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In this Business Profile, Eric Ward, president and CEO, Parallon Revenue Cycle Services, discusses key trends in revenue cycle management and factors providers should consider when partnering to advance their revenue cycle performance.  

Eric Ward ParallonTell me a little bit about your organization.

As one of the healthcare industry’s leading providers of business and operational services, Parallon provides a broad spectrum of customized services with unmatched scale, infrastructure, and operational expertise. Parallon partners with hospitals, health systems, and non-acute care providers to improve their business performance through the company’s deep industry knowledge and proven practices in revenue cycle; technology; workforce solutions; consulting; group purchasing, with our HealthTrust Purchasing Group; and supply chain. We serve more than 1,400 hospitals and 11,000 non-acute provider organizations, operating out of some 70 centers across the United States.

Within our revenue cycle services alone, we have approximately 14,500 employees working in 25 shared services centers servicing a combined 700 hospitals and 6,000 physicians nationwide. We provide full-service, end-to-end outsourcing of the revenue cycle, managing all aspects from patient registration through account resolution. We also offer consultative services and functional area point solutions across the revenue cycle. Our point solutions include self-pay and bad debt collections, insurance collections and extended business office services, third-party liability collections, Medicaid eligibility, and physician revenue cycle services.  

What are some of the biggest challenges that you see facing revenue cycle leaders?

Revenue cycle management is increasingly complex. Hospitals are assuming increased risk in their contracts, and there are changes in payment mechanisms taking place that are putting additional pressures on ensuring revenue integrity. At the same time, compliance is becoming more challenging, access to technology is becoming a greater differentiator in revenue cycle management efficiency and effectiveness, patients are demanding a more retail-like service experience, and hospitals are going through multifaceted affiliations with other healthcare organizations—whether it be hospitals or physician practices—that are changing their business office processes dramatically. Many healthcare providers are feeling overwhelmed, where they either don’t have the time or the depth of expertise necessary to focus on each of these areas to the level desired while continuing to focus on clinical quality and the delivery of patient care.  

How is Parallon helping them manage this complexity?

We provide leadership, experience, and technology to partner with hospital leadership teams and tackle specific needs, such as advancing business intelligence or ensuring compliance, or we can take the whole revenue cycle function off their plate. Currently, we provide full-service revenue cycle operations to more than 225 hospitals.

We also help to reduce cost pressures—on average, our clients see a 10 to 20 percent reduction in costs—and, in many instances, we boost net revenue from 1 to 4 percent. 

So we’re pleased to provide more capabilities to their operations while adding value at the same time. 

Handing off processes to an external partner can be a daunting proposition to many healthcare providers. What advice would you offer for identifying a relationship that will best meet their revenue cycle needs?

There are a number of factors, but we believe the following are particularly important when choosing a partner.

Prioritize healthcare experience. Having walked in the shoes providers walk in is most important. How long has the leadership team worked in the provider setting? How deep is the team’s understanding of hospital operations and finance? Do leaders really understand what kind of impact their services can have on a hospital’s income statement and balance sheet—for good and ill? Where do the company’s operational expertise and best practices come from?

A management team from banking, manufacturing, or other industries simply won’t have the same perspective as those who truly understand the needs of hospitals and the industry’s particular business dynamics and regulatory issues.

Consider contribution to bigger-picture goals. Also, the vendor’s overall value proposition should align and support the organization’s vision. Reducing costs may be a key aim of the arrangement, but other factors that influence the business also should be considered, such as improving net revenue and cash flow, reducing compliance risk, driving technology improvements, and positioning the organization to respond to changes in payment and care, including integration across care settings.

Seek advancement of business intelligence. What are their analytics capabilities? How are they developing processes to support evidence-based decision making? Also, what is their track record with innovation? How will they help the organization recognize where it needs to be? An understanding of data and how to apply evidence to process improvement —whether with the vendor or healthcare organization— is necessary to stay at the forefront of the industry.

Demand customization. A diverse range of services is a distinct plus in selecting a vendor. However, hospitals also should look for a partner who takes the time to identify an approach that meets the hospital’s specific needs instead of pushing a particular package. 

Align around principles and standards. Whether a vendor is providing a complete revenue cycle operation or serving as more of a business office extension by collecting bad debt or handling Medicaid eligibility, the company should adhere to the same principles and standards that the healthcare organization’s reputation was built on.

Foster effective communication practices. Another factor that’s highly telling in terms of a company’s potential as an effective partner is its eagerness to engage with its customers. Parallon’s most successful relationships are with organizations that are tightly integrated with us, from governance and communication to reporting of metrics. Simply signing a contract and handing off the business bodes less well for a hospital. Ideally, everyone works
together, collaborates well, and focuses on results. As such, the vendor should have tools and mechanisms in place to ensure ongoing communication and accountability.  

Sometimes organizations have a strong ROI to outsource, but the arrangement doesn’t perform as desired in practice. How can hospital finance executives best position their outsource revenue cycle management relationships for success?

Cultural fit is imperative. Hospital finance executives should look for someone who shares their values and has a strong reputation in the industry. Also, the vendor should have a patients-first approach to delivering services. Because that’s the reason for all of this: caring for patients.

I think it’s also important to see how companies serve current customers: What do their core values look like in action? Do they pride themselves on delivering top-quality service? Do they have sound quality controls in place in all areas of their business? Do they treat people with respect and appreciate the hospital’s mission?

These types of considerations are as important, or even more so, than the financial equation in selecting a partner, especially with a large-scale outsourcing agreement.

As hospital executives examine ways to improve their revenue cycle management, particularly with use of an external partner, are there any resources you can recommend?

Parallon offers a number of insights through white papers and case studies covering a variety of healthcare business topics. 

Parallon

HFMA is the nation’s leading membership organization for more than 40,000 healthcare financial management professionals. Business Profiles are funded through advertising with leading solution providers. Learn more.

Content for this Business Profile is supplied by Parallon Revenue Cycle Services. This published piece is provided for advertisement purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions of those profiled are those of the individual and not those of HFMA. References to commercial manufacturers, vendors, products, or services that appear do not constitute endorsement by HFMA.

 

Publication Date: Monday, September 01, 2014