Revenue Cycle Management 2.0: Key to Successful Healthcare Finance
Healthcare Economics doesn't beat around the bush: the first line of their Revenue Cycle Management 2.0 story states clearly: It has never been more important for those in healthcare to manage their revenues effectively.
This has, in turn, put greater emphasis on the need for Revenue Cycle Management (RCM) systems to enable a healthcare provider to better manage transactions between payer, provider and patients. It can, through the use of various software platforms, boost revenues, reduce denials and enhance the patient experience. According to a survey published by health technology company AKASA, nearly three-quarters of health systems surveyed, reported using active technology in RCM operations during the pandemic.
The effective RCM goal does not come without challenges:
However, RCM systems are often fragmented and uncoordinated. A survey by Unified Automation, an RCM consultancy, revealed that 30 percent of health systems and hospitals are unable to manage their revenue cycle automation efforts without at least two vendors. Calculations by the University of Pennsylvania School of Medicine reveal that the US healthcare system wastes $265.6 billion a year on administrative complexity, including billing and coding waste.
The article also points out:
- Calculations by the University of Pennsylvania School of Medicine reveal that the US healthcare system wastes $265.6 billion a year on administrative complexity, including billing and coding waste.
- There is a risk that focus on regulatory issues and administrative requirements means that patients’ needs are not always taken into account. The revenue cycle includes a variety of components, each of which, if not managed well can result in a suboptimal experience for the patient.
Technology - With a "Human Touch" - is Key
The article goes on to quote a Brookings Institution report entitled A Dozen Facts About the Economics of the US Health-Care System:
Surprise billing is associated with high health-care costs. In a well-functioning market, consumers are able to observe price and quality differences between different options. Health-care markets often fail to meet this standard.
The problem is only exacerbated by the pandemic. There is no question, the article goes on to note, that healthcare providers will need to optimize their RCM operations by adding technological capabilities -- mixed with the "human touch" -- to effectively and efficiantly collect data and drive analytics.
To achieve this RCM systems must be automated. However, healthcare providers also need to know how to incorporate the human touch, something that is especially important given the nature of the sector. It’s essential during the design, implementation and execution stages to include input from all stakeholders, especially, as the Northwell Health writers argue, patients. This involves a clear explanation to patients of issues such as the difference between estimates and final costs. RCM systems and other administration need also to ensure that patients are made aware of the risk of insurance denials and opportunities for accessing the Affordable Care Act provisions, as well as navigating Medicaid provisions and charitable support options.
Healthcare providers should also ensure that their RCM systems are ready to incorporate and exploit technologies such as Artificial Intelligence (AI), Machine Learning and the use of bots. AI can be used to predict additional health treatments and cost for patients as well as the risk of denial by an insurer among other issues.
Managing a Consumer Culture
Healthcare is becoming more and more consumer oriented, and, by necessity, patients are often forced to "shop around" for the best price:
Healthcare providers will need to optimize their RCM operations by adding technological capabilities to collect data and drive analytics. Payer scrutiny of compliance and charges by both government and commercial operators is becoming increasingly stringent. Meeting this challenge requires enhanced tracking and management capabilities in the RCM function, with interested parties embracing value-based reimbursement structures.
On the positive side, the COVID-19 pandemic accelerated the healthcare digital transformation by acting as the "catalyst" for positive technology deployment, with a major uptick in leveraging Artificial Intelligence and Machine Learning technology.
We've recently noted that the industry -- led by Aetna -- is looking to move towards more electronic payments, particularly electronic EOBs. Healthcare providers, RCM companies, clearinghouses, and billers will need to deploy a hybrid automation strategy leveraging electronification of EOBs to not only adapt to the changes from payers, but also meet the needs of the consumer culture and transparent billing.