuing and emerging competition and convergence in a value-based environment, including:
- Radical cost reduction. Adopting disruptive business models and innovative robotic and cognitive processing automation capabilities can drive radical cost reduction and transformation toward a more efficient and nimble revenue cycle operating model. By undergoing radical cost reduction within revenue cycle, providers free up resources that could be reinvested in innovation and growth initiatives that enhance strategic position in the competitive healthcare market.
- Enterprise clinical and financial integration. Highly predictable and reliable care coupled with clinical quality and financial risk management across the delivery ecosystem is a lynchpin to success under value-based care. Integration of the clinical enterprise and financial operations enabled by digital and analytical capabilities in areas such as clinical documentation, coding and charge capture will drive success across the revenue cycle.
- Talent strategy innovation. Evolving revenue cycle capabilities calls for a shift toward innovative talent strategies to acquire and develop the skill sets needed to drive success in a value-based market. Employees will likely have to strengthen customer relationship management, conduct in-depth data analyses and be agile as process changes are driven by patient insights.
Consumerism and competition present hospitals and health systems with opportunities to introduce new methods and technologies to innovate care delivery, communicate effectively with all stakeholders, and optimize revenue cycle processes. Many providers are now pursuing digital enablers and analytical capabilities to get ahead, and stay ahead, of the challenges introduced by consumerism and competition as they evolve toward VBC. Three key focus areas of digital and analytical enablement for revenue cycle are:
- Digital enablement. Maintaining a competitive edge means building a digital enterprise that creates incremental value by taking full advantage of social, mobile, web, cloud and analytic technologies. Revenue cycle processes are prime candidates for digital transformation. For example, Cognitive Computing (e.g., machine learning, natural language processing, and computer vision) can simulate perceptual and cognitive skills to perform tasks only humans used to be able to do, thus helping improve customer engagement and brand loyalty, and optimizing efficiency of revenue cycle performance and operating model cost structure.
- Robotic and cognitive automation. Emerging technologies in the robot-led automation space span the spectrum from basic automation to advanced artificial intelligence technologies with cognitive abilities. One solution, robotic processing automation capabilities — computer software or a "robot" that replicates the actions of a human being interacting with the user interface of a computer system — can remove costs from the revenue cycle and create value by standardizing revenue cycle transaction processing functions, improving throughput, providing flexibility and scalability, improving data accuracy and creating operational capacity to focus on higher-value activities.
- System optimization and analytics. Optimizing revenue cycle performance typically involves improving workflows/work queues, technology, reporting and automating processes. Predictive and cognitive analytics can integrate clinical and financial data to drive differentiated margin performance via solutions in areas such as:
- Patient access and processing: Utilize enhanced capabilities to determine patient financial responsibility prior to care and increase point-of-service collection; integrate operations across physician clinics and hospitals for activities such as patient scheduling, registration and financial clearance.
- Revenue integrity: Improve clinical workflows, revenue capture documentation and reconciliation; enhance clinical staff training, focusing on the impact of inadequate charge capture; develop a sustainable revenue integrity infrastructure that is agile enough to flex with changing reimbursement models.
- Accounts receivable and cash management: Prioritize and automate collections and payment-posting work flows; develop robust follow-up and denials and payment variancemanagement processes and tools, including optimizingsystem automation.
- Finance integration: Manage connectivity and integration with financial reporting systems and operations that is integrated with clinical operations and the revenue cycle delivery model.
Smart first steps to digitize your revenue cycle
With value-based payment models taking center stage in the transforming U.S. healthcare industry, digitizing provider revenue cycle capabilities is becoming a growing imperative. Taking the following steps can help put your organization on the path to capture more revenue, mitigate reimbursement risks, engage with consumers and compete in tomorrow's VBC health care marketplace.
- Evaluate your current customer engagement and revenue cycle operating model through the lens of digital enablers and analytical capabilities and compare with the capabilities that enable revenue cycle success under VBC.
- Redesign your customer engagement and revenue cycle services delivery model and deploy digital enablers and robotic and cognitive analytical capabilities to win the customer and accelerate readiness for transition to VBC.
- Deliver a differentiated customer engagement model and a highly digitized revenue cycle organization that creates value under both volume-based and VBC reimbursement models.