If you are trying to save money in the healthcare industry, you are probably familiar with the importance of revenue cycle management. However, this process can be costly and time-consuming, and it often fails to help your organization sustain financial sustainability. That’s why it’s essential to develop economic models that take into account the revenue cycle, along with all its associated costs. Here’s a brief explanation of how revenue cycle management can benefit your business.
Managing the revenue cycle is a complex process.
Revenue Cycle Management (RCM) is a complex undertaking that helps healthcare organizations keep their lights on and their staff paid. It is a series of interrelated processes that begins even before a patient makes an appointment with you. Various tasks are associated with A/R management, including ensuring the patient is eligible to receive treatment and explaining their responsibilities. With effective RCM practices, your practice can improve patient care and increase your bottom line.
The healthcare industry is made up of basic building blocks, including payers. The income of practitioners depends on the revenue that they generate. It can be not easy to collect when reimbursements are down, but it is essential to stay in business. Managing the revenue cycle requires cross-training and a team that works well together. Physicians must hire a team that has extensive experience working in Medicare and who understands the importance of managing patient accounts receivables.
It is time-consuming
Revenue Cycle Management and Financial Modeling are both very time-consuming processes. Still, if they are done correctly, they can help free up your staff to focus on caring for your patients. Automating the revenue cycle will help you convert a manual process to an automated one and will free up more time for patient care. In addition, by using medical billing software, you can track all episodes of patient care and link administrative data with clinical data. Revenue Cycle Management helps you unify the clinical and business sides of healthcare, combining administrative data with clinical data to provide meaningful information to decision-makers.
The traditional approach to revenue cycle management fails to provide actionable insights into crucial revenue cycles. Rather than measuring and comparing the performance of individual departments, you must look at the whole revenue cycle as a whole. You can improve the financial and operational performance of your organization with data-driven insights, and revenue cycle management can be an integral part of this. But how do you measure and improve your performance? You must know what metrics are essential. Determining and tracking the right metrics are foundational for short-term success.
It is expensive
You may wonder why revenue cycle management and financial modeling are so costly for health care providers. This matches a patient’s journey with a healthcare provider’s services. It begins when a patient makes an appointment and ends when the patient pays their bill in full. It touches almost every aspect of a patient’s life and helps with financial planning. Increasingly, healthcare providers are shifting from a fee-for-service model to one that is based on a value-based care model. This is a challenging transition for revenue cycle management professionals, as patients are shouldering more of the cost of healthcare. In addition, two-thirds of patients worry about unexpected medical expenses.
While this type of outsourcing is nothing new, it is a trend that is gaining momentum due to several factors. Outsourcing revenue cycle management services are becoming less expensive, and the talent pool has expanded. The deadline for ICD-10 implementation and increased regulations will further exacerbate the need for healthcare financial modeling and revenue cycle management.
It fails to drive financial sustainability in a time of crisis.
It is a common perception that Revenue Cycle Management (RCM) and Financial Modeling (FinM) are ineffective in driving financial sustainability, but this is not the case. The financial models that are most commonly used by businesses fail to account for these issues. This lack of understanding is exacerbated by the fact that financial models are not necessarily predictive of future events.
Despite the increasing urgency to optimize revenue cycle performance, some health systems rely on outdated methods that have failed in the past. Although these methods have worked in the past, they will not ensure the financial sustainability of healthcare systems today. To maximize revenue cycle performance, a health system must act quickly and implement a data-driven revenue cycle strategy. Once the right data is collected, and the correct metric is defined, revenue cycle optimization can begin.