The new reality of increased patient financial responsibility has left many healthcare providers struggling to collect patient balances. Whereas the patient component of the revenue cycle was once comparatively trivial, now its importance and complexity requires a modern approach that demands processes integration, holding vendors accountable to performance impacts, and focusing a team on ongoing needs.
Getting beyond piecemeal approaches
Faced with a rising tide of bad debt, from 29% to 38% in a single year, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire.
By integrating critical tools and processes, such as statement messaging and payment portals, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%. That equated to a $1.3M annualized improvement in patient cash over a six-month period.
Analyzing performance impacts
Another common problem for patient revenue cycle managers is that their needs get lost in a large initiative. When that happens, the search for solutions often regresses to a focus on product features rather than comprehensive analysis.
“It seems there is no shortage of vendors that are attempting to tackle the patient payment challenge from several different angles,” said Tim Wenner, Director of Revenue Cycle Management at Minnesota-based Allina Health. “When it comes to patient billing, for example, we had to make a choice between using the pre-packaged option that came standard through our EMR vendor or to engage with a company that specializes in patient billing to develop a customized design. The right approach isn’t always clear. Though the former would seem to be less costly and easier to implement, in the end, our choice was driven by the need for flexibility and the opportunity to achieve better results. That decision has paid off in helping to drive faster payments and a significant increase in the number of patients who choose to pay online.”
Focusing a team to drive results
Once providers establish a better financial communication model with patients, they have tools in place to optimize results. At NorthShore University Health System in Chicago, financial leaders are dealing with growing challenges with the patient revenue cycle by creating a team of employees dedicated to finding solutions.
“We recognize that products and features alone aren’t going to be enough to solve a complex problem that involves multiple patient touch points before, during and after an episode of care. We know we can’t take a piecemeal approach to a complex problem,” said Brian Washa, Senior Vice President, NorthShore University Health System. “A truly strategic approach requires organizational focus, so we have built a task force, of sorts, to work together and further optimize our communication and our processes. We aim to be empathetic to the patient billing experience and work to deliver a fully integrated and user friendly solution.”
The team’s charter is to review analytic dashboards, identify challenges and opportunities and continually optimize messaging, segmentation, channel communication strategies and process changes based on results. Performance metrics include cash collected as a percentage of billed dollars, number of days to pay by channel, payment plan enrollments and compliance and the effectiveness of messaging strategies across patient segments.
By taking a holistic approach that includes integration, measurement, and organizational focus, providers can make true progress in the struggle to increase patient financial engagement, increase revenue and reduce billing costs.
Mr. Maurer’s career has focused on cloud-based strategies that improve business processes and data management. At Apex, he oversees product strategy, implementation, and professional services, with a focus on helping providers streamline and strengthen the patient revenue cycle.