The last few years have been hard for hospitals. 2022 was a year of hard hits and it is important for healthcare leaders to rein in escalating costs. The revenue cycle of hospitals consists of many moving parts and departments. At its core, the revenue cycle is a complex business function that requires a lot of investment. With razor thin margins and escalating operational costs it is important for hospitals to eliminate the high costs associated with the revenue cycle of hospitals.
- The Great Resignation.
- Why managing revenue cycle functions in-house may longer be feasible for hospitals.
- How a tech-powered revenue cycle can contain costs.
- And how to eliminate fixed costs and yet build a resilient revenue cycle.
The Great Resignation saw the loss of more than 20% of clinical and non-clinical staff. It has resulted in delayed reimbursement cycles and operational bottlenecks. The current staffing shortage, especially the exodus of RCM workers, has forced healthcare finance leaders to deploy AI and investing in employee retention programs that go beyond bonuses and competitive salaries.
The costs involved in hiring and retaining staff has steadily gone up over the years. Evolving compliance and reimbursement regulations has translated into additional training costs for hospitals and health systems. There are increased instances of worker burnout and loss of productivity.
Hospitals are looking for ways to deliver quality clinical care. To manage the central business office and focus on its key functions such as medical billing and charge capture places additional strain on healthcare leaders. Focusing on growing providers and their practice is critical for healthcare leaders in a competitive marketplace.
Utilizing technology to track the life cycle of claims is table stakes. But unfortunately, most healthcare organizations do not have the resources to invest in the information technology and revenue cycle infrastructure in place required to meet modern demands. Small, rural hospitals, in particular, find it difficult to invest in the technology required to manage claims efficiently. The substantial capital investment needed to deploy claims technology is forcing small hospital to shut their doors.
Aside from the high cost of healthcare technology employing IT personnel to manage downtime's, system upgrades, and other IT related issues, is acting as a major deterrent.
Value based contracts have placed additional demands on RCM teams. It requires different processes and technology to manage value-based contracts. Revenue cycle staff need a deep understanding of claim submission guidelines and data reporting requirements for different value-based models.
In addition to these variation, each payer follows a different guideline, necessitating best-of-class technology configuration and expertise.
To build a powerful and resilient revenue cycle in this context is going to be difficult and very expensive. So, how do hospitals eliminate fixed costs and build the revenue cycle of the future?
Hiring, on-boarding, and training staff costs thousands of dollars for hospitals. With staff retention at an all-time low the cost to replace trained workers can lead to temporary loss of revenue and productivity. Turnover can cost more 30% of a former associate’s salary. Often, the revenue generated annually doesn’t compensate for high levels of inflation and benefit expenses.
Technology is a major cost driver. The claims cycle requires various systems and processes to work efficiently and deliver optimal results. Investing in and upgrading technology is expensive. Partnering with revenue cycle vendors provides the additional benefit of gaining access to RCM technology without having to make heavy tech investments. This effectively lowers tech spend.
Old solutions to new problems don’t work. To build the revenue cycle of the future hospitals must partner with expert revenue cycle vendors to seize on tomorrow’s opportunities today. A RCM vendor like SolvEdge offers the breadth of knowledge and technology that hospitals need to meet new demands and expectations.
How do you build the revenue cycle of the future?
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