As economic conditions further stress healthcare organizations’ margins, leaders are reevaluating their approach to optimize their revenue cycle organizations. Ideally, focus should be on improving yield and cost in tandem — but increasing costs, diminishing reimbursements, and evolving consumer trends make it difficult to strike that balance.
Organizations have traditionally prioritized improving cost-to-collect over yield performance, creating an imbalance. Synchronous revenue cycle improvement requires a more holistic approach.
Where do you stand on the cost and net revenue performance continuum?
As year-over-year benchmarks for cost and yield rise, leaders must first understand where they land on the cost and net revenue performance continuum. Organizations will fall into one of the following four quadrants, indicating key actions to enable a more balanced strategy to reach the ideal state.
High cost, high revenue
High cost-to-collect with moderate to strong revenue performance, creating opportunity for improvement in both areas. Key actions include:
- Maintain efforts to improve yield
- Support operations with insights and tech
- Drive operational model alignment
High cost, low revenue
High cost-to-collect and poor revenue performance create a need for rapid financial improvement through core revenue cycle tactics. Key actions include:
- Deploy core tactics to build a foundation
- Prioritize staff development to support improved operating model
- Invest in supporting tech and partnerships
Low cost, low revenue
Too much focus has been placed on cost take-out while revenue performance lags, creating an imbalance. Key actions include:
- Continuous yield process improvement
- Significant investment in talent and tech
- Align operating model to organizational strengths
- Seek partnerships to support organization weaknesses
Low cost, high revenue
Ideal state balancing cost-to-collect and revenue performance. Key actions include:
- Continuous yield process improvement
- Cost and revenue actions are synced
- Invest in upskilling staff to further improve yield
Five fundamentals for improving cost and yield in tandem
Regardless of where an organization falls on the cost and revenue performance continuum, five actions are fundamental to moving cost and yield in balance:
1. Upskill leaders for the future
High-performing revenue cycle employees have traditionally been proficient billers and collectors; today’s experts come from accounting, technology, manufacturing, and customer service backgrounds and have a data-driven mindset.
Organizations can invest in talent strategies centered on recruiting and developing critical thinkers with an ability to connect their work to outside functions, including IT.
2. Evolve with consumer expectations
Leading organizations looking to provide a seamless consumer experience are embracing new technology and digital platforms.
No two patients’ care journeys are exactly alike, and a more consumer-centric revenue cycle model allows for adjustments based on their specific emotional and physical needs.
3. Rethink the model
Achieving simultaneous improvements in cost and yield areas can start with striking organizational balance internally. Leaders are shifting away from isolated instances of business function excellence, instead focusing on front, middle, and back-office connections within the revenue cycle.
This unified, outcomes-based approach can result in more structured processes and connected consumer experiences. Understanding your organizational strengths and weaknesses — and finding the right experts to supplement your expertise and address pain points — is the first step towards improving connectivity.
4. Utilize data and analytics
Real-time data insights enhance an organization’s ability to identify, investigate, and iterate on opportunities for continuous improvement.
Utilizing analytics to connect data points across an organization’s system — including within health information systems (HIS) and electronic health records (EHR) —can help leaders make more balanced decisions that improve both cost and yield performance.
5. Evaluate automation opportunities
Automation is no quick-fix and not the ideal place for an organization to start. Only after the first four essentials are in place should leaders identify and implement use cases for automated technology.
After key metrics are understood and meaningful data has been aggregated, organizations can explore ways to build automation through their health information systems (HIS) or bolt-on technologies or decide if they want to utilize functions including robotic process automation (RPA) and artificial intelligence (AI).
As healthcare organizations look to create a more efficient and sustainable revenue cycle, embracing a holistic approach, including investments in new skills, business models, and technology, will enable organizations to sync the best of both cost and yield performance.