The healthcare revenue cycle of the future

Margins are showing signs of improvement, but revenue cycle leaders still must grapple with top of mind issues like high expenses, staffing shortages, and a challenging regulatory environment. In the face of those challenges, it can be easy to slip into being reactive instead of planning for the long term. First, separating myth from fact helps to show which methods are likely to actually move the needle in the years to come, and which may end up creating more problems down the line.

Now is the time to plan for the next five or even ten years. To help us imagine what the revenue cycle of the future might look like, we enlisted the help of Cheri Kane, a revenue cycle executive performing transformations on some of the largest healthcare systems in the country. 

In this interview, Kane examines the top challenges facing the industry today, takes a look forward at what the revenue cycle of the future might look like, and explains how we get there from here.

Q: What percentage of healthcare revenue cycle departments that you work with would you say are understaffed right now?

Kane: I would say 100% of all revenue cycle departments are understaffed and struggling. Most hospitals are fighting a losing battle to hire, train, and staff their departments. Hiring is difficult at best and salaries are skyrocketing at a dizzying rate. Hospitals need to look now for immediate technology solutions to maintain and improve their operational efficiencies and results. 

Q: What will happen to revenue cycle departments that keep trying to solve problems by adding more staff?

Kane: It just isn't possible to add more staff in today's environment. There is a tremendous push to reduce costs now. Some hospitals I have spoken with are expecting to have a $60M swing in salary and supply costs, and more than 60% of all hospitals are expected to have a financial loss in 2023. Every single hospital I speak with is looking for ways to reduce costs — so adding or replacing staff is not an option for many hospitals.

Q: Where do you see an opportunity to decrease reliance on staff?

Kane: Anywhere a patient can complete a process in a self-serve way. Hospitals today must start thinking about how they can utilize new technologies and help patients learn to use them. COVID showed us it no longer makes sense for a patient to come to the hospital and wait to be registered when they can do it from their car or at their kitchen table. 

Digital creates a better patient experience, saves staff time, and enables health systems to be proactive in collecting registration data and verifying insurance prior to the patient’s arrival. It also increases the time that the clinical departments have to perform the patients' services, which can potentially increase revenue. It is a "win-win" for the hospital and the patients.

Q: How do you see RCM leaders trying to address this problem today? And for those who don’t know where to begin, what’s the first step?

Kane: I don't think revenue cycle leaders are moving as quickly as needed to implement automation. I believe it won’t be long before many organizations find themselves outdated and potentially closed. Patients will learn where there is an “ease” to the service and seek out those providers. 

The first step is for revenue cycle leaders to look at their high-cost staffing areas and areas where they can't hire employees. Then, they must seek out technology to fill the gaps. With each solution, leaders must evaluate the return on investment and prioritize those solutions that drive the largest financial and operational results.

Q: What are one or two key metrics revenue cycle leaders should focus on to drive operational efficiencies and improve customer service?  

Kane: One is reducing patient wait time and the other is cash. Hospitals are having significant issues with both. For a revenue cycle leader to be successful, they will need to provide a high level of customer service in their departments so that patients keep coming back, decrease operating costs, and significantly increase cash. 

Q: How can providers decrease costs and still increase cash to improve margins this year? 

Kane: Automation, automation, automation. In today's world, bankers and airlines have moved away from having people perform scheduling and banking functions. Most everyone I know uses ATMs and online banking — it is time for the healthcare industry to do the same!

Q: How can RCM leaders set themselves apart this year?

Kane: CEOs and CFOs are seeking revenue cycle leaders to deliver solutions and solve their current issues. Hospitals are failing patients from a customer service perspective and staffing is a cost driver. Revenue cycle leaders need to lead on positive patient experiences while reducing staffing costs by using automation. Those leaders that do will be defined as the "differentiators" and will be sought after by other healthcare systems to drive results.

Q: What does a progressive revenue cycle look like in one year? Five years? Ten years?

Kane: I think the progressive revenue cycle will automate 10% of the work in year one, 50% by year five, and potentially 80% by year ten. All signs point to the number of prior authorizations increasing over time, and there simply aren’t enough qualified people now. We need to empower current team members to take on a growing volume of work.

In years to come, very few patient accounts will require manual intervention. Automation will take care of the easier work, and any accounts that can’t be resolved in an automated fashion will be pushed to a very specialized team to resolve. This will provide a better patient experience and enable team members to spend needed time on complex accounts and exceptions using specialized skills — another win-win.

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Kane is a Fellow in HFMA and MGMA and she holds a master's degree in healthcare from Central Michigan University. She possesses more than 35+ years experience of performing healthcare system revenue cycle transformations for some of the largest healthcare systems in the country. Her expertise is in areas such as cash acceleration, patient access, charge capture, billing, follow-up, denials, underpayment recovery, vendor management, and revenue cycle automated intelligence.