Perhaps not surprisingly, the areas of outsourcing that have seen the greatest growth recently correspond to finding revenue without eliminating clinical functions.
Sometimes that means not spending what you don't have to. Asset-management solution firms offer ways to optimize what equipment is already on hand, and to prevent hospitals from buying more than what they need.
Simon Walls, a managing principal with GE Healthcare Americas, uses the example of infusion pumps. He aims to have clients establish a 1-to-1 ratio of patients to pumps, but many hospitals have about double the number of pumps they need at a cost of $3,000 to $5,000 each. For a hospital with an average daily census of 800 patients, getting to the right ratio of infusion pumps could save more than $2 million when the next equipment refresh-year rolls around.
GE can also offer clients access to its detailed database on performance and liability information for more than 1.6 million biomedical devices so hospitals can make the most cost-effective decisions, Walls says.
For a quick revenue boost, observers say revenue-cycle outsourcing is fast becoming the most popular option. “The growth that folks are really starting to target is revenue-cycle management,” says Kevin Burchill, a director with management consultancy Beacon Partners, Weymouth, Mass. “The overall economic issue is you can't leave any dollars on the table. You have to collect what's due you.”
The revenue-cycle process begins before the consumer becomes a patient with a payment verification process. Some firms will contact a patient ahead of a scheduled procedure to ensure that both the provider and the consumer understand what the bill will be before ever setting foot in the hospital.
Stephen Mooney, president of Frisco, Texas-based Conifer Revenue Cycle Solutions, part of Tenet Healthcare Corp.'s Conifer Health Solutions subsidiary, says in some cases patients have already paid their bills before they receive services.
It helps patients feel better during the healing process, Mooney says, but just as important is the correlation between the patient experience and how physicians feel about the hospital.
The sentiment of physicians can be a major driver of success or failure for hospitals and management teams, but physician satisfaction is often heavily influenced by patients who are forming their opinions of hospitals, partly on how they're treated in the revenue cycle.
“There is such a major correlation between what the patient experience is and how the physician feels toward the hospital,” Mooney says.
In emergency settings, the revenue cycle begins with verification of insurance, eligibility for public assistance, or charity care that counts toward a hospital's free-care outlay.
And the back end of the process needs attention, particularly when a bill has gone out but no payment has come in. Burchill says some of those problems can be solved by sending out the right kinds of bills.
“When was the last time you read a hospital bill you could understand? Hospitals have been doing this forever, but I don't know that's been a core focus or a strength of the industry,” Burchill says. That's why some revenue-cycle firms will offer guidance all the way down to designing patient-friendly bills that make it clear what amounts are owed for which services.
Industry observers say that although revenue cycle is one of the quickest ways to turn a profit from outsourcing, it's also prone to develop some of the most severe problems if not closely monitored, says Neil Olderman, a vice president with Innovative Health Strategies. That means the outsourcer should be providing regular reports—not quarterly statements—including metrics like collection rates and days-cash-on-hand.
Patient satisfaction must also be monitored. Revenue-cycle providers must be made to follow the hospital's existing collection process, whether that's submitting to collections after the first, second or third bill or turning the bill over to a lawyer for a nasty letter, Burchill says. CEOs who let revenue outsourcers run roughshod over patients run the risk of being berated at the supermarket or in church by aggrieved patients.
“Customer satisfaction in an any-means-necessary world is going to be a challenge,” Olderman says.
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