As health systems continue to face staffing and economic challenges, more revenue cycle departments are investing in automation technology to manage the burden.
Although hard ROI often plays a leading role in making automation investment decisions, it's important to include soft ROI in measuring these investments.
In a Becker's Hospital Review webinar sponsored by AKASA, Amy Raymond, vice president of revenue cycle operations at AKASA, discussed why revenue cycle automation is a top priority today, the role of both hard and soft ROI, a new ROI measurement framework called Total Value, barriers to implementation and a road map to success.
Five key takeaways were:
1.) Health systems are increasingly turning to RCM automation. According to an HFMA Pulse Survey commissioned by AKASA, 78 percent of executives already have or are planning revenue cycle automation to address ongoing staffing challenges and volatile economic conditions. "One in four healthcare finance leaders need to hire more than 20 employees to fully staff their revenue cycle departments," Ms. Raymond said. "We've got unpredictable patient volumes, ballooning labor costs and sunsetting of pandemic relief funds. As a result, we're seeing an openness to embracing technology, with approximately 45 percent of providers accelerating software investments over the past year in the wake of immense cost pressures.
"Many areas of the revenue cycle are ripe for automation," she continued. These areas include price transparency, claim and authorization status, denials resolution and documentation requests. "Everyone's automation journey is different. You can start with something straightforward and simple to gain adoption, or you could start with your biggest pain point."
2.) Although hard ROI is a key driver in automation investments, it paints an incomplete picture. "We know leaders are zeroing in on metrics like revenue capture, cost- to- collect and cash flow as top priorities," Ms. Raymond said. She believes that financial leaders are hesitant to embrace soft ROI "because it's hard to measure . . . There's limited guidance on how to measure things like productivity, efficiency, workflow and patient financial experience, yet they can't be neglected in the decision-making process."
3.) Organizations often face barriers to measuring Total Value, which considers both hard and soft ROI. "The biggest barriers to measuring Total Value are ineffective change management, staff resistance to automation and unrealistic timelines," Ms. Raymond said. It's critical that organizations prepare staff members for their next move once automation is in place.
"As more mundane tasks are automated, think about how to upskill your rev cycle staff, moving them to more complex areas. This might require additional training, which needs to be done early and often in your automation process so they're ready to transition. That will support staff engagement and support." Be sure time frames for implementation as well as expectations for results are set appropriately. "Unrealistic timelines can be a morale killer," she said.
4.) Total Value must be measured over at least a three-year period with automation being implemented for one full year, balancing both hard and soft ROI. In year 1, the Total Value framework recommends focusing on 75 percent hard ROI metrics, such as reducing avoidable denials and cost-to-collect, as well as improving net collections and A/R days. The remaining 25 percent would examine soft ROI, specifically labor hours saved.
In the second year, the balance shifts to 65 percent hard ROI and 35 percent soft ROI, adding factors like patient engagement and satisfaction as well as employee engagement and vacancy rate. Finally, in the third year, hard and soft ROI should be a 50/50 split, adding soft ROI metrics such as turnover rate, compliance with coding and documentation and value-based care revenue.
5.) An AKASA customer realized significant Total Value ROI with automation. A multi-state health system began its RCM automation journey by automating 19,000 claims status checks per month, which had been done by 19 FTEs. "This health system has seen a $30 million gross yield increase and is spending 86 percent less time on status checks across authorizations and claims status," Ms. Raymond said. "They've been able to realize value from their automation and implementations."
Although hard ROI tends to drive initial investment decisions, it's critical for health systems to include soft ROI metrics when capturing the full impact of automation.
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