How a hospital manages its revenue cycle can make the difference between a favorable and unfavorable bottom line. Insurance denials and self-pay failures are two of the most common causes of income loss for businesses. Other factors that contribute to underpayments and overpayments are missed charges, delayed payments, and rework expenses.
By Team Savant
Image: Adhy Savala
When the 2020 COVID pandemic hit, procedure volume and income dropped sharply, affecting revenue. In reality, total healthcare spending fell nearly 9% in Q2 2020 compared to Q2 2019. While revenues increased in Q3 and Q4, total healthcare spending fell 1% in 2020 compared to 2019. Physician offices and ASCs lost the most, 3.8 and 2.7 percent, respectively. While Q2 hospital revenue fell 5.6%, improvements in Q3 and Q4 resulted in a net rise of 0.1% over 2019.
While recent quarterly growth is encouraging, healthcare leaders should not get too excited. A new Kaufman Hall research estimates a $53 billion reduction in healthcare income in 2021. That being said, reducing losses and increasing revenue in hospitals can encourage growth across the sector. Below, we look at some ways you can do just this.
Streamline Medical Technology
The cost of supplies and technology typically accounts for 13 to 20 percent of a hospital's total operating budget. Health-care organizations must collaborate with doctors to conduct evidence-based assessments of technology purchases, achieve consensus among employees on those reviews, and minimize procurement costs. Hospitals should also utilise the clinical consensus among medical staff members and scientific evidence to tighten drug formularies and reduce the cost of drugs that they purchase.
Invest in hospital contract management software with incredible accuracy to help you keep on top of payments both in and out and maximize payments to give you a clearer idea of your financial status and the contract you hold with suppliers.
Data Mining
Hospitals have an abundance of data, but they are not utilizing that data to its maximum potential all too frequently. By refining their analytics, they can identify cost-saving opportunities that apply to all patients. The use of data by certain executives to design techniques for improving operations and attaining cost reductions is based on "forecasts of cost factors both in the care process and in administration," according to the CDC.
Increase Offerings
Customer retention and engagement throughout the care process are excellent ways to increase patient referrals and increase patient retention. While these strategies can undoubtedly increase healthcare income, providers should try to improve the quality of their services as well.
In addition to ensuring that your facility is well-prepared to handle whatever comes its way, expanding its options can give you a competitive advantage in the marketplace. In addition, if your facility provides treatments that other nearby providers do not offer, or if you invest in technology that streamlines care and/or improves the patient experience, you will attract more patients and receive more referrals. Here are a few examples of expanded offerings to consider:
Patient transportation
0% interest payment plans
Remote monitoring devices for patients
Assistance with scheduling appointments, reminders, and navigating help
Online information portals such as procedure instructions or videos or self-help information
Add on services such as complementary therapies
Minimise Claim Denials
Claims denials are another source of income loss in the healthcare industry, with an annual average of 10% of claims denials occurring at the time of initial submission. In fact, providers lose billions of dollars per year due to denied claims, and the situation is likely to worsen once the PAMA mandate takes effect in its entirety in January 2022. According to the findings of a recent study conducted by Change Healthcare, 86 percent of refused claims are preventable. Furthermore, more than half of all denied claims result from difficulties that occur at the beginning of the revenue cycle.
Cut Corporate Overheads
Every company is constantly faced with the necessity to compete and preserve its leading-edge status. IT security, data systems, digital technology, human resources, and compliance spending are increasing, resulting in surges in corporate service costs of up to 10 percent per year, which frequently outpace revenue growth. It is critical to keep such costs under control.
Improving your bottom line can allow you to improve how you work and reduce losses. Having effective methods in place to support patients while remaining profitable can seem like a complex battle; there is no denying it isn't an easy balance to find, but constantly assessing how you are working and how you can improve can allow you to make positive changes to support the work you do.