The Numbers Don't Lie
Just in case you somehow missed the trend, the healthcare business process outsourcing (BPO) industry is growing at a rapid rate. Black Book Market Research’s annual Satisfaction Survey of all RCM stakeholders uncovered that nearly half (45%) of struggling hospitals in the U.S. have immediate plans to implement a full RCM outsourcing strategy. By 2016, the outsourcing market will reach $9.9 Billion, over a $2 Billion jump from the 2014 numbers.
In fact, the global market is estimated to grow to $50.4 billion by 2018, according to a new report by MarketsandMarkets. What’s the driver behind such historic growth in a recently shaky healthcare marketplace? Many experts in the industry attribute it to healthcare BPO companies’ abilities to provide exceptional solutions for some of the many obstacles and challenges facing healthcare organizations.
Mid-size and large regional hospitals are hiring first-party vendors at a rapid clip and the trend for full and complete A/R outsourcing is booming. But it’s not just A/R solutions being sought by CFOs, Directors of Patient Financial Services and other hospital executives. To meet the growing demand for full service business process solutions, first party vendors service offerings are expanding just as fast. Insurance found strategies, branded statement generation, denial claims management and payment processing are just a few of the services transforming the way mid and large healthcare organizations manage their revenue cycle activities. Have you noticed outsourcing proliferation over the last several years? The reasons make sense:
1) Expense Reduction is Instant
While it may not have been the intention, The Affordable Care Act has driven thousands of additional patients into the healthcare system. More patients should mean more money for the hospital, but stringent and confusing Medicaid reimbursement rules make that a slow-moving process. Instead, hospital expenses for delivering care to the new masses are increasing drastically. Hoards of new patients are coming into the system and it’s not cheap.
As healthcare organizations grow due to this increased demand in services, management must do their best to reduce costs without destroying the quality and reputation of the hospital. This is no easy task as overhead costs typically skyrocket due to expansion (increasing staff, space, equipment and training for it all).
Enter BPO companies who can immediately relieve the financial burden of staff overhead and inefficiency. By eliminating the need to hire, manage, and house an internal team that handles revenue cycle tasks, first party vendors can drastically reduce your expenses on Day One. No more training, hiring, firing, dealing with compensation and benefits packages, plus, because early out vendors do nothing but handle outsourced business services, they are experts who understand how to get you the most money possible from patients and insurance companies with outstanding balances.
2) Banish ICD-10 Anxiety and Pressure
ICD-10 is not something that healthcare institutions are taking lightly, although by now you might feel like it was all just a big dream that never came true! In some organizations, ICD-10 has caused widespread panic and fear over whether or not the infrastructure and talent can handle such a change. And even though it’s completely true that ICD-10 will likely carry with it a pretty significant learning curve, it doesn’t have to topple your institution. The key to staying productive and profitable once ICD-10 finally arrives is proper planning, communication and attitude. Morale challenges will be prevalent and without a plan, the change won’t be pretty (or cheap).
Cash flow from insurance reimbursements is almost guaranteed to dwindle as claims get backlogged. Patient service times are likely to increase as your staff copes with learning thousands of new codes- this either means you’ll serve fewer patients on a daily basis or you’ll hire additional medical professionals to keep patient volume steady. Either option is costly. If you’re not prepared when ICD-10 comes a knockin, your organization is guaranteed to suffer.
It only makes sense that hospitals and large physician practices are leveraging the expertise and services of BPO companies to avoid potential ICD-10 catastrophes. Outsourcing your revenue cycle tasks is an effective way to mitigate any losses during the transition. The best vendors have skilled insurance teams trained to quickly get you the most payer revenue possible. Their customer service teams are also trained negotiators who know how to maximize early out collections. Plus, outsourcing your revenue cycle processes either means a drastic overhead reduction for your organization, or the ability to redeploy and reallocate current staff to areas where they are more needed or can be more effective. Surveys of hospitals engaged in an RCM outsourcing strategy show that 80% of them saw a 6% increase in revenues in 2014. Having a plan to reduce expenses and increase revenues in the midst of ICD-10 isn’t a nice-to-have, it’s imperative to the financial health and stability of your organization.
3) Patient Satisfaction/Retention is Improved
In today’s healthcare ecosystem, phenomenal customer service is a must have. Patient consumerism is a real thing and the retention rates you once relied upon are likely a thing of the past. If you’re not constantly evaluating your patient satisfaction scores or ability to improve patient perception, you’re missing a huge opportunity to keep your patients from choosing another healthcare provider for their next medical need. One easy way to make patients happy is the customer service experience they encounter when paying a bill. Unfortunately, customer service reps don’t always deliver the exceptional experience that keeps a patient “coming back for more”. In fact, crappy customer service is one the quickest ways you can lose a patient. This is amplified when an unsatisfied or disgruntled patient tells friends and family about the poor experience. Patients are never going to enjoy paying their bills (hey, that money could be the difference between a vacation or not this year!) but you can avoid making them despise the payment process if the customer service they receive is friendly, respectful, empathetic and helpful.
First party outsourced vendors worth their salt value your patients full satisfaction and treat them with dignity. The best healthcare BPO solutions care as much about your brand and reputation as you do (and if you get the feeling they don’t, it’s time to choose a new partner!) In fact, they are specially trained to increase the satisfaction of your patient, while getting you the maximum collection amounts available.
When patients realize that they are not just another “coin in the bucket” they will trust your organization. A/R reps who are truthful and forthright about their patient’s individual situation, preserve and enhance current patient relationships which ultimately leads to improved retention rates.
Don't Be Late to the Party
If you're already working with a first party vendor to manage your revenue cycle activities, you got the memo early and hopefully you're feeling really confident in the engagement. Don't forget the importance of continuously evaluating the results and metrics they're achieving. If you're not yet aboard the outsourcing ship, you have a significant opportunity for cost savings and positive revenue impact awaiting you. How exciting!