What you need to know
While many health systems work with RCM vendors to handle financial transactions at a task level, the true benefits to the revenue cycle lie in forming one strategic, end-to-end RCM partnership. With careful management at every stage of the revenue cycle, this type of partnership can drive sustainable growth, improve patient satisfaction and help to ensure the long-term success of an organization.
Healthcare CFOs must ensure the financial health of a health system, not only through meticulous oversight but through strategic foresight. The choices they make around revenue cycle management (RCM) can have a significant impact on the current and future health of their organization.
The first and most major question many face is how to properly implement RCM processes. Management options have traditionally included:
- Keeping management in house, driven by staff who are primarily focused on care
- Contracting out with RCM vendors, ensuring revenue-related tasks are completed
- Establishing a strategic RCM partnership to drive tech and talent in service of long-term goals
Each of these options can address revenue cycle needs, but only one helps focus and shape the efforts and outcomes that matter the most to a particular health system. Let’s take a closer look.
An RCM partner frees up in-house resources
Effective revenue cycle management ensures that healthcare providers are paid for their services in a timely and accurate manner, critical for maintaining financial stability and supporting care initiatives. However, hospitals and health systems already have a primary mission in place that does not address revenue cycle needs. That mission: providing the best care for patients.
As payers increase their expenditures around artificial intelligence technology meant to assist in denying claims, health systems struggle to keep up with these focused investments, given limited funds and staff available in-house to put toward the latest revenue cycle advancements.
For many, outsourcing revenue cycle management emerges as the best answer — but how a system goes about implementing this process can drastically shift the outcome. There are critical differences between simply signing with third-party RCM vendors versus crafting a robust relationship with an end-to-end RCM partner.
The best revenue cycle management companies are those that understand how to balance proactive management of all aspects of staff and systems with long-term strategic planning to ensure providers continue to be supported at every stage of the revenue cycle.
Traditional outsourced revenue cycle management has limitations
Hiring RCM vendors to handle tasks might seem like a straightforward solution to manage the revenue cycle. After all, most health systems already contract with vendors for a variety of services, including food, janitorial and even pharmaceutical offerings.
It’s critical to note, however, that the aforementioned services don’t require regular interfacing at the executive level, nor are they intertwined with long-term strategies that can make or break a health system’s stability.
Without the integration of a strategic revenue cycle partnership, simply outsourcing on a task level in RCM can fall short in several key areas:
- Transactional relationship: Vendors typically operate on a transactional basis, focusing on the completion of specific tasks rather than the overall financial health of the organization. An efficient and effective RCM partnership will ensure that operators are always marching toward the most critical KPIs in line with an agreed-upon strategy.
- Limited customization: One-size-fits-all vendors may offer standardized solutions that do not fully align with the unique needs and goals of a particular health system. A true RCM partner will customize scope and carefully consider what success looks like on a system-wide basis, ensuring that each organization measures the outcomes that matter to them.
- Minimal executive involvement: Traditional RCM vendors often lack the high-level executive engagement necessary to drive strategic improvements and align RCM processes with broader organizational objectives. An RCM partner should be a partner in more than just name; make sure there’s someone to reach out to when challenges arise.
A true RCM partnership brings numerous benefits
In contrast to the traditional vendor outsourcing dynamic, an end-to-end RCM partnership offers a collaborative approach that extends throughout the revenue cycle. Since a strategic partner plays a role at every stage, it can readily manage any interdependencies that arise, in a way that a vendor operating on a task-by-task basis simply cannot.
This holistic approach unlocks numerous areas of value, including:
Strategic alignment
An RCM partner works closely with the health system to understand its strategic goals and align RCM processes accordingly. This ensures that every aspect of the revenue cycle supports the organization’s broader objectives, from improving patient satisfaction to optimizing financial performance.
Customized solutions
Unlike task-oriented vendors, the right RCM partner will provide tailored solutions that address the specific challenges and opportunities of a particular health system. This customization leads to more effective and efficient RCM processes, ultimately resulting in better financial outcomes.
Regular executive involvement
One standout feature of an RCM partnership is the regular involvement of senior executives. This high-level engagement ensures that strategic decisions are informed by deep industry expertise and a comprehensive understanding of the health system’s needs. Executive involvement also facilitates continuous improvement and innovation in RCM processes.
Enhanced data analytics
An innovative RCM partner can leverage advanced data analytics to provide actionable insights into the health system’s financial performance. These insights enable CFOs to make informed decisions, identify areas for improvement and implement strategies that drive revenue growth and operational efficiency.
Improved compliance and risk management
Navigating the complex regulatory landscape of healthcare requires a proactive approach to compliance and risk management. Because of its strategic orientation, an RCM partner brings specialized knowledge and expertise to help a health system remain compliant with relevant regulations.
Scalability and flexibility
As health systems grow and evolve, their RCM needs may change. An RCM partner offers the scalability and flexibility to adapt to these changes, ensuring that the health system’s revenue cycle processes remain effective and efficient over time.
Each of these factors can significantly enhance the financial performance and operational efficiency of a health system.
The right RCM partner offers a measurable impact
A robust RCM partnership can also provide a significant competitive advantage. By leveraging the expertise and resources of an RCM partner, health systems can differentiate themselves through superior financial performance and patient care. In fact, the benefits of a true RCM partnership often extend beyond financial performance. These include:
- Enhanced patient experience: Efficient RCM processes lead to faster and more accurate billing, reducing patient frustration and improving overall satisfaction. A positive patient experience is crucial for building trust and loyalty, which can drive patient retention and referrals.
- Financial stability: By optimizing revenue cycle processes, an RCM partnership helps health systems achieve greater financial stability. This stability enables the organization to invest in new technologies, expand services and improve facilities, all of which contribute to better patient care.
- Operational efficiency: Streamlined RCM processes reduce administrative burdens and free up staff to focus on more strategic initiatives. This operational efficiency leads to cost savings and improved productivity across the organization.
- Data-driven decision-making: Access to advanced analytics and insights empowers CFOs to make data-driven decisions that enhance financial performance and operational efficiency. This strategic approach ensures that the health system is well-positioned to navigate industry challenges and capitalize on opportunities.
The bottom line
For health system CFOs, the choice between simply hiring RCM vendors and forming an actual RCM partnership is clear. An RCM partnership offers a strategic, collaborative and customized approach that delivers superior results.
Moreover, by partnering with an RCM expert, health systems can focus on their own core competencies — delivering high-quality patient care. This allows healthcare providers to allocate more resources and attention to clinical operations, ultimately enhancing patient outcomes and satisfaction.
With benefits like regular executive involvement and enhanced data analytics, the right RCM partnership can transform the financial and operational performance of a health system. By embracing this partnership model, a health system can drive sustainable growth, improve patient satisfaction and help to ensure the long-term success of their organization.
Your revenue cycle is too important to be left to chance.
Contact Ensemble Health Partners to find out how an end-to-end partner with proven results can help secure your organization’s financial future.