Financial Leadership

Rethinking Revenue Cycle Management

November 8, 2018 9:43 am

Transitions fail when schedules are emphasized over readiness to implement a new process or technology.

As revenues decline and consumerism rises, managing the revenue cycle effectively has become increasingly challenging for today’s healthcare leaders. Here, Joe Polaris, senior vice president of product and technology, and Wesley Arnett, executive vice president of deployment for R1 RCM, discuss options healthcare leaders have in outsourcing revenue cycle functions, the challenges that come with such initiatives, and how a fully managed revenue cycle can better align with an organization’s clinical and financial goals and raise patient satisfaction with their clinical and financial care.

What are some of the typical challenges for health systems when implementing a fully managed revenue cycle operation, similar to your recent partnerships with Intermountain Healthcare in Salt Lake City and Ascension Health in Chicago? What are some strategies to overcome those challenges?

Arnett: The first is being ready organizationally to take the step to a full partnership. It is important that all the representative stakeholders understand what that means. A misconception is that if you’re handing over your revenue cycle to a partner, you’re giving up control. What has to happen early on is to establish an understanding with the key stakeholders of why the organization chose the full partnership model and the guiding principles of the partnership. Within the organization and community, it’s important to know that partnership brings the expectation of greater transparency, greater leverage, and that the partner is an extension of the organization, serving its patients and clinicians.

If the partnership includes transitioning employees, there should be a single, coordinated message between the provider and the partner to all internal and external stakeholders. Our experience is that investing in a dedicated change management and communication team is critical to successfully navigating this transition. This allows the partner, in coordination with the provider organization, to be clear up front about the expectations and what that experience is going to be like at the individual level.

A comprehensive program includes a network of change champions, central repository to access all information, and regular engagement via town halls, newsletters, frequently asked questions, and messages from leaders. Most importantly, thanking the transitioning employees for their service makes a huge difference. For the individuals involved in this process, it can be extremely emotional, and it’s something that we are obligated to help them through.

When it comes to transitioning the operations, a readiness-based approach is imperative. It is critical to understand that these major functions are ingrained within a provider organization with their own nuances and those who work in those functions have a detailed understanding of how work is done. Transitions fail when there is an emphasis to meet a schedule versus knowing you are ready to implement a new process or technology or to move work. The discipline of knowing you’re making progress at the process level against predefined readiness criteria along regular intervals of 120 days, 90 days, and so on from the transition date is the only way you will be able to spot those issues that, while minor, in the grand scheme of things will certainly be disruptive. 

For example, cash posting is often a process that most people think should just work, but it’s incredibly nuanced based upon any particular location and system. What may appear to be small issues can become massive problems to overcome. There has to be discipline, both on the customer and partner side, to be able to say, “We’re not ready. We’re going to have to revisit our plan. And this is how we’re going to mitigate these risks.”

What is key to success with such an extensive change?

Arnett: We’ve learned over the years in our successful and unsuccessful transitions is that investment has to go into supporting and managing these transitions for all to go well. If there’s any concern about employees joining the partner organization, that will stop the process. If there’s any sort of performance implications as we go through the transition, that will stop the process. So, making sure you have the right resourcing to support all aspects of these transitions is really, in our experience, the only way it will enable providers to feel comfortable about making the transition and, even more importantly, be successful as they go through the transition.

Polaris : We often think about this partnership approach as being all about cutting costs or a financial transaction. But, the reality is the right partnership model for revenue cycle should be about enabling a superior patient experience; and delivering results into the health system so that its leaders can focus on providing great care.

What would be a reasonable investment in the required revenue cycle technology for a health system?

Polaris: It’s not uncommon for end-to-end enterprise revenue cycle technology solutions, and that’s technology alone, to require on the order of a $40 million or $50 million annual capital expenditure just to continue to stay ahead of the market on efficiency and patient engagement. Just to create and maintain a leading technology platform requires an investment of that magnitude, let alone the global infrastructure—the human capital and thought leadership—that’s required to execute all the processes of the revenue cycle. Most health systems simply can’t afford to develop an optimized, end-to-end revenue cycle platform of their own.

Are more providers considering outsourcing the full revenue cycle?

Arnett : We’re seeing a lot of interest in the marketplace for an end–to-end solution, because a full partnership provides transparency into the entirety of the revenue cycle process and the areas of opportunity. If a provider has chopped up the revenue cycle management and delivery across multiple vendors, then it becomes hard for the provider to have the required visibility across the continuum to achieve its improvement objectives. In addition, given the relentless payment and cost pressures, the investment resources are often not available to build the required performance management and scaled delivery capability themselves. It becomes difficult and expensive to piecemeal all these parts together, whereas an end-to-end partner offers the scale and accountability to address all these needs in a holistic manner.

Karen Wagner is a freelance healthcare writer based in Forest Lake, Ill.

Interviewed for this article:

Joe Polaris is senior vice president of product and technology, R1 RCM.

Wesley Arnett is executive vice president of deployment, R1 RCM.


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