Will the challenges never cease for hospital revenue cycle teams? Short answer: no. Longer answer: as regulations change and the ACA is weakened, hospitals face a new round of revenue challenges centering on a patient’s ability to pay. The good news is that technologies, advice from healthcare thought leaders, and smart webinars and conferences are all addressing the problems… we take a look here.
Providers really do serve their communities well from an economic perspective. As the American Hospital Association (AHA) recently reported, “In 2015, America’s hospitals treated 142 million people in their emergency departments, provided 581 million outpatient visits, performed almost 27 million surgeries and delivered nearly 4 million babies. Every year, hospitals provide vital health care services like these to hundreds of millions of people in thousands of communities. However, the importance of hospitals to their communities extends far beyond health care.”
But are providers, central to the economies of many communities, able to control costs? In an article on weakening the Affordable Care Act (ACA) has on hospitals, Stat News suggests it will adversely affect hospitals. “Rolling back the ACA would likely have repercussions for uncompensated care far beyond Medicaid expansion states. In fact, the number of uninsured individuals in the U.S. is directly related to uncompensated care levels, nationally. The American Hospital Association estimated the value of uncompensated care across all hospitals over a 10-year period. It increased from $28.9 billion, or 5.6 percent of total operating expenses, in 2005 to a peak of $46.4 billion in 2013, and then declined to $35.7 billion in 2015, five years after the passage of the ACA.”
An increase in operating costs often pressures health systems to merge. Writing for Healthcare Finance News, Beth Sanborn has penned an article which first notes that in some states Hospitals employ as much as 12% of the working population and account for a high level of economic activity. She sums up the plight of hospitals like this, “As both healthcare and economic cornerstones of their communities, the pressure is greater for hospitals leaders to find new ways to add value, maintain financial margins and keep doors open. That is one of the drivers behind the rash of merger and acquisition activity.”
What are the biggest pain points you see hospitals and health systems encountering right now? “It’s the self-pay growth. Hospital operations are geared around collecting from insurance companies. The provider ecosystem is not built to engage the patient in an effective way. Hospitals traditionally haven’t been good at collecting from the patient.” — Ed Caldwell, Chief Revenue Officer, CarePayment, from an article in Becker’s Hospital Review
We’ve previously written about ways to manage and reduce claims rates. As we see at client hospitals, this work involves a combination of technologies including smart patient access checks, integrated clearing house data, claims management software that goes beyond what large HIT systems provide, and smart analytics to keep an eye on the flow. What actions should managers take to shore up the hospital revenue cycle? A Healthcare Finance article suggesting that “there’s more to it than looking at cash flow ratios and profitability”, cites a study by the school of healthcare management at the University of Texas Health Science Center in Houston with some thoughts on solutions. Some keys are “diversification, growth and improving the revenue mix toward greater outpatient services and they noted that higher patient acuity can be achieved at least in part through broadening to include more complex service lines.”
Then there’s accounting data and analytics which can inform hospital revenue cycle teams. Most hospitals are endorsing some form of review for key performance indicators, but a smart article in Health Affairs suggests that many hospitals may be overlooking some crucial cost measurement data. Noting that “Data collected by the Healthcare Information and Management Systems Society reveal that more than 1,300 US hospitals have adopted sophisticated internal cost accounting systems,” the authors observe that “we are only now beginning to see them being used by interdisciplinary teams involving physicians to restructure clinical processes. Such use requires the collaboration of physicians in cost-management activities, which traditionally has been very difficult.”
What are the biggest pain points you see hospitals and health systems encountering right now? “It is more and more difficult to effectively manage the economics of the hospital. Whether it is a short-term or long-term need, driving down the cost to collect is critical to the ongoing success of a health system.” — Mike Morris, President, Xtend Healthcare, from an article in Becker’s Hospital Review
In the end, when it comes to economics for the hospital revenue cycle team, it’s all about the patient. Health Leaders Media has an interesting article focusing on this, entitled “6 Challenges Patient Experience Leaders Must Overcome”. Here’s a quick summarization (Health Leaders Media also hosts an annual “Experience Exchange” for leaders in healthcare — contact them at Exchange@HealthLeadersMedia.com):
- Speeding up the HCAHPS Survey
- Shifting work processes to be more patient focused
- Lessening the administrative burden
- Forging a human connection instead of medical transactions
- Getting healthcare organizations to act like other consumer-oriented industries
- Battling to keep patient experience high on the list of priorities
Solutions for hospital revenue cycle teams are at the core of our mission at The SSI Group. We will continue to publish case studies, webinars, trainings and articles examining trends, new problems and ways to address them.