I bet that when you hear the term “revenue cycle outsourcing,” a very specific opinion pops up in your mind.
It might be based on past experiences, or even what you’ve heard at another facility. Regardless, you have thoughts about revenue cycle outsourcing (I actually prefer “outpartnering,” but for the sake of clarity, we’ll stick to the traditional term) that are based on the past.
Today, I’m going to ask you to change that. I’m going to ask you to look at 2017 as a chance to address your existing revenue cycle challenges with a fresh approach to outsourcing and a new perspective on what’s possible at your facility. This new approach is going to be crucial as we enter a period of increasing levels of patient liability and the ever-growing importance of looking at engagement strategies from a holistic perspective.
That’s why, to start off, I want to go over five questions that examine the results of your past revenue cycle decisions. These should be addressed as early as possible this year so that you can get a strong start on a new outsourcing strategy.
Are the right tools in place?
A healthy revenue cycle is built on people, but it thrives on its tools.
Declining reimbursements and tight margins mean that the technology and tools you incorporate into your revenue cycle processes must be a good fit. What do I mean by tools? That includes things like a dialer, and data-based solutions that allow for account segmentation and scoring (i.e. business intelligence tools.) These are absolutely critical for maximizing revenue to cash conversions in 2017.
What do your (or your vendor’s) current tools look like and what benefit are they providing for you?
Is your staff right-sized?
I think a lot of facilities take too narrow of an approach to staffing. Proper staffing isn’t just about headcounts; it’s also about the quality and fit of employees.
As we move into 2017, it might be time to ask some questions about the current state of your staffing. Here are a few examples:
- Have they been through proper training?
- Do they understand the importance of customer service in the revenue cycle process?
- Do they understand the importance of their individual roles regarding the patient’s financial experience?
- Do they know the lifetime value of a patient and/or their household?
- Are they incentivized to be true students of the business?
- Are they too closely connected to the community?
That last one might seem a bit strange, but it brings up an important point around creating an effective and standardized relationship between your organization and your patients.
Health and money are two of life’s biggest stressors. That means the conversations your staff has with patients will need to strike a balance between being too detached (robotic and uncaring) and being too close. For smaller communities, “too close” can mean having staff members who personally know your patients, making already-difficult conversations even more challenging.
Are you taking an account resolution-, or collection-based approach?
Quick — what’s the current foundation of your revenue cycle process?
Cash and the patient financial experience are the heart of revenue cycle. For the patient and the hospital to both win, you need to go beyond a collection-based approach and move into account resolution processes that guide the patient down a specific path.
Here’s what I mean by that. Getting a patient to understand their healthcare obligations is an art. A representative could call and say “hey, you owe us money,” but that doesn’t work. It doesn’t help your patient experience or your collections numbers. Your reps must treat people as human beings who deserve respect. Getting from that point of respect to a paid account is where process comes in.
An ideal process walks patients through the steps of understanding everything from the already-confusing terminology in healthcare to how insurance will pay. Too often I see facilities that take patient understanding for granted. I get why that happens…after all, patients buy clothes and groceries and have other debts they willingly pay. Healthcare, though, is much more complex than most financial transactions patients engage in, and overall they don’t really understand what we do.
Is your business office structurally optimized?
Chances are, right now, your business office isn’t structurally optimized. That should be taken seriously this year, starting with an examination of its current state.
Business offices that have staff properly allocated tend to share some very specific traits.
- People who perform a particular role well are assigned to that role as much as possible.
- The best performers are focused on high-yield commercial accounts.
- The bulk of your FTEs should be focused on the most valuable part of your portfolio.
Is that what your business office looks like today?
Which direction are your reimbursements trending?
As this year progresses, many facilities are going to see their reimbursements declining. As a matter of fact, I’d go as far as to say that you should expect it.
I’m not going to tell you to keep an eye on your reimbursements (I assume that’s already happening.) What I will say, is that it’s highly likely that whatever your approach to outsourcing now — whether you’re a champion of outsourcing, or you’ve never considered it before — that 2017 will deal you some bumps that will make reconsidering that approach, a smart move.
Refreshing Your Revenue Cycle
So what do you do next?
Your first priority should be to decide what your organization most needs in a service provider. Start with questions like these:
- How often do we need on-site visits?
- What kinds of metrics, KPIs and reports are we looking for?
- Can they offer advice in helping us answer those questions in ways that align with our facility goals?
- Do their best practices align with our key pain points and challenges?
- What about their management processes and performance evaluations?
- Are they connected in the industry in a way that helps them understand our needs?
As an aside, I need to make a quick point about numbers and how important it is to think bigger than expenses. You want to look for a service provider that is focused on netback return. This means taking a step back from a focus on fees (I know, that’s difficult) and look for the value that’s being provided to your organization. Remember — a 1% increase in collections will ALWAYS outweigh an 1% increase in fee rate.
Most importantly, though, find an outsourcing partner that takes the time to understand your current state and has the experience and expertise to get you from where you are to a point where you’re engaging your patients from pre-encounter to final account resolution.
