The single greatest source of rapid performance improvement.
One of the greatest management challenges facing healthcare provider organizations is the revenue cycle.
Recently, one of the leading providers of outsourced revenue cycle solutions projected that, on average, most systems are losing 13% of their total revenues due to revenue cycle leakage.
In light of the above, certainly one of the single greatest pathways to rapid performance improvement is “effective” management of the healthcare revenue cycle.
Having managed revenue cycle process improvements across 14 different systems, I have learned that the most important first step is to understand the major root causes of sub-par performance.
Revenue Cycle: Root Causes of Lost Revenues
Inherently, there are at least four major forces that can adversely impact each provider’s revenue recoveries:
The above challenges are only exasperated by the fact that there are so many participants at the front-end of the process who — if not consistently following a clearly defined set of best practice processes — can adversely impact revenue collections downstream:
Due to this complexity, even a Shared Services approach can gain efficiency savings but miss effectiveness opportunities where the vast majority of revenue lift resides.
Building Distinctive Healthcare Revenue Cycle Capability
The Human Capital Group’s Organizational Excellence practice is focused on helping organizations build distinctive capabilities that materially improve performance in the near term and serve as the engine for sustained success for the foreseeable future.
Within healthcare, The Human Capital Group is focused on helping its clients deploy a Revenue Transformation Office (RTO) within their revenue cycle function. Especially if that function has been outsourced. The RTO provides healthcare provider organizations with an on-going capability for improving revenue cycle management “effectiveness” so as to increase revenue recoveries across an entire national system.
The RTO improves a system’s revenues in five vital ways:
- It ensures higher recoveries by sustaining the adoption, across the system, of revenue cycle best practice processes. Without an established but small continuous improvement team, processes will be inconsistently followed and revenue leakage is inevitable.
- The RTO pro-actively identifies and manages issues before they become material, e.g. registration staff excessive turn-over, new payer requirements, etc.
- It also successfully manages the on-boarding of new payment models, plans, services or devices which are typically some of the major sources of fatal denials.
- The RTO also ensures the creation of a Visible Measurement System so that every participant in the process knows the expected standard of excellence for their role and how they are performing against the standard.
- Finally, the RTO works with the clinical staff and the outsourced revenue cycle vendor to make sure that these best practices extend to the operational and clinical staff who play such a vital role in overall recoveries.
Establishing an RTO is the first step towards transforming your healthcare revenue cycle to keep pace with the dramatic changes occurring in the healthcare industry. With a dedicated team, your organization will effectively lessen the impact of the four forces adversely affecting your revenue streams, and as a result improve organizational excellence across the system.
For more information on building distinctive capabilities for your healthcare organization, contact our team.
Paul Cleckner, J.D. is a Managing Director and Organizational Consultant at The Human Capital Group. Throughout his career, Paul Cleckner has been focused on guiding organizations through transformational change so they can be leaders within their industries for multiple generations. He has served in senior operating roles at Standard & Poor’s, Deloitte, LifePoint Health and Saint Thomas Health.