The revenue cycle is like the engine of a car, propelling your organization in to the future. When a vehicle’s engine leaks oil, the automobile can’t run efficiently. When your revenue cycle leaks money, your organization may struggle to operate.
Common revenue cycle pain points
For healthcare organizations of any size, the revenue cycle can be an unwieldy mechanism, driving the organization forward, but often doing so in an inefficient manner. This pain point results from an industrywide focus on cost over revenue cycle performance.
“From top-performing revenue cycle organizations to the bottom quartile, critical benchmarks have been either stagnant or steadily sliding since 2011 and need a strategic overhaul,” explained James Green, a national partner at Advisory Board.
At the same time, care organizations across the country are failing to fix the leaks in their revenue cycles and so profit margins are growing thinner. Advisory Board, citing data from Moody’s, reported that median operating margins fell from 3.4 percent in fiscal year 2015, to 2.7 percent in fiscal 2016. Over the same period, median operating cash flow dropped from $76.4 million to $75.9 million. Meanwhile, operating expenses increased by 7.5 percent in fiscal 2016.
So, where’s the money going?
A significant amount of patient revenue may not get collected at all. As copays and deductibles increase, and more financial responsibility gets placed on patients, the chances of that revenue going uncollected rise. Stuart Hanson, a director of business development at Citi Retail Services, speaking with HFMA magazine, explained that his company’s analyses show that providers’ level of patient direct pay to grow by 50 percent or more on average, by 2019. At the same time, Hanson expects up to 30 percent of outstanding balances to get written off as tax deductions – to the tune of approximately $200 billion.
Patients may be unable to cover this increased responsibility, or they may simply get confused by their bills. Research from strategic design experts Mad*Pow found that 49 percent of patients are not sure if their bill totals are correct, and 48.8 percent said they were surprised by the amount of money they owed. This confusion can lead to unpaid bills and frustration.
The accuracy of bills is another complicating factor. The Washington Post, citing Dr. Stephen Parente of the University of Minnesota, reported that an estimated 30 to 40 percent of medical bills contain inaccuracies. These mistakes can be attributed to a number of factors, including miscommunication between clinicians and administrators, coding errors, incomplete records or complicated payer requirements.
In other words, there is no one problem with revenue cycles, but rather a plethora of obstacles that organizations must overcome. Many technology solutions are widely available to mitigate these issues, but even the adoption of such products and services faces an uphill battle. Black Book Market Research found that 95 percent of practices with fewer than five physicians identify their organizations as not tech-savvy.
Tech-savviness shouldn’t be a barrier to improving the revenue cycle, and it doesn’t have to be.
Revenue cycle improvements with integrated technology
Every healthcare organization faces its own revenue cycle challenges. Some physcian groups may lack the technology to accurately capture the patient experience in one bill. Health networks may be overwhelmed with large patient populations, unable to keep up with the flow of admissions. In some cases revenue cycle issues may have their roots in external forces, such as regulatory burden or payer requirements.
Whatever the problem is for your organization, there is a solution. Customized, integrated technologies work with your current EHR system and billing software to streamline your revenue cycle, making it more efficient and a lot less leaky.
To learn more about how tailored technology can improve your organization, contact Tangible Solutions today.