Healthcare organizations continue to struggle financially. Margins remain depressed due to ever-increasing expenses. In May 2022, HFMA reported labor expenses per adjusted discharge increased by 37% from 2019 to March of 2022. More than half of hospitals are projected to have negative margins through 2022. Providers are relying on on revenue cycle management (RCM) vendor partners to help contain revenue. Outsourcing revenue cycle functions are one of the few options healthcare organizations can take to reduce labor costs and offset increased expenses.
A strong working relationship with your revenue cycle management partner is critical to achieving cost savings. Below are some tips from operations and providers that will help to ensure success.
- Set clear expectations and targets, and identify assumptions. Start your search and discovery for a partner by being transparent about your expectations for the engagement. This clarity is especially vital when outsourcing revenue cycle management, as both parties must understand their roles and responsibilities. Work with the vendor partner to ensure goals are realistic, attainable, and reportable. Document all assumptions, no matter how small, and discuss any misalignment as early as possible to prevent disappointment and frustration later.
- Agree on realistic, attainable goals and metrics. If the provider is too aggressive in their performance expectations, it sets the partner up to fail. If the vendor partner is not honest about what they can reasonably accomplish, the provider will be frustrated and disappointed. A good starting point is to review historical performance and industry benchmarks. Based on that data, work together to identify goals and metrics.
- Identify how performance will be monitored, measured, and reported. Decide which team is responsible for developing reports, who will receive those reports, report frequency. And start reporting as early as possible. Discuss who will be responsible for gleaning insights from the data and making recommendations.
- Schedule recurring meetings with operations teams from both organizations. Use this time for Q&A. Encourage regular communication once the project is live. Weekly meetings for functional leaders and monthly meetings with executive stakeholders may be needed to keep the focus on the goals - once the outsourced work is fully transitioned is usually sufficient. During the transition period, daily calls may be required. Get the meetings on the calendars early and prioritize these meetings.
- Adopt a spirit of adaptability and accountability. Plans and structure should be documented and followed as much as possible, but be flexible as circumstances will change. Adjustments may be needed. Some changes will be due to mistakes, and some will be out of everyone’s control. Having a spirit of adaptability will encourage the team to work toward solutions quickly instead of holding tight to a plan that may no longer be the best way forward.
- Communicate directly, honestly, and often. At times conversations may be uncomfortable, especially when a partner needs to share bad news. Being honest and direct allows the teams to continue to move forward and build trust. Remember, the goal can still be achieved in spite of obstacles. Get comfortable having hard conversations. It helps to build trust among team members. Celebrate wins and solve problems together. When a provider outsources much of their revenue cycle, they are giving up visibility of the day-to-day activities. Detailed feedback can help minimize any anxiety caused by turning over control. Vendor partners should be prepared to provide recommendations as well.
- If working with an offshore partner, learn about cultural differences, operating hours, holidays, and their health system. Document expectations and be sure there are no assumptions being made – by either party. Some questions to ask:
- In which time zone will each team work? When possible, allowing teams to work in their respective time zones can help curb attrition.
- What holidays will the teams be required to work?
- Who is responsible for providing coverage on non-working holidays?
- Are there any specific cultural habits that need to be addressed? Communication differences/preferences? Deference to leadership structures or styles? What are the expected response times? Are there expectations for work-life balance?
Once you have answers to these questions for all teams involved, share the information with those who need it.
In Conclusion
Providers and outsourced revenue cycle management vendor partners must work together to build a shared understanding of the goals. Strong communication and review of progress toward goals can help to ensure success. It is essential to review goals regularly to align teams. Doing so makes it easier for vendor partners to adjust and support providers in the most meaningful ways.
Megan L. Benton
