Coming on the heels of the pandemic, an estimated 5 million US Workers have switched to new careers during the great resignation. The healthcare sector is one of the most affected, with the COVID-19 pandemic taking a toll on the frontline workers, i.e., physicians, nurses, and support personnel. As physicians and nurses on the verge of burning out, they seek to work with healthcare organizations that allow them a better work-life balance. Even as re-staffing for workers who have quit their jobs means higher payouts to maintain the current staffing level, healthcare CFOs face a new challenge fueled by the global geopolitical crises and the rising price of oil – inflation. What this means is that the costs of care are going up significantly.
Operational efficiency – The new imperative
Hospital CFOs must focus on operational efficiency even as they handle human resource issues – recruiting, training, retention, and engagement. The staffing shortage will likely worsen over the next decade. The challenge CFOs face is to absorb the additional costs by improving operational efficiency and eliminating unnecessary services and expenses that do not yield the desired benefits. Hospital CFOs must reevaluate the fundamental equation of Profit, i.e., Revenue minus costs.
While one can argue that hospitals can control the care costs, they are mainly uncontrollable due to the current inflationary trend. From supplies to the cost of healthcare workers to software and systems, there are opportunities to control costs through better negotiation and efficient inventory management. But we believe the most significant chance of transforming the hospitals’ financial structure is in the revenue cycle.
Infusing agility into the revenue cycle
Healthcare providers have written off billions of dollars for decades due to an ineffective revenue cycle. Here are a few things that hospital CFOs can do to change that.
Shift focus from denial management to denial prevention
For decades, claim denials have been one of the most significant issues in the revenue cycle. Claim denials impair the pace of cash flow realizations and increase DSO. From eligibility and authorization issues to timely filing, many of the causes of denials are preventable.
Yet, most hospitals lack the necessary close-looping processes and workflows to eliminate avoidable causes of denials. Shifting the focus to denial prevention is an important project and requires the involvement of clinicians and revenue cycle practitioners. Healthcare providers can realize more from their revenue cycle by creating an appropriate feedback loop and taking up projects to eliminate 80% of the denials.
Following up on low dollar balance accounts not touched earlier is another strategy they can look at by utilizing offshore partners.
Finding resources for administrative functions – RCM, HIM, and Coding
CFOs can access qualified and certified revenue cycle resources by relying on offshore partners. Access Healthcare, for instance, has over 24,000 revenue cycle resources in offshore destinations in India and Manila and over 2,500 medical coders. By outsourcing, CFOs can turn to low-cost yet, highly qualified labor governed by tight service level deliverables to address their #1 challenge – finding skilled people for revenue cycle functions. Moreover, as the outsourcing relationship stabilizes, they can shift focus to RCM optimization and address issues such as revenue leakage, underpayment recovery, clinical documentation improvement, and DNFB, among others.
Investing in Analytics
While industry bodies like HFMA, MGMA, and AHIMA have provided benchmark KPIs and process frameworks, hospital CFOs must invest in analytical tools to get the insights they need to make decisions. Often, their current financial state acts as a deterrent for making such investments as there are other conflicting priorities. An alternate approach for them could be combining outsourcing and analytics by getting the service provider to provide analytical tools and reports as part of the engagement.
Investing in Process Automation
Automating repetitive processes is one of the best ways to improve operational efficiency. Deploying even an off-the-shelf automation product requires considerable expertise to implement and manage the deployed solutions. Most of these solutions have high license costs and take specialized resources to work. An alternate approach could be to utilize your outsourced service provider’s automation ecosystem. For instance, Access Healthcare brings you a focused RCM automation platform, echo. With pre-built solutions from the echo automation suite, you can reduce your implementation time and realize benefits early.
Conclusion
Operational efficiency is the new imperative for hospital CFOs. The inflationary trend is adding to their woes as they reel under the unprecedented labor crisis coming on the back of the global pandemic that had already stretched healthcare finances and brought clinicians to the level of burning out. As they strive to do more with less, a trusted outsourcing partner can reduce costs, apply analytics, and automation to transform their revenue cycle and enable healthcare provider organizations to survive. At Access Healthcare, we are focused on being that trusted partner. Our transformation toolkit includes global delivery, market-leading automation, analytics, and a consultative client success team that helps you do more with less.
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