Earlier this year, Becker's published a recap article about a Black Book poll of healthcare CFOs, CIOs, business office managers and technology and financial services staffers. In essence, the survey of revenue cycle management (RCM) stakeholders found that nearly half (45 percent) of struggling hospitals plan on moving toward end-to-end RCM outsourcing.
According to the report, the shift to improving quality while reducing costs for financially struggling hospitals is "anticipated to ensure widespread adoption" of RCM outsourcing.
End-to-end outsourcing may become a general trend in healthcare, but hospital finance leaders should look for solutions that focus on your patient billing and collections. This not only prioritizes efficiency but also ensure long-term success with your customer: the patients.
The new patient revenue cycle
Until 10 years ago, patient collections were arguably a lesser problem because RCM was driven by government and insurance payers. Patient payments were a small fraction of the total.
Healthcare is undergoing a massive retail shift where the average patient now pays more money out-of-pocket, in addition to paying the usual insurance premium. Recent health reform is accelerating this further. As patients face higher medical bills, their broken financial experience is more apparent. They're not sure what they need to pay and why. This impacts their willingness to pay, not to mention their satisfaction overall.
This emerging retail trend requires a focus on the patient revenue cycle.
Any health system seeking to be the provider of care to someone in a given service area should own their patients' experience from start to finish — including the financial aspects. A positive billing experience serves as the connector from clinical care to payment, and ultimately system loyalty.
Examples of bucking the trend outside healthcare
Simply trying to collect payment isn't enough. The process must be transparent and convenient. Looking beyond healthcare is instructive. One consumer example is the airline check-in process. Within eight relatively short years, the airline industry radically changed from 2 in 10 to over 8 in 10 travelers checking in online.
The movement toward self-service adoption is increasingly common as most industries require a foundation for change. For airlines, first there were kiosks in the airport terminal, which were hard to understand and required awkward information. Then, airlines started implementing online check-in with easy linking straight from your email. Today, a number of airlines provide both online and mobile check-in as well as mobile boarding passes. Each step was a clear movement towards better design, improved user capability, and ease of use — proving the power of convenience.
Another example is Apple's Genius Bar. The Genius Bar is a tech support station located inside Apple's retail stores. When Apple first placed the Genius Bar very literally in the center of their stores, this was considered crazy. All of the other tech companies were outsourcing customer support overseas, focused on cost reductions (sound familiar?).
Today the Genius Bar is a both revenue generator and a competitive advantage. Receiving over 50,000 worldwide visits per day, Apple's team today shows the world what support can be. Ron Johnson, former senior vice president for retail at Apple, has often referred to the Genius Bar as the "heart and soul of our stores."
Bringing systems back in-house can provide a company the opportunity to bring its message and brand to life while showing consumers it cares about them. For hospitals, this translates to putting your patients first.
Don't outsource your billing; don't outsource your patients
Many studies have shown that a patient's payment experience colors their overall feelings about a hospital stay.
In one example, Cobre Valley Regional Medical Center brought patient collections back in-house after continuing problems with their third-party collections vendor. Brad Stoddard, director of patient financial services at Cobre Valley, explained to reporter Glenn Gross that one of the greatest benefits of bringing collections in-house was eliminating a layer of disconnect between the patient and the hospital. Formerly, customer complaints were diluted by the vendor. Today, they hear complaints first-hand can resolve issues in a more timely manner.
"We have zero complaints about rude collectors... which was not the case with the vendor," stated Mr. Stoddard. "We are able to address patient concerns pretty seamlessly and we are able to resolve issues much quicker than the vendor was able to." Additionally, Cobre Valley's staff is better equipped to help patients and solve problems, because "we make the rules."
Other health groups are also bucking the trend. Take Brentwood, Tenn.-based LifePoint Hospitals, which has over 100 clinics scattered across the United States, from rural communities in Mississippi to Wyoming. Before, LifePoint struggled to handle billing and payments across the many clinics and physicians within their network. Now they use a consolidated central billing strategy in which multiple providers and visits are available for the patient to view and pay in a single, easy online location.
Just seven months after LifePoint implemented its consolidated billing system, self-service collections jumped from zero to almost 40 percent.
Although RCM outsourcing is a trend set to expand, the loss of control is a clear disadvantage to outsourcing.
In another example, Denver Health CFO Peg Burnette, the financial leader of Colorado's primary safety-net institution, told Becker's that widespread outsourcing hasn't proven to be efficient for her organization so far.
To accomplish your patient engagement and revenue cycle goals, look for strong partnerships rather than end-to-end outsourcing. The right partner can help identify opportunities to consolidate functions across your system that reduces costs, increases transparency and improves financial performance.
Leading finance and healthcare executives are showing that an in-house revenue cycle is not only exponentially cheaper, it empowers their patients, their staff and their strategic objectives.
Healthcare groups such as El Camino Hospital and ValleyCare Health System (an affiliate of Stanford Health Care) have used cloud-based technology to strategically integrate patient engagement, billing and payments. On average, over 80 percent of patients recommend these providers based on their recent payment experience alone.
Today's healthcare revenue cycle is fast growing and touches your most valuable assets: Your patients. The right approach can turn your revenue cycle into a competitive advantage. The result is happier patients, higher collections and lower costs.
Tomer Shoval is a veteran e-commerce leader and a frequent speaker on the intersection of healthcare, technology and consumers. He founded Simplee as a way to help others better understand and manage their healthcare bills. Previously, Tomer was the managing director of Shopping.com North America (an eBay company). He holds a bachelor's degree from Academic College of Tel-Aviv.
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