How Penn Medicine increased RCM productivity by 28% — 4 takeaways

The health care industry continues to face enormous financial challenges. Hospital performance in 2021 remained well below pre-pandemic levels due to the omicron variant and high expenses, according to the January National Hospital Flash Report by health care consulting firm Kaufman Hall. From December 2019 to December 2021, hospitals experienced a 14.7% median decline in operating margin.

Additionally, the cost to collect each dollar owed is rising, and health systems have significant shortages not just among clinical workers but also among the revenue cycle workforce. Philadelphia-based Penn Medicine has successfully navigated this turbulence. The organization is hitting its performance goals while seeing record productivity and low employee turnover.

During a January webinar hosted by Becker's Hospital Review and sponsored by Optum, Morgan Haines, senior director of Optum® Advisory Services, and Tom McCormick, vice president of patient accounting at Penn Medicine, discussed industry trends and shared lessons from Penn Medicine’s RCM optimization journey.

Four takeaways:

  1. The shift to a hybrid workforce yields challenges and benefits for RCM teams. Haines said the transition to a virtual and hybrid workforce model is “the new normal” for RCM organizations. Optum is hearing from clients that cost-saving benefits include reducing space needs and reallocating costs. Employees report improved wellness and better work-life balance. Organizations are also able to expand their access to talent by hiring outside their traditional geographic area. Challenges include keeping employees engaged, promoting collaboration, maintaining culture, monitoring performance and productivity, and dealing with technology fatigue.

  2.  Amid a challenging landscape, Penn Medicine’s RCM team increased productivity 28%. Penn Medicine’s revenue cycle strategy is focused on surpassing cash goals and reducing collection costs while enhancing the patient experience. Key parts of the strategy include managing productivity and accountability, leveraging service partnerships, enabling technology and automation, and promoting a flexible workforce model.

    Based on this strategy, Penn Medicine’s RCM team was able to increase unique account activities completed by 28%, achieving its best-ever productivity and performance. McCormick attributed this improved performance to staff being more focused on work when working from home and not encountering typical workplace distractions. As a result, Penn has made the virtual workforce model permanent.

  3. Penn Medicine’s unique RCM workforce incentive program creates a culture of accountability and engagement. For over 15 years, Penn Medicine has had a unique incentive program just for revenue cycle employees. McCormick explained that “this is a unique program where revenue cycle employees can earn a payment on the basis of cash collections.” This program “keeps employees engaged,” Mr. McCormick said. This program has helped the division never miss a target in 15 years.

    In addition to encouraging employees to hit performance goals, these incentives have resulted in outstanding employee retention. The turnover rate in the revenue cycle team is about 4% compared to a systemwide turnover rate of around 10%.

  4. Partnerships are integral to Penn Medicine’s RCM success. Penn Medicine has been a strong proponent of using strategic partnerships going back to 2000. For 20-plus years, the organization has identified key processes that are done better externally than internally. Other lessons learned include thoroughly vetting potential partners, leveraging partnerships to achieve greater flexibility, having a data-driven methodology to select the work partners should manage and developing a supportive management team that can lead cultural adoption with partners.

“There’s no single solution to fixing [RCM] workforce challenges,” Ms. Haines said. As Penn Medicine’s experience shows, a virtual workforce model can boost productivity, and a strong employee incentive program can drive performance and minimize turnover. Ms. Haines encouraged revenue cycle leaders to create a virtual workforce playbook, develop methods for employee engagement, build performance-based incentives and leverage automation.

 

To register for upcoming webinars, click here.

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars