Revenue cycle management is increasingly complex. Hospitals are assuming increased risk in their contracts, and there are changes in payment mechanisms taking place that are putting additional pressures on ensuring revenue integrity. At the same time, compliance is becoming more challenging, access to technology is becoming a greater differentiator in revenue cycle management efficiency and effectiveness, patients are demanding a more retail-like service experience, and hospitals are going through multifaceted affiliations with other healthcare organizations—whether it be hospitals or physician practices—that are changing their business office processes dramatically. Many healthcare providers are feeling overwhelmed, where they either don't have the time or the depth of expertise necessary to focus on each of these areas to the level desired while continuing to focus on clinical quality and the delivery of patient care.
We provide leadership, experience, and technology to partner with hospital leadership teams and tackle specific needs, such as advancing business intelligence or ensuring compliance, or we can take the whole revenue cycle function off their plate. Currently, we provide full-service revenue cycle operations to more than 225 hospitals.
We also help to reduce cost pressures—on average, our clients see a 10 to 20 percent reduction in costs—and, in many instances, we boost net revenue from 1 to 4 percent.
So we're pleased to provide more capabilities to their operations while adding value at the same time.
There are a number of factors, but we believe the following are particularly important when choosing a partner.
Prioritize healthcare experience. Having walked in the shoes providers walk in is most important. How long has the leadership team worked in the provider setting? How deep is the team's understanding of hospital operations and finance? Do leaders really understand what kind of impact their services can have on a hospital's income statement and balance sheet—for good and ill? Where do the company's operational expertise and best practices come from?
A management team from banking, manufacturing, or other industries simply won't have the same perspective as those who truly understand the needs of hospitals and the industry's particular business dynamics and regulatory issues.
Consider contribution to bigger-picture goals. Also, the vendor's overall value proposition should align and support the organization's vision. Reducing costs may be a key aim of the arrangement, but other factors that influence the business also should be considered, such as improving net revenue and cash flow, reducing compliance risk, driving technology improvements, and positioning the organization to respond to changes in payment and care, including integration across care settings.
Seek advancement of business intelligence. What are their analytics capabilities? How are they developing processes to support evidence-based decision making? Also, what is their track record with innovation? How will they help the organization recognize where it needs to be? An understanding of data and how to apply evidence to process improvement —whether with the vendor or healthcare organization— is necessary to stay at the forefront of the industry.
Demand customization. A diverse range of services is a distinct plus in selecting a vendor. However, hospitals also should look for a partner who takes the time to identify an approach that meets the hospital's specific needs instead of pushing a particular package.
Align around principles and standards. Whether a vendor is providing a complete revenue cycle operation or serving as more of a business office extension by collecting bad debt or handling Medicaid eligibility,
the company should adhere to the same principles and standards that the healthcare organization's reputation was built on.
Foster effective communication practices. Another factor that's highly telling in terms of a company's poten.tial as an effective partner is its eagerness to engage with its customers. Parallon's most successful relationships are with organizations that are tightly integrated with us, from governance and communication to reporting of metrics. Simply signing a contract and handing off the business bodes less well for a hospital. Ideally, everyone works together, collaborates well, and focuses on results. As such, the vendor should have tools and mechanisms in place to ensure ongoing communication and accountability.
Cultural fit is imperative. Hospital finance executives should look for someone who shares their values and has a strong reputation in the industry. Also, the vendor should have a patients-first approach to delivering services. Because that's the reason for all of this: caring for patients.
I think it's also important to see how companies serve current customers: What do their core values look like in action? Do they pride themselves on delivering top-quality service? Do they have sound quality controls in place in all areas of their business? Do they treat people with respect and appreciate the hospital's mission?
These types of considerations are as important, or even more so, than the financial equation in selecting a partner, especially with a large-scale outsourcing agreement.
Parallon offers a number of insights through white papers and case studies covering a variety of healthcare business topics. These pieces can be found by visiting parallon.com/insights.