Some organizations use up to four vendors, each of whom handles different components of the revenue cycle process.
About 30% of health systems and hospitals are unable to manage their revenue cycle automation efforts without at least two vendors, according to revenue cycle management automation company Alpha Health. And another 30% have built internal automation teams, though more than 76% of those organizations are large – with $1 billion or more in net patient revenues.
The numbers were gleaned from a national survey designed to assess adoption of automation in revenue cycle operations at health systems and hospitals across the U.S. It was conducted through the Healthcare Financial Management Association's Pulse Survey program, fielded between May 19, 2020 and June 22, 2020 among 587 chief financial officers and revenue cycle leaders at various health systems.
WHAT'S THE IMPACT?
Regardless of the solution used to automate revenue cycle tasks, the process generally involves three steps: observing and documenting workflows, programming the technology to perform the work as documented, and maintaining the solution as inputs and variables in specific processes change.
It's not uncommon for business process consultants to handle the first step while working with a technology vendor to manage the second and third steps involved in using automation solutions.
Ongoing maintenance can be particularly complex – requiring internal revenue cycle staff to coordinate with both business process consultants and technology vendors to manage changes. As a result, many large health systems invest in building their own automation teams. In these instances, the internal teams may still work with one or more technology vendors.
Part of the issue is that many automation technologies, such as robotic process automation, were originally developed for other purposes in other industries. In some cases they have been retrofitted for revenue cycle operations. This can result in unnecessarily complex deployment processes. That requires sizable investment in maintenance resources, whether with multiple vendors or new internal automation teams.
When asked how many consulting firms and vendors they currently use to automate their revenue cycles, 38.5% said they use one vendor who can do all three steps of the automation process. About 31.5% said they don't use external consultants or vendors, instead deferring to an internal team who handles all of the steps themselves.
Meanwhile, 19.6% use two vendors, one of whom handles multiple steps of the automation process; 4.9% use three vendors, each of whom handles a different task; and 5.6% use four or more vendors.
When statistically evaluated by organization type, health systems and hospitals currently using automation in their revenue cycle operations each use the same average number of outside consulting firms or vendors. When statistically evaluated by net patient revenue, larger organizations – both hospitals and health systems – are likely to use more vendors than smaller organizations.
THE LARGER TREND
Many revenue cycle directors are looking at automation in their departments to save time, speed up the claims process, decrease denials and collect payment faster.
There are many vendors on the market with revenue cycle management technology solutions. Some of these vendors include Cerner, Conifer Health Solutions, Flywire, Guidehouse, nThrive, Patientco, RevSpring and VisitPay.
In a HIMSS20 digital presentation last year, Mark Morsch, vice president of technology at Optum360, cited data indicating that there can be as much as $200 billion in administrative waste in the healthcare system due to inefficient revenue cycle practices.
Hiring data provided by Optum360 illustrates the extent to which administrative spending has increased. Hiring for physicians has increased since 1970, but nearly to the extent of administrative hires, which have grown 3,000% during that time.