Using a 3-dimensional approach to create positive change in your patient revenue cycle
Former Netscape president and CEO Jim Barksdale once said, “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”
Although we might chuckle, all businesses — including hospitals and health systems — should depend on data to drive decisions. It’s not uncommon, for instance, for healthcare organizations to tap into data from EDI 835 and EDI 837 transactions to improve claims performance with public and private payers. Now it’s time to use the concept of “3D” — data-driven decisions — to reinvent the patient side of the revenue cycle.
Data-Driven Patient Revenue Considerations
As patients shoulder more of the financial burden for their care, hospitals are spending more time, money and resources on manual patient payment processes that could be automated. Knowing where to start lies in the data. The right patient payment data can help health systems find the most efficient, cost-effective ways to manage the patient revenue cycle — and foster greater patient satisfaction.
Here are four steps to achieve data-driven patient revenue cycle decisions in your organizations:
1. Encourage a mindset shift.
Patient payment processes have long taken a backseat to payer-driven revenue cycle workflows. This has historically been the case given the weight of insurance revenue. However, as patient payment responsibility continues to soar, health systems must look at data in a whole new way to create meaningful change.
Hospitals already apply data from payers to optimize revenue cycle workflows; why not do the same with patient payment data? Obtaining such information no longer requires labor-intensive research through various accounts and ledgers. Comprehensive patient payment platforms can reconcile patient dollars and data together, giving revenue cycle leaders a clear view into how well initiatives are working and what they can do to continually improve.
2. Select key performance indicators (KPIs) to measure.
Another quote often attributed to Jim Barksdale is, “You cannot manage that which you cannot measure.” Whether he actually originated the phrase may be open to debate, but the importance of the sentiment is clear. The second key step to a data-driven patient revenue cycle is to determine which KPIs to track.
Do you need to know how many payments were patient-initiated vs. provider-initiated, for example? Would it be beneficial to know the number of compound payments taken at point of service, such as co-pays plus prepayments or past-due amounts? How about self-service payment adoption? Do you know what types of communications drive payment behavior? Start quantifying those KPIs that will show whether your patient payment strategies are working — or not. It is important to make KPIs “S.M.A.R.T.” – that is Specific, Measurable, Attainable, Realistic, and Time-based. This will help to measure success over time and provide guidance when evolving these strategies.
3. Apply data to improve staff efficiency.
The way most hospitals work today, patient payment revenue shows up in the bank account as one bulk deposit. For example, let’s say $25,000 comes in. Does that represent 25 patient payments of $1,000 each, or 2,500 patient payments of $10 each? Lacking that data, health systems miss vital insight into how to design the most effective patient payment plans and financial policies. It also causes posting nightmares. Just ask your posting team.
Conversely, organizations can strengthen the patient revenue cycle by regularly leveraging dashboards and other tools that reveal measurable data—such as payments taken at the point-of-service by user, or how many patient calls the billing department converts to payments. Doing so can help hospitals decide how best to approach tactics like payment plans, communications, patient access scripting, and back office processes.
4. Ask “why?”
Just as physicians use blood pressure data to determine whether one medication works better than another, hospital executives can use data to determine which patient payment processes and tools work best. It’s not enough to simply measure KPIs; healthcare organizations must go one step farther and answer critical “why” questions. For instance: “Why are our A/R days what they are? Are we making it easy for patients to pay? Do patients understand the charges? What can we put in place to test and measure improvement?” By tracking data and dollars together, organizations gain better understanding of patient payment cause-and-effect.
Hospitals and health systems now have the ability to tell not just that a given patient paid five days late. They can now dive deep enough to discover “why” they still receive a large percentage of patient payments from checks, and have lower adoption of self-service payment methods. Knowing this, they can proactively offer payment options that patients prefer and employ.
Satisfy Patients and the Bottom Line
No matter how good the clinical care, the financial aspect of care is typically the patient’s last touchpoint with a hospital or provider, and often the one that patients remember the most. That is why it is so essential to take a data-driven decision making approach to improving the patient revenue cycle. Leveraging this data can directly improve patient revenue cycle strategies and help hospitals and health systems provide positive financial experiences.
By linking data to the dollars, hospitals and health systems can make financial decisions with significant positive impact — both for themselves and for the patients they serve.