While the revenue cycle may not be top of mind for every healthcare C-suite leader, strong financial operations can mean the difference between executive leadership team meeting their goals or falling short.
In fact, the vital nature of the revenue cycle management function touches nearly every aspect of a healthcare organization's financial and clinical operations. Yet, despite its importance, many executives are experiencing difficulties looking at the organization's success from a holistic perspective while maintain focus on their own specific goals and responsibilities.
Thus, all c-suite executives must be engaged and active in helping to manage and promote the revenue cycle. Luckily, there is ample opportunity for greater C-suite engagement—and significant benefits as a result of different executives' involvement in the process. Through this involvement, C-suite executives can prioritize initiatives and investments in their organization, provide better experiences for their patients and set themselves up for long-term financial health.
What Constitutes a Healthy Revenue Cycle?
A strong revenue cycle depends on many variables. Fundamentally, it can be defined by systems and processes that efficiently convert receivables into cash, while simultaneously creating a positive experience for patients and staff.
When performing well, these systems drive revenue, lower costs, speed cash flow and provide capital for long-term strategic investments. Optimized processes typically rely on highly automated systems to manage workflows by exception. Consequently, staff only need to focus time-consuming manual efforts on those issues that fall outside the range of automation. Staff time is also freed to analyze the exceptions, which can help prevent their costly reoccurrence.
Leveraging technology in this manner is essential to achieving a robust revenue cycle because it not only increases efficiency, but also lowers the cost of collections. Additionally, a healthy financial profile allows the entire C-suite to make optimal strategic investment decisions, allocate appropriate capital spending for key organizational initiatives and set a positive tone and direction for their organization's future. Moreover, an organization's ability to be agile and respond to evolving market conditions also requires a robust revenue cycle and involved leadership teams.
Technology, Patient Experience and Finance Lead the Way
Although it's critical for all C-suite leaders to nurture the business of their organizations, it is particularly important for three executive positions to be involved: the Chief Financial Officer (CFO), the Chief Information Officer (CIO) and the Chief Experience Officer (CXO).
Chief Financial Officers: CFOs are traditionally responsible for the revenue cycle. While that is still the case, this executive role now extends beyond just minimizing the cost of collections and boosting days cash on hand. This officer must partner with other C-suite leaders to elevate the revenue cycle to the next level in order to better fund strategic hospital operations and seize new payment opportunities.
By emphasizing effective capital management, for example, CFOs can help organizations fund major investments in infrastructure or leverage debt instruments strategically. At the same time, they must look for ways to prepare their organizations for new reimbursement models and set the stage for future growth opportunities.
Chief Information Officers: The CIO generally provides strategic technology direction and manages information systems and other types of technology platforms across an organization. Now that the healthcare industry as a whole is achieving broader electronic health record (EHR) adoption, CIOs' attention is expected to pivot back to technologies that can improve the revenue cycle. For example, even as CIOs work to optimize current EHRs, new cost accounting technologies represent opportunities to expand business operations. Therefore, it is increasingly important for CIOs to be involved in revenue cycle discussions to make sure they are not only able to invest in new technology for the organization, but also support a healthier revenue cycle through their technology investments.
Chief Experience Officers: As the overall patient experience also grows in importance, today's CXO is a relatively new type of C-suite officer, often is tasked with ensuring a seamless patient experience. With patient financial responsibility continuing to increase as a percentage of total healthcare organization revenue, executives need to take multiple steps to ensure that billing is convenient and understandable for patients. A number of technology-enabled solutions can help CXOs cultivate greater patient satisfaction, such as:
- Credit card on file (CCOF) programs, where individuals agree to pre-authorized credit card payments upon service delivery;
- Portals that enable online bill payments and communication; and
- Call centers, complete with live representatives for patients to speak with or interactive voice response (IVR) systems for a fully automated phone payment experience.
Managing the Revenue Cycle for Long-Term Success
For long-term success, all executive stakeholders should take an active role in improving the revenue cycle. C-suite leaders can't afford to wait; the transition to value-based reimbursement models makes finance-based strategic planning a critical priority.
A solid revenue cycle impacts four key areas of an organization: its revenue; its cost to collect revenue; its cash flow; and its capital management. Thus, actively supporting the CFO, CXO and CIO by monitoring revenue cycle issues benefits other C-suite leaders as well. By tailoring business intelligence dashboards specifically to their areas of functional responsibility, for instance, the C-suite team can better manage those areas that are either helping or hindering the organization's financial health.
When the entire C-suite is involved, healthcare organizations can better position themselves for future growth and financial sustainability. In the face of uncertainty around reimbursement and emerging risk-sharing business models, executive leaders must take the opportunity and work collaboratively to elevate revenue cycle management.
Monte Sander is the executive vice president of RCM services at NextGen Healthcare.
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