Becker's Speaker Series: 4 questions with Northern Arizona Healthcare Chief Revenue Officer, Ryan O'Hara

Ryan O'Hara serves as Chief Revenue Officer for Northern Arizona Healthcare.

On Friday, September 22, Mr. O'Hara will speak on a panel at Becker's Hospital Review 3rd Annual Health IT + Revenue Cycle Conference. As part of an ongoing series, Becker's is talking to healthcare leaders who plan to speak at the conference, which will take place September 21 through September 23 in Chicago.

To learn more about the conference and Mr. O'Hara's session, click here.

Question: Please share the state of revenue cycle management at your organization. What is your payer mix? What about your revenue cycle is working well, what needs improvement and what do you find yourself spending more time on?OHara Ryan Headshot

Ryan O'Hara: The state of revenue cycle is probably best described as "maturing." In January 2016, we exited a 16-year outsourced model on the acute side of our operations. This arrangement saved us $3.5 million in cost in the first year, which is good. But, the nature of a 16-year outsourced arrangement has left us highly unoptimized in terms of how we service our customers from initial throughput to bill adjudication. So our areas of improvement are seemingly never-ending. We have more than 60 priorities on a five-year road map that we are in year two of. That list gets added to at about the same speed it gets subtracted from. Basic things like patient estimation, contract modeling, patient-centric payment options and root cause denials mitigation work were never established. So, we've taken the approach of trying to become a highly service-oriented operation, focusing on what our customers want. That is the high priority focus now and pretty much in perpetuity.

Payer mix is very different across our campuses and clinics. But for the most part, we are about 45 percent commercial and 35 percent Medicare in the Flagstaff, Ariz., market. Medicaid makes up about 13 percent of the remainder. In the Cottonwood/Sedona (Ariz.) market, it is about 50 percent Medicare, 10 percent Medicaid and about 38 percent commercial. (As a disclaimer, this is all net — I hate dealing in gross.)

Q: How have alternative payment models affected your line of work? Can you share three specific steps, if any, has your organization taken to adapt to bundles and ACO payments?

RO: They haven't ... yet. We are fortunate from a competitive standpoint that we actually have leverage in the insurance negotiation space. As a sole community provider with very little competition, we still have the primary percentage of charge contracts with our commercial insurance providers. That said, we know that we can't — nor do we necessarily want to — stay insulated forever. We have established an accountable care organization, PathfinderHealth, to try to leverage shared savings and population health efforts, but it is a slow, dip our toes process. We are fortunate that we can take our time.

Q: Percent-wise, roughly how much of your revenue cycle is automated? Do you plan to maintain that percent or increase in the next one to two years? What effects have you seen from automation, good or bad?

RO: In the CBO, we are closer than anywhere else. My goal is to make the back cycle as automated as possible so claims go out, and money comes in with very little human intervention. People are left to aid in customer service, financial counseling and working denials or underpayments. Where I want to invest in people is pre-service and time of service advocacy. It needs to be living, caring, empathetic people that want to help educate, counsel and advocate for our customers struggling with their almost universally unwanted healthcare expenses or needs. The key is proactive work.

Q: What is one investment you've made in RCM that has surprised you in terms of ROI? How so?

RO: The ROI on eliminating our third party exceeded my expectations. My stretch goal was $2.5 million in year one, and we beat that by a million. The obvious part of the pre-decision analysis was that we were paying a premium for labor. In short, we were charged more than the actual cost. Additionally, it was clear that the service level agreements hadn't been updated in seven years, so we were paying for average performance at best. The excess came from the fact that the arrangement never coerced our operational processes to try to leverage technology at any point. So as we were able to leverage improved workflow and technology, it allowed us to quickly eliminate labor cost to the tune of about 30 people, while delivering better performance.

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