One healthcare executive has stated that hospitals ought to focus more on internal factors versus external ones when it comes to working on a hospital revenue cycle management turnaround. That means that healthcare executives should stop blaming market factors for their unimpressive hospital revenue cycle performance. Instead, they should turn their attention to shrinking hospital margins and lagging accounts receivable.
Per Healthcare Management Partners Managing Director Derek Pierce, if a hospital is unable to collect their cash quickly enough, it may mean that management is not focusing on the right things. That’s exactly why when certain key hospital revenue cycle performance metrics appear to be declining, Pierce advises hospital executives to turn to their internal management processes to start their turnaround.
Sure, factors such as population density, local market power, and geography could still affect a hospital's bottom line, but focusing on factors that you cannot directly control would not help increase your hospital's revenue. Instead, Pierce believes that it's better to start with an "inward-looking analysis" first.
Specifically, Pierce said that there should be more focus on monitoring two critical metrics: the days in accounts receivables and total hospital margins. In fact, the accounts receivable can be used as a reliable ratio when trying to determine if hospital revenue cycles are deviating from industry standards.
Focus on Accounts Receivable Needed
In addition, hospitals should also focus on maintaining their accounts receivable days in the high 30s. In fact, this is often the range goal for numerous for-profit health systems and most hospital chains. In contrast, having an average hospital accounts receivable days of 50 or higher could indicate that there are significant management challenges.
One of the best ways to reduce accounts receivable days is by identifying which of the hospital's business operations and revenue cycle management components are causing the delay in the revenue capture. Typically, this involves claim denials and patient collections for most hospitals. Hence, there is a need to implement some point-of-service patient collection strategies as well to improve registration processes to boost accounts receivable performance.
Aside from this, it’s also advised that hospital executives track hospital margins in order to evaluate their revenue cycle efficiency. This margin could include the total margin, operating margin or even the profitability ratio. According to Pierce, three percent could be the goal for hospital margins. In fact, this level allows hospitals to keep reinvesting in some new technology and acquire more equipment to treat patients.
Getting Physician Assistants Can Help, Too
Meanwhile, a recent report has also revealed that getting physician assistants can also be key to significantly improving a hospital's revenue cycle. This is because a recent study from Health Affairs showed that physicians typically spend the same amount of time when it comes to office visits (3.08 hours) and desktop medicine (3.17 hours). Desktop medicine often involves communicating with patients using a patient portal and responding to various prescription refill requests as well as providing medical advice.
It’s now believed that the key to making physicians more efficient is by delegating such administrative tasks to physician assistants instead. In this set-up, physician assistants can take charge of filtering important patient and staff messages and even documenting some key patient concerns before they enter the exam room. This way, the physician could have more face-time with their patients. This could also help lower physician appointment wait times which have already increased by 30 percent in 2014. Moreover, adopting the physician assistant staffing model could also enable hospitals to provide additional and new services in order to help further bring up revenue.
As a hospital, you need to be smart about improving your bottom line. Scrutinize various internal factors to see what can be done to increase revenue capture. You can also consult with a revenue reimbursement specialist to help make your hospital revenue cycle much more efficient. This way, you can ensure that you would have more than enough resources to cover the cost of hospital operations and acquire new technology and talent at the same time.
How Adding Physician Assistants Improves Hospital Revenue Cycle, revcycleintelligence.com
Key Ways to Start A Hospital Revenue Cycle Turnaround Process, revcycleintelligence.com
Categories: Hospital Revenue Cycle Management