Roughly half of all U.S. hospitals reported negative margins in 2022. HFMA reported that 2022 was the toughest in memory for hospital business operations, and S&P’s healthcare analysts don’t foresee much improvement in 2023. Some predict the industry will continue to face difficult conditions because of inflation, the continued healthcare labor shortages, endemic COVID-19, not to mention a wide array of macroeconomic challenges. As hospital executives, I encourage you to be bold during these times.
We all know how complex U.S. healthcare is. And managing a healthcare organization is much harder today than it was even just a few years ago. For CEOs, the most challenging decisions involve identifying what should be done now and what can wait. According to McKinsey & Company, CEOs are learning “stagility,” which is building a structure that is both stable and agile.
Wise investments can help ensure your organization thrives when we come out the other side. When faced with economic contractions, the natural inclination is to scale back and preserve resources, but this approach can inadvertently harm your organization – and the communities it serves. Now is the time to make bold investments that yield strong returns.
So, what do bold actions look like for providers? It requires making investments that support revenue growth. Some of those investments include:
Optimizing Your Revenue Cycle
For too long, I’ve encountered providers who consider the revenue cycle a cost center. If you think this way, I encourage you to consider your revenue cycle as a revenue generator. However, for it to generate revenue, it needs to be optimized.
Every healthcare organization’s revenue cycle is unique. Even subtle differences in people, processes, and technology can dynamically impact the revenue outcomes between two organizations. As such, the most effective way to optimize your revenue cycle is to engage an experienced rcm partner with demonstrated expertise in revenue cycle operations and proven technology solutions.
By working with a partner that can marry service excellence and automation, you can change the course of your financial outcomes and achieve the financial freedom to realize your goals.
Automating Workflow for Improved Efficiency
McKinsey & Company’s recent article Actions the best CEOs are taking in 2023, identified that CEOs are taking actions to deal with digital disruption, including developing advanced analytics and automating work. Opportunities for both can be found within the revenue cycle.
The market for AI – specifically, machine learning (ML) tools – in healthcare is forecasted to top $20 billion in 2023. These technologies continue to become deeply embedded in healthcare technology solutions. Evidence of their usefulness can be seen throughout the revenue cycle. There are countless opportunities to leverage automation and AI in the revenue cycle in ways that drive revenue growth and prevent revenue leakage, such as ensuring proper coding and documentation, which translate into improved first-pass claims resolution rates.
At Richmond University Medical Center, we implemented our computer-assisted coding software which allowed their coding teams to eliminate manual abstracting, enhance quality, and increase productivity. As a result, the organization was able to decrease discharged not final coded (DNFC) by 38%, increase coder productivity by 33%, and reduce rejected claims by 30%. This simple solution led to a cash flow improvement of $2.2 million in just one year.
Combining Services and Technology
As resource constraints and shrinking budgets become more prevalent, more providers are beginning to outsource their medical billing and coding. Leveraging the expertise of an offshore outsourcing partner means you have access to a global talent pool that can scale as your needs change. AGS coding and billing specialists are all university graduates and go through rigorous training and are expected to meet stringent quality goals.
By both outsourcing talent and leveraging technology, you can reassess the structure of your revenue cycle organization and maximize the value of your most skilled team members. Transitioning repetitive, mundane human tasks to technology also allows you to reassign staff to more critical functions and complex tasks.
One recent example of this has been Tidewater Physician’s Multispecialty Group (TPMG). In addition to augmenting their teams with supplemental A/R services, we implemented an AGS-developed robotic process automation for resolving a large backlog of placeholder penny transactions. This automation handled 98% of the penny adjustment process and resolved a backlog of more than 100,000 outstanding write-offs in just four months. The organization expects to save more than $200,000 while reducing the burden on its valued staff.
According to Dinesh Pai, Chief Revenue Cycle Officer at TPMG, their teams are, "…excited that they didn’t have to do this work anymore and could instead focus on issues that they knew needed their attention and expertise to address quickly and accurately. No one signs up for the job of writing off pennies in a transaction. RPA eliminates that need and lets our staff dedicate themselves to the real work that they did sign on to do."
The Time is Now
Bold actions come with some degree of risk, but with the right partner, you can position your organization for a strong future. The right RCM partner will listen to your challenges, build the right engagement strategy based on your unique needs, identify where and how technology can be leveraged, offer guidance for optimization, and deliver strong ROI. We are that strategic partner.
It’s time for bold action – strategies that contribute to both your top and bottom line, providing your organization with the revenue needed for future investments. Remember, fortune favors the bold.
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