Before approving resources for a new revenue cycle solution, every executive wants to know the expected return on investment.
While some hard ROI measures are clear, much of the benefit of automation comes from soft ROI, which is often more difficult to measure.
During the Becker's Hospital Review 7th Annual Health IT + Digital Health + RCM Annual Meeting, in a session sponsored by AKASA, Amy Raymond, vice president of revenue cycle operations for AKASA, discussed challenges facing health systems and how to more accurately measure RCM automation ROI using a new system — Total Value.
Four key learnings were:
1.) Health systems are increasingly turning to revenue cycle management automation.
According to an HFMA pulse survey commissioned by AKASA, 78 percent of executives say their organization has automated or is planning to automate a portion of their revenue cycle within the next year. These decisions are taking place in a context of staffing challenges and volatile economic conditions. The goals are to increase revenue, accelerate cash flow and increase productivity and savings.
In considering RCM automation decisions, leaders are assessing how best to think about ROI. "We need to understand how evolving technology might require us to change our framing of ROI and how we calculate it," Ms. Raymond said. "We need to identify some key financial and productivity metrics and determine how to weigh them in considering the success of a project."
2.) Hard ROI measures used by health systems fail to reflect the full impact of automation.
While hard ROI measures such as reduced cost to collect, increased yield and overall denial rate are important, soft ROI measures are just as critical. Things like hours saved, patient and employee engagement and clean claim or turnover rates can be significantly affected by automation.
"Hard ROI fails to measure the impact on urgent needs, shifting market trends and sometimes efficiencies," Ms. Raymond said. "It provides valuable information for investment decisions but can fall short in making decisions about scaling technology. Soft ROI, on the other hand, is an important part of the equation to measure the impact of automation. It's often neglected though, because it doesn't fit into a nice package of standard reporting."
3.) Measuring automation's total value reveals a better understanding of the total impact.
Hard ROI is composed entirely of financial metrics that can be easily measured and quickly seen within the first year. Soft ROI is harder to measure and usually doesn't become entirely evident until the third year or so. Measures of soft ROI include efficiency, workforce and patient impact and policy and regulation support.
"You're likely already tracking these things, so it's less about making sure your automation is adhering to regulations, but that it's integrated in a way that you can show that improvement is based on automation," Ms. Raymond said. "Be sure your technology partner takes shared ownership of reporting; they should be able to help you track this soft ROI."
4.) An AKASA case study.
A multi-state health system with four hospitals, 33 clinics and $1 billion in net patient revenue began using AKASA in August 2019 for claim status automation. Within 18 months, AKASA was completing more than 19,000 claim status checks per month, which was the equivalent of 19 or more FTEs.
"Once this health system saw the benefits of automation, realized through claim status alone, they expanded use of automation into numerous areas throughout the organization," Ms. Raymond said. "Through this process, they were able to see a $30 million yield increase and are spending 86 percent less time on status checks; status checks that used to take seven minutes are down to one minute. The health system absorbed an entire hospital without adding to their RCM staff. Because of these benefits, it shows the importance of playing the longer game over the course of a couple of years."
By focusing on capturing the total value of automation, including both hard and soft ROI measures, extending the measurement window and partnering with a vendor invested in helping report on these metrics, health systems can realize greater value from automation.