While the pandemic has finally faded and hospital volumes have returned to pre-covid levels, one would have thought that the worst is over. We are looking at new challenges – unprecedented inflation, recessionary outlook, and the worst of them all – a never heard of before shortage of clinical and administrative personnel.
Excessive work pressure on clinical workers has led to the burnout of nurses and doctors. Many experienced and tenured nurses opted for early retirement, and others have chosen to move to other roles. Some hospitals made the mistake of laying off administrative workers due to increased financial pressures. The job shortage is a significant concern and leads to patient dissatisfaction, placing a question mark on the healthcare system to provide timely care even in life-threatening situations.
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Staffing Crisis – Impact on the Revenue Cycle
The healthcare industry is in a peculiar situation. Lack of experienced staff in revenue cycle functions – front-end, mid-cycle, back-end, reporting, and analytics – leads to patient and physician dissatisfaction, delays in claims filing, and, consequently, delays in cash realization. Payers are not immune from the staffing crisis as well. They are facing an acute shortage of administrative staff. As one industry analyst commented, “It is a perfect storm.”
We are witnessing the rise of another trend – remote work. Hospitals barely know how to recruit locally. The workers who began to work remotely now have more options. They can work for any hospital, healthcare system or aggregator, or company outside of the healthcare sector, anywhere in the US, creating a war for talent. The unprecedented inflation is forcing workers to look for the best offers available. The competitive market for talent is leading to higher salaries, sign-on bonuses, reliance on local contractors, and investments in recruitment teams and technology. While larger hospitals and healthcare systems have the wherewithal to invest time and money, the smaller critical access hospitals and rural hospitals face the brunt. News of closures of these hospitals is not uncommon.
Outsource. Offshore. Automate.
There is no magic wand to solve all the issues in healthcare today. Hospital CFOs and revenue cycle leaders must deploy creative strategies to extract the most from their revenue cycle. Outsourcing and offshoring are essentially two prongs of the same strategy of getting access to a labor pool that is available on demand. While outsourcing domestically can get you the skills you need to work the revenue cycle, you may incur higher costs. In the current situation, most hospital CFOs will take it. Many hospital CFOS are not averse to adopting offshoring as a strategy to gain access to a global workforce.
There’s more to offshoring and outsourcing than mere lift and shift of labor. CFOs must find partners who can address many of their other challenges—for instance, gaining access to technologies such as workflow and AI-powered process automation tools. Contrary to popular perceptions, credible offshoring and outsourcing service providers are more than labor contractors, and they have processes, systems, and infrastructure that most hospital CFOs can only dream of.
Benefits of Revenue Cycle Outsourcing and Offshoring
The value of outsourcing and offshoring goes beyond costs and the ability to deploy people on time. Healthcare CFOs can change how they view the revenue cycle with the right partner. Service providers undoubtedly enable access to a global talent pool, which can reduce your costs to collect dramatically. But the real impact is on outcomes.
Here are some benefits that a great revenue cycle services partner can bring.
Labor pool
Gain access to a global talent pool with structured training processes for denials and appeals, medical coding, performance analytics, and more.
Offshore medical coding has come of age. The coders have clinical backgrounds, and many have requisite certifications from AHIMA and AAPC. The service providers are now investing in certificates and continuing the education of their medical coders.
Offshore providers can automate recruitment and onboarding processes such as sourcing, testing, interviews, selection, and training. This gives the assurance of a steady supply of high-quality labor.
Focus on revenue cycle outcomes
Improvements in clean-claim submissions, reduction in days in A/R, and accelerated cash realization
Improved coding quality and physician education programs to enhance clinical documentation
Payer relationships and expertise
Payers are facing the same situation of staffing challenges. For larger healthcare systems and hospitals, the partner’s expertise in managing payer relationships and reducing the effort required to follow up and address denied claims is a critical criterion for choosing the offshore provider.
Service provider’s technology investments and automation capabilities
Service providers have a much higher volume than an individual healthcare system. They invest in technologies such as workflow automation to track individual tasks and improve human productivity.
Service providers like Access Healthcare have significant investments in AI-powered robotic process automation tools, which can automate routine tasks.
Process rigor
Operating revenue cycle programs is like running a marathon. There are no quick fixes. Your team must be committed to doing the same things repeatedly. Workflow automation can take team members on a tight swim lane and enable them to focus on the task.
Digital governance tools have also become essential for tracking the behavior of employees during work hours. In the new normal of remote working, digital governance tools can help you raise awareness about unproductive time and instill a focus on productivity.
Structured transition processes can help build revenue cycle policies and procedures, making it easier to train people and reduce reliance on experienced staff who are the go-to resource for process-specific questions. Documented policies and procedures are a necessary first step in automating processes.
Extensive and rigorous training regime followed by offshore service providers improves quality and compliance with the ever-changing healthcare business rules. These training programs improve quality and outcomes.
Cost savings
Cost savings accrue from labor arbitrage, reduced facilities and infrastructure costs, and improved utilization of resources.
Additionally, access to workflow and AI-powered automation technologies converts CAPEX to OPEX at a fraction of what it would cost to implement and run these technologies in-house.
Quality is technically free as the service provider bears the audit investments as part of the FTE or the transactional charges. They typically have exacting standards for auditing a statistically valid sample of processed transactions. Not only does the process quality improve, but you are also not paying for it directly as you would within your in-house operation.
Adapting Your Revenue Cycle to the New Normal
Shortage of clinical and administrative personnel is a multi-year trend that will be further accentuated by the rising demand for healthcare from the aging population. Hospitals may not return to the pre-pandemic normal in terms of patient visit volumes as increasing demand for hospital-at-home, telehealth, and reliance on ambulatory surgery centers for non-critical surgeries. Hospitals must find
innovative ways to manage their revenue cycle with rising costs, declining reimbursements, recessionary trends, and a shortage of revenue cycle personnel threatening their financial success. As they adapt alternate strategies such as outsourcing, offshoring, and automation, they will need to manage change to transition their operations to service providers, create frameworks to manage the relationship, and strategically manage their revenue cycle.
Offshoring and automation can bolster productivity, bring multi-year cost savings, improve outcomes, and facilitate revenue cycle management by the numbers.
Key Learnings
Hospitals and healthcare systems face multiple headwinds – rising costs, declining reimbursements, acute labor shortage, and a prolonged period of negative margins.
The onshore talent pool is in high demand. In many cases, the fight for talent has become prohibitively competitive as experienced resources have the flexibility to work for hospitals across the nation.
Hospital CFOs can anchor the financial turnaround of their organizations by adopting offshoring. They must create effective management and governance frameworks to gain insights into the performance of the revenue cycle. Simply put, they must manage the revenue cycle by the numbers.
A mature partner can bring the people, processes, and technologies to allow you to scale the operation on demand.
Strategic partnerships can help you arrest revenue leakage, accelerate cash flow, and improve quality at a significantly reduced cost.