In this special Speaker Series, Becker's Healthcare caught up with Jonathan Wiik, TransUnion Healthcare principal and author.
Mr. Wiik will speak during the Becker's Hospital Review 4th Annual Health IT + Revenue Cycle Conference on "Revenue Cycle 2025: Transforming Reimbursements and Collections Cultures with Analytics and Automation," at 9:00 a.m. Thursday, Sept. 20. Learn more about the event and register to attend in Chicago.
Question: What do you see as the most vulnerable part of a hospital's business?
Jonathan Wiik: Protecting revenue from patients and payers is becoming increasingly difficult. Denials, Medicare bad debt, underpayments and uncompensated care represent key areas of revenue leakage facing hospitals today. Uncompensated care reached $38.3 billion in 2016 per a recent American Hospital Association report — the first increase in four years. The trend does not look promising for the future. These issues present unique challenges as they are often large matrix issues across multiple departments, fraught with labor-intensive investigations from staff. The magnitude of getting to final payment resolution often produces inconsistent results. Given the nature and scope of these problems, I feel that hospitals need to look closely at data and analytics to change the paradigm. Leveraging consumer financial insights for this approach can help a recovery team work smarter — not harder — by getting the right accounts to the right representative, at the right time, for the right workflow. Revenue leakage can be prevented, but not in the traditional way — hospitals need to shift to identifying and prioritizing high yield, low effort accounts — which can drive cash flow and positive outcomes.
Q: What's the best thing you've read lately?
JW: I love to read anything and everything related to revenue cycle — troubling, but alas, true. I recently read a study from McKinsey and Co., about technology and payment trends hindering revenue cycle. The article was very insightful, as it highlighted the challenges our industry faces due to uncompensated care and the source of trouble — which surprisingly was not the uninsured. The article pointed out that the shift in bad debt have been relatively constant, but the nature and type of debt has changed significantly. Payer denials and patient balance after insurance have both increased, while uninsured bad debt has gone down. The article highlighted the type and complexity of issues contributing to bad debt from payer and patient, and really made me pause to look at the issue of bad debt differently. The author noted, "Providers will need to rethink their current revenue cycle operations and develop new capabilities. To succeed in the future, they will need to evolve from revenue cycle management to 'revenue excellence.'" Aptly put — and many of the conversations I am having with revenue cycle decision makers center around that theme.
Q: How has your organization improved the revenue cycle process in the past year? Or, if your organization hasn't improved its revenue cycle process, how would you go about it?
JW: TransUnion Healthcare has helped hospitals identify $4.4B billion in recovered cash since its inception. This has occurred by identifying patient insurance coverage for the hospital that they otherwise would not have found, in addition to other payment sources. Thus, our provider clients gain the ability to bill and get reimbursed for their earned revenue that would have otherwise gone to bad debt. Our reimbursement methodologies and revenue cycle technologies have also helped hospitals identify root cause issues when insurance coverage or documentation has not been properly identified, and helped them optimize their processes for better staff and patient experiences. TransUnion Healthcare has also helped hospitals engage patients early with charity screening, estimation and other solution sets and data assets, as well.
As far as RCM improvement, I see successful organizations focusing on one issue at a time and thereby driving results. Areas of focus include denials management, patient financial experience and underpayments from Medicare. There is an increased emphasis on "frictionless payment" for patients — providing them flexible and affordable payment options, through mobile apps and with payment schedules, to help ease the frustration with typical "envelope-in-the-mail" models. I also see innovative revenue cycles looking to data and analytics to identify areas of automation and revenue yield. Specifically, I am seeing stratification of accounts for underpayments from transfers, indirect medical education or graduate medical education, newly-eligible claims and discovered insurance coverage post service. Revenue cycles are becoming a key strategy for hospitals to consolidate expenses and drive yield — and innovators in this area are making great strides.