Due to unrelenting pressures on healthcare providers, the impact of the revenue cycle for healthcare organizations has grown in the past few decades. This is no surprise due to the consistent, and often complex, factors transforming healthcare. These include:
- The introduction and usage of healthcare data analytics and price transparency;
- Increased regulations and complexity in handling third-party and government reimbursements;
- The merging of healthcare systems and other third-party healthcare organizations;
- New and innovative healthcare technology impacting operations (e.g. Robotic Process Automation, Artificial Intelligence);
- The entrance of non-traditional healthcare organizations (e.g. Amazon, Apple, CVS, etc.).
Healthcare providers and their leadership cannot sit idle as these changes occur. Providers are forced to innovate, invest, and even partner with new technology and other operational vendors to secure financial well-being and future operational success. That’s where the critical importance of the revenue cycle comes in. Executive leadership continues to question if their organization should invest in its internal resources or outsource these responsibilities.
There is no doubt the healthcare industry has seen a rise in the revenue cycle outsourcing model over the past several years, with many large organizations selecting vendors such as Conifer Health Solutions, nThrive, and R1. To successfully navigate this trend, here are five areas your executive leadership team should consider.
- Put people at the center of your revenue cycle strategy. With any undertaking of this scale, the workforce and its readiness to take on change are the make-or-break factors in success. These changes could come in the form of rebadging employees or new technology enhancements that include employee training. Regardless, it is important to consider the people aspect and develop a strong communication plan to help drive your new strategic initiative. Remember, people are more likely to buy into changes where they understand the strategic purpose. Helpful Tip: Identify a strong change management team prior to the vendor selection process. This team needs to understand the “why” in order to implement an effective communications plan to staff and other leadership.
- Ramp up due diligence in the vendor selection process. Like in a good partnership, selecting the right vendor is crucial to success and lasting capability. Your organization’s partnership must be built on trust, transparency, and collaboration. Without this, you will be unable to openly discuss and identify the operational gaps you encounter during the planning, designing, testing, and go-live phases. Be sure to have conversations with each vendor you interview over their experience with your patient accounting or EMR system. Additionally, ensure your vendor has had experience working with your type of healthcare organization. If you are a for-profit organization, you will need a vendor who understands the regulatory responsibilities you have to the stakeholders and other investors. Helpful Tip: Ask the vendor not only for client recommendations, but also explore the market for your own case studies and examples. Be sure you understand what went well and what went poorly during the other client go-lives.
- Recalibrate your definition of success. Many executives believe in immediate improvements the second you outsource a business component. Honestly, why wouldn’t they? The truth is your organization is paying for a service in which it has no longer elected to provide or operate. However, your organization will undergo extreme changes in operational processes and technology. With this, your organization will encounter hiccups along the way. Do your best to limit as much business disruption and impact to your operations with an understanding that it could take time to see improvements. Helpful Tip: Define the success outcomes you expect and by when. Additionally, be sure to include Service Line Agreements (SLAs) in your contract. Discuss with your vendor and be sure to allow the appropriate time to optimize the process before any SLAs take effect.
- Consider a phased approach to implementation. As mentioned earlier, your organization will want to mitigate business disruption and workforce change saturation during the transformation process. Conduct a formal review of your revenue cycle process first and rank the areas from strongest to weakest. Often vendors will push to take over as much business responsibilities as they possibly can, but if your vendor is pushing you to relinquish complete control immediately, you might have the wrong vendor. Consider taking a phased, incremental approach based on your organization’s current level of maturity. Helpful Tip: By taking a phased approach, your organization can dedicate the appropriate resources and time necessary to ensure your outsourcing implementation is operating with minimal business process errors.
- Have the proper staff and IT resources available. One of the most precious resources today are those employees who can design and build technology foundations for your organization. Outsourcing your revenue cycle will take a tremendous amount of effort from your IT team. Before committing to this transformation project, ensure you have identified and dedicated full-time IT resources to the project. To ensure lasting capability, you will want to keep key, in-house operational stakeholders involved. The knowledge and experience will be key during the planning, go-live, and optimization phases. Helpful Tip: Outsourcing your revenue cycle does not mean transitioning your entire revenue cycle team. Consider transitioning members of your team into strategic and vendor/performance management.