Revenue cycle management is a strategic topic at most healthcare organizations. Outdated billing processes, incomplete or unexpected charges, a lack of unified bills, and more all lead to patient dissatisfaction, payment delays, and higher customer service, collection and reconciliation costs. These are all compelling reasons to focus more attention on modernizing revenue cycle management processes, but sometimes making the business case can be a challenge.
How can hospitals and other providers decide where to focus their efforts and effect change in modernizing revenue cycle management processes, and how can they measure the impact? Here’s some guidance on how to approach improvements in revenue cycle management processes and the difference those efforts can make.
Modern healthcare revenue cycle management capabilities
Every revenue cycle management solution (and provider organization) is different. For the purpose of this discussion, let’s assume a solution with the core capabilities outlined below and their potential impact. Try to identify those capabilities that align most closely with your own efforts to see which metrics make the most sense to track.
Core solution capabilities:
- A digital self-service patient experience for receiving/accessing bills and making payments
- A consolidated view of charges vs. individual statements from different provider services, e.g., physician, radiology, lab, specialists, etc.
- Alerts for proactive engagement with patients about outstanding balances and payments
- Analytics and some level of machine learning to understand patients’ capacity to pay
- Personalized installment plans to make it easier for patients to settle their balances on terms they can afford
- Automated recording and reconciliation of patient payments through integration with the provider financial system
- Built-in compliance with all legal, privacy regulations and requirements
What are some of the main revenue cycle management metrics to track?
Assuming some or all of the capabilities described above are in place, we can group metrics into six core groups:
Revenue Collections
- Reduction in average Days Sales Outstanding (DSO) for patient bills
- Reduction in total outstanding balance for the provider
- Reduction in patient accounts sent to a collection agency
- Reduction in bad debt write-offs
Patient Billing/Payment Servicing
- Reduction in FTE hours required each month
- Reduction in the number and frequency of complaints related to patient billing and payments
- Increased use of self-service channels
Paper Statement/Check Handling
- Reduction in paper statements, printing and postage
- Reduction in processing payments made by check
- Faster receipt and reconciliation time for digital payments
Patient Satisfaction
- Customer feedback and surveys
- NPS scores
- Reduction in billing and payment-related questions/complaints
Operational Costs
- Consolidation of AR systems across networks
- Reduced costs for system maintenance, management
- Improved financial visibility across the finance organization
Staff Experience
- Better understanding of patient payment status making it easier to provide assistance
- More payment options to reduce patient stress
- Happier staff equals happier customers and vice versa
Every healthcare organization is different, and “mileage will vary” accordingly, but understanding and benchmarking metrics like these are fundamental to any investment in revenue cycle management.
Editor’s Note: Flywire recently commissioned Forrester Consulting to conduct an independent assessment of the impact of Flywire’s digital engagement and payment platform on the metrics above. Download the full report to see the benefits for hospitals and health systems.