There is little doubt that the healthcare industry is experiencing revolutionary change. The effects on care delivery organizations are profound. One analyst predicts that a third of healthcare providers will close by 2023. A recent survey revealed that nearly 60% of healthcare physicians say the practice of medicine is in jeopardy and that six in ten plan on early retirement in the next few years. Increased shifts in payment from commercial insurers to Medicare/ Medicaid combined with the aging boomer population promises to put additional pressure on margins. Increased revenue from the Affordable Care Act (ACA) is expected to be offset by increased administrative costs due to its implementation and the added compliance requirements from ICD-10. Healthcare costs are increasing twice as fast as the rate of inflation. US healthcare providers margins are expected to shrink by as much
as 20% over the next decade. Inadequate Revenue Cycle Management (RCM) may be costing providers 3%-5% which translates to millions of dollars for a mid-sized organization. It all adds up to a major financial challenge for healthcare organizations. To survive that challenge and thrive in the coming turbulent environment, Chief Financial Officers (CFOs) must aggressively transform their revenue cycle. Emphasizing the importance of RCM is nothing new. Optimizing the revenue cycle while improving the quality of care is imperative for today’s healthcare providers. Those organizations that commit to taking the next step from Revenue Cycle Optimization to Revenue Cycle Management Transformation (RCMT), however, will be the ones who end up as industry winners.
Reaching Peak Performance
To achieve the excellence in performance, teams continually examine the way they perform, benchmark their performance against themselves and others, and make adjustments that enable them to perform better. Your medical practice can achieve similar levels of success – driving more revenue with less work, controlling operations and strategic direction, and achieving practice excellence. Despite all this potential, most practices operate well below their performance and revenue potential, simply because they’re too overwhelmed to do everything needed to succeed. They don’t have enough time in the day to focus on improvement, because their time is consumed by
day to-day tasks, such as submitting claims, reviewing claim acknowledgement reports, posting EOBs, looking online for claim statuses, and so on. They don’t have the guidance, tools, or visibility into the practice to track their – and their payers’ – performance. Without that visibility, they can’t know what financial health looks like and how to achieve it. As a result, they face declining reimbursements, leave unclaimed cash behind, and struggle with poor cash flow.