Most important revenue sources for hospitals today: 5 key insights

What a hospital considers to be its most important revenue source can be subject to continual change, however, physicians and clinical staff will always remain a significant revenue driver. 

During the Becker's Hospital Review 5th Annual Health IT + Revenue Cycle event in Chicago on Oct. 10, panelists gathered to discuss important sources of revenue for hospitals today as well as areas of revenue to focus on in the future. Sam Reynolds, manager at Transaction Advisory Services, moderated the panel, which also featured the following participants:

· Billie Jean Mounts, chief revenue officer at Bon Secours Mercy Health in Cincinnati.
· Lois Greene, chief revenue officer, Prospect East Orange (N.J.) General.
· Noam Davidoff, program director of operations at Northwestern Medicine in Chicago.
· John H. Schweitzer, president and chief business development officer at Echelon Medical Capital.

Here are five takeaways from the session:

1. Recruiting, hiring and retaining physicians and clinical staff is one of the most important sources of revenue for a hospital because these individuals define the hospital's overall brand as the face of the organization. Hiring clinical staff that align with the hospital's brand largely supports revenue.

2. Another important revenue source for hospitals is to eliminate revenue leakage, such as avoiding front-end preventable denials. While this happens in almost every healthcare organization, doubling down on revenue leakage will help contribute to overall financial savings.

3. Revenue sources like endowments and donations can also play a key role for healthcare organizations, especially those that continue to invest in research aimed toward improving patient care. This revenue source will continue to propel across the healthcare industry.

4. Most hospitals likely use a third-party vendor for revenue cycle management, however, it is important to determine what cultural value as opposed to return on investment the vendor will bring to the organization before forming a partnership. There are lots of partners who want to assist with billing and communications, among other functions, but the hospital needs to recognize that a partnering vendor will interact with patients and end users, so the company should reflect the organization's culture and values.

5. One area of focus for the future of the hospital revenue cycle is to determine how to enter into value-based and population health payment agreements with a predictable revenue model to ensure what the projected overall revenue will be.

More articles on healthcare finance:
Analysis: New York's surprise-billing solution is causing healthcare costs to climb
Missouri hospital's finances dragged by unpaid patient debt
Oncology alliance urges CMS to delay proposed radiation payment model

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