Despite how complex and far-reaching revenue functions are, it's interesting to note that improvement can be dramatic in a relatively short time. Leaders at some of the high-performing hospitals stated that they felt they had poorly performing revenue cycles just a few years ago.

Leaders at these organizations report that a fundamental contributor to such dramatic turnaround has been their improved monitoring of revenue cycle metrics. Organizational commitment to measuring and monitoring performance is key for setting appropriate goals and making process adjustments necessary for achieving these goals.

Some high performers noted that meaningful progress reports help staff best identify those actions that are most likely to improve performance. Also, frequent measurement allows organizations to identify concerns before they become significant problems.

Even though high performers generally agree on the importance of metric use, they vary considerably in both the number and types of metrics they use. Even some traditional revenue cycle measures, such as days in accounts receivable and discharged but not final billed, are not calculated or measured consistently among organizations; ranges for acceptable performance around these traditional measures also are diverse. (Note: Researchers suspect these findings simply reflect an industry need for generally accepted key performance indicators that can be used for benchmarking.)

Although high performers' approaches differ more with use of metrics than they do with other strategic areas of the revenue cycle, organizations do share some commonalities. Notably, high performers tend to examine performance frequently, possess a willingness to look beyond traditional metrics as needed, and place great importance on the consumer's perspective.

Monitoring and reporting frequently

A compulsion for measuring and monitoring performance is universal among high-performing revenue cycle organizations. High performers frequently review their chosen metrics, at least monthly and sometimes even weekly or daily. Although the particular metrics selected may be inconsistent among high performers, these organizations are able to measure their own performance and improvements (or declines) over time.

At many of these organizations, focus is on closing the loop between monitoring and reporting performance to users. Real-time is more frequently finding its way into strategies, whether it be error tracking systems for registrars or call length and abandonment reporting for appointment schedulers.

Case Study: Real-Time Metric Use at Baptist Hospital of Miami

Looking beyond traditional metrics for success

A number of the high performers look at not only traditional revenue cycle metrics (such as net days in accounts receivable, discharge not final billed, or aging accounts receivable categories), but also nontraditional revenue cycle metrics (such as net-to-cash percentage after 120 days and actual collection at point of service by amount owed). Many high performers said such nontraditional measures are useful to better understand the origin of larger trends and identify opportunities for improvement specific to their organization.

Also, many high performers expressed willingness to go beyond traditional measures of return as a means for measuring effectiveness of large-scale revenue cycle initiatives. Rather than making solely a financial case for change, many organizations examine such factors as patient satisfaction or reduced turnover when making their business case. In many instances, those interviewed expressed achievement in these areas as being even more significant to their strategy than results of financial analysis.

Case Study: Nontraditional Revenue Cycle Metrics at CHRISTUS St. John

Seeking the consumer's perspective

Most high-performing organizations are measuring some form of patient satisfaction-for example, relying on Press Ganey scores or feedback from patient focus groups or patient councils. However, many of these organizations are working to improve the specific satisfaction measures they are using and timing of these efforts.

Traditionally, patient satisfaction feedback has been collected prior to the patient's receipt of the bill. High performers, therefore, are looking into ways to assess satisfaction later in the process, so they receive enhanced perspective on billing and collections performance.

Also, although most hospitals' efforts at measuring patient satisfaction are designed around the clinical care experience, organizations are beginning to recognize the importance of better understanding revenue cycle impressions. High performers appreciate that issues such as ease of completing paperwork and understanding billing processes, quality of interactions with admitting and registration staff, and expectations and sensitivities regarding collections can be significant for patients.

Exhibit: Research Finding: Degree to Which Revenue Cycle Is Patient Friendly

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Publication Date: Thursday, November 05, 2009