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Imagine the following scenarios:
All of these incidents represent risks to a healthcare organization. Yet, each also represents a potential gain for somebody (e.g., more money, greater prestige, cost reduction, risk transfer). Common risks that arise in the health finance functions tend to fall into the following categories:
All of these risks combined are part of an enterprise risk management (ERM) system, which should be established and fully implemented in your organization and in the health finance function itself. Determining the strategic, operational, and tactical risks to a healthcare organization and then formulating approaches to prevent, mitigate, or manage the risks is the essence of a well-functioning ERM system.
Risks are generally categorized into external (e.g., regulatory, technological advances) and internal (e.g., decision making, risk aversion). By applying principles of ethical decision making, healthcare finance leaders will be better equipped to not only make ethical decisions but manage risk.
So how can a healthcare financial leader manage risks? One essential method is to consider the underlying conscious, rational motivations of the decision makers before a decision is made. This method, based on the writing of Immanuel Kant, helps healthcare organizations make more ethical and effective decisions.
Before describing this ethical decision-making framework, a brief introduction to Immanuel Kant is warranted. Kant, a German philosopher who lived from 1724 to 1804, believed that humans are rational and possess reason. Accordingly, humans exercise freedom in making choices. When healthcare finance leaders make day-to-day decisions, they use rationality. Reason differentiates humans from other animals.
Kant also believed that, when choosing a course of action, humans have a duty to demonstrate “respect for persons.” According to Kant, we cannot focus on the consequences of our decisions or actions because they cannot be controlled. However, our intentions are fully under our control, he says.
Regarding intentions, Kant described two major types of duties: the hypothetical imperative and the categorical imperative.
Consider the scenario at the beginning of this article in which the manager purposefully chooses to withhold information to enhance her political standing in the organization. This behavior illustrates the hypothetical imperative. The manager reasons that if I withhold information, then my political clout will increase.
In contrast, the categorical imperative is a universal principle that applies to nearly every situation. An example in society is the golden rule. For example, when senior leaders seemingly choose to place their own financial welfare above their organizations’ welfare, the universal principle of prioritizing the organization over any single individual within the organization is clearly violated.
Decision trees help people make important decisions with self-reflection, deliberation, and intentionality. In a 2005 paper, Sharon A. Bowen shared a model that sums up Kant’s recommended approach to ethical decision making (Bowen, S.A., “
A Practical Model for Ethicial Decision Making in Issues Management and Public Relations,” Journal of Public Relations Research, 2005, vol. 17, no. 3, pp. 191-216).
In this model, when facing a decision, you first ask yourself these three questions:
If your response to all of these questions is “yes,” then ask yourself the following three questions:
If your response to any of the initial three questions is “no,” involve others in the decision. Ask the same three follow-up questions, but frame them as collective questions. Engaging others in the decision helps ensure that rationality drives the decision, rather than your personal self interests.
These three questions embrace what Kant described as the categorical imperative. In short, if the decision is good enough for others, it should be good enough for you.
In addition to these questions, individuals and groups should consider the three questions presented in Bowen’s Ethical Consideration Triangle as shown in the exhibit below.
Ethical Consideration Triangle
By asking these three questions, you will experience at least two benefits: First, you will slow yourself down by being more deliberate. Second, you will frame financial and business decisions from a broader perspective than just focusing on the bottom line alone.
Regardless of the answers to these questions, the results of your ethical decision-making process must be communicated. This task also should be done in an ethically sensitive fashion. Specifically, all stakeholders must be provided with the information behind a particular decision, how the decision was made, and the intended outcomes of the decision.
Limiting your ethical decision making to the outcomes of your decision or actions alone is not enough. Similarly, restricting your ethical decision making to that which is legal is not enough. Bowen remarks: “…Kant required that people be treated always as an end in themselves and never as a means to an end.”
Returning to the example at the beginning of this article, consider the motivation to expand the ambulatory footprint. Are healthcare finance leaders seeking to extend the ambulatory footprint for certain patients for financial reasons alone, or also to enhance the health and well-being of those patients? Would they shift the setting for all patients regardless of insurance status and other characteristics?
A healthcare organization needs to show a profit, but are some patients a means to an economic end in this scenario? If so, Kant would regard this as unethical decision making.
However, utilitarians may argue that this decision is ethical. The utilitarian approach is best captured by the following phrase: the greatest good for the greatest number. Steps in this approach are to conduct a cost/benefit analysis of the decision to allocate resources and to evaluate the outcomes or results of a decision (the ends) more so than the means.
Before you choose one type of ethical decision-making model, take a look at your vision, mission, and values. Then ask the question: “How do our vision, mission, and values guide us in which type of ethical decision-making model to select?” By asking yourself and your leadership team this question, you are engaging in the practice of ethical sensitivity.
Effective leaders engage in self-reflection and deliberation prior to making decisions that impact the organization, patients, community members, and other key stakeholders. If your organization is not making decisions well, perhaps this framework should be adopted. With practice, you will find that not only are you being more attentive to the ethicality of your decision-making process, but the quality of your decisions will improve.
William Marty Martin is an associate professor and director, Health Sector Management & Organizational Diversity MBA concentrations, DePaul University, Chicago, and is a member of HFMA’s First Illinois Chapter.
Publication Date: Tuesday, July 07, 2015
In this Business Profile, Shawn Yates, director of healthcare product management at Ontario Systems, discusses the growing challenge of managing self-pay accounts and provides insight on how providers can successfully collect patient payments.
In this business profile, Cathy Smith, leader of the revenue transformation consulting practice at The Claro Group discusses how the organization helps hospitals and medical groups reimagine their revenue cycle.
In this business profile, Deloitte & Touche LLP executives Anne Phelps, principal and U.S. healthcare regulatory leader, and Daniel Esquibel, senior manager, explain ways health systems, health plans, and physician practices can prepare for MACRA.
In this Business Profile, Bruce Haupt, president and CEO of ClearBalance, discusses how a patient loan program can increase patient collections, reduce bad debt, and speed cash flow.
In this Business Profile, Jerry Bruno, principal with Deloitte Consulting LLP, discusses the importance of choosing revenue cycle solutions that help an organization meet the challenges of a quickly evolving healthcare environment.
In this business profile, Lane Jackson, a partner in the Grant Thornton LLP Health Care Advisory Services practice, with extensive experience in overseeing system implementations and revenue cycle reorganizations, discusses best practices for elevating revenue cycle performance during an EMR implementation. Grant Thornton LLP is a sponsor of the Large System Controllers Council Affinity Group.
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
HFMA offers online, email, and print opportunities to help you recruit the most talented healthcare finance professionals. Place your classified ads today.
Drive down costs while improving quality in a reform environment.
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