Scott MacStravic, Ph.D.
Throughout my career in healthcare strategy and marketing, I have had to deal with the traditional and unavoidable realities of financial accounting. Marketing should be a revenue center, delivering continuous and additional revenue attributable to its research and advertising efforts, plus the operational insights and suggestions it offers based on research and insights into customers.
When I was a marketing executive at “corporate”, in a widely separated system of hospitals, I and half a secretary were the only costs the corporation had to bear, but I was never considered a source of revenue. I mainly offered advice and insights into the administrators and marketing professionals at the hospitals, and was as welcome as most corporate office meddlers, I suspect. But though the costs of supporting my generous salary and expenses didn’t amount to much, when spread across the revenue-generating hospitals, they were an easy target, and eventually, cost-cutting won out.
At my next marketing executive position, I had the joyful experience of changing the perception and treatment of marketing from being a cost center to being a revenue center. Thanks to an opportunity to demonstrate the power of marketing research, advertising and insights in a new program, we eventually were able to show that our efforts yielded multi-millions in additional revenue and margin contributions. We became a profitable revenue center, and enjoyed significant benefits as a result of the switch.
Cost centers have always been the first preferred targets for attention, since cost reductions gravitate immediately, directly, and completely to the bottom line. By contrast, revenue enhancement efforts gravitate more slowly--rarely are the returns on marketing investments achieved, or at least recognized in the same year as they are made. And revenue has to be “adjusted” by the costs of producing it and of handling the added patient volume involved before it adds to the bottom line.
No wonder cost savings have long been the dominant preference in hospitals’ and other healthcare organizations’ strategies.
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Revenue Integrity through Claims Submission and Management by MedAssets MedAssets works with providers to help reduce AR days, increase cash flow, reduce bad debt, and enhance the overall operational efficiency and accountability of the hospital's revenue cycle.
