On Hospital Revenue Cycle Opportunities

Do They Still Exist in Today’s Healthcare Milieu?

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For a decade now, healthcare providers have been challenged to deliver quality patient care in an environment of shrinking profit margins. Total margins and operating margins have followed the same trend. Analysts report that an operating margin of less than 5% leaves an organization without the resources to invest in new technology and capital projects, and will eventually force the facility to close or merge. With rising labor costs, a poorly performing economy, and an aging population, these numbers are not likely to improve soon.

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Industry Status

Although the industry has seen an overall improvement in accounts receivable days and bad debt for an extended period, it appears that many facilities have reached their peak in addressing these areas, particularly given current demands to reduce staff and other operational costs. So, where is the next major opportunity for reducing costs or maximizing revenue opportunities?

The Experts Opine

According to private consultants Ross J. Fidler and Karen White PhD, revenue cycle improvement still seems to be a promising and popular area today. And, PriceWaterhouseCoopers recently listed five areas to reinvent the revenue cycle:

1) organizational / accountability;

2) process/workflow improvements;

3) information systems/management reporting enhancements;

4) quality assurance mechanisms; and

5) department and staff productivity measurements.

Assessment

A thorough re-examination of the revenue cycle process will typically uncover cost drains and revenue opportunities.

Conclusion

To succeed in enhancing hospital revenue streams, for example, we commence with patient access through HIM to PFS, by applying optimal organizational structures, benchmarking, and technology adoption. Only then will outcomes trend toward higher performing revenue cycles.

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