What revenue leakage is, why it’s a problem and how to fix it — 5 insights

Hospitals lose tens of billions of dollars each year due to revenue leakage. This is a huge problem that hospitals often fail to act upon. But real-time insights from PointClickCare can help healthcare organizations decrease revenue leakage while improving patient outcomes.

During a recent podcast from Becker’s Healthcare, Anthony Laflen, Senior Director, Acute and Payer Industry Market Leader at PointClickCare, discussed what revenue leakage is for hospitals, explained why it occurs, shared data on the magnitude of the problem and described what hospitals can do to decrease their revenue leakage.

Here are five insights from the podcast:

1. Revenue leakage is a missed opportunity for hospitals. Mr. Laflen explained that “revenue leakage means that a missed opportunity has occurred for a hospital to capture revenue.” A prime example of revenue leakage occurs when a hospital discharges a patient to a post-acute setting. If that patient needs to be rehospitalized and the post-acute partner does not refer the patient back to the original hospital, revenue leakage can occur. The discharging hospital might receive a readmission penalty but would miss out on the opportunity to capture revenue on the second admission.

2. Revenue leakage can have an enormous financial impact on hospitals. Hospital readmissions are fairly common, especially for Medicare patients. Citing data from the Agency for Healthcare Research and Quality, Mr. Laflen said that over $41 billion is spent annually to treat patients who are readmitted within 30 days of discharge.

However, data collected by PointClickCare indicates that only one in three patients who are readmitted returns to the same hospital. “So, two times out of three — when a rehospitalized patient goes to a different hospital — the original hospital is missing an opportunity [for revenue],” Mr. Laflen said. “When you think about this playing out time and time again, this can become a game changer with major financial impact . . . if you think about two-thirds of that $41 billion, that is a number that is impacting hospitals on a national basis.”

3. Readmission to a different hospital can also have a significant impact on patient outcomes. “Not only are these missed revenue opportunities, but it does a disservice to the patient,” Mr. Laflen said. “Leaving one hospital and being readmitted to a different hospital within 30 days can be devastating for a patient.”

When a patient returns to a different hospital, there will be a different team providing treatment, who will likely not have the historical context. The new hospital also may not have access to the patient’s medical information, access to progress notes from the patient’s skilled nursing facility or access to home healthcare information. The new team may lack medication lists, information about current orders and more. “A massive amount of chart chasing happens,” Mr. Laflen said. “And all of this ambiguity can lead to longer treatment times, expensive repetitive treatment and frankly, poor outcomes.”

4. The keys to preventing revenue leakage are accountability and transparency. A well-run hospital system will strive to keep a patient within their organization. They understand the value and benefits of continuity of care and having the same data and records when retreating a patient. They know this creates a smoother environment and results in better outcomes for patients.

To minimize revenue leakage and to maximize continuity of care, Mr. Laflen stressed that in well-run networks, the goal of care continuity is frequently communicated and is expected of post-acute partners that are part of these networks. “It becomes a metric they constantly look at,” he said.

Similarly, when a patient is discharged from the hospital to their home, the importance of the patient returning to the same hospital is communicated to and emphasized with the patient’s family. “When you look at how revenue leakage can be prevented,” Mr. Laflen said, “it really comes down to communicating expectations and holding partners in the network accountable for making sure the patient stays in the network.”

5. PointClickCare helps hospitals solve their revenue leakage problem. One of the keys to preventing revenue leakage is being able to track patients throughout their care journey. Through various acquisitions, PointClickCare is now the largest combined post-acute and acute care network in North America. Mr. Laflen explained that PointClickCare’s resources “allow far more breadth of coverage that can track a patient anywhere in the ecosystem.” This capability helps connect the dots and decrease revenue leakage.

In addition, by pulling together patient data from multiple EHRs and other sources — from both the inpatient and skilled nursing facility setting — PointClickCare can eliminate many transcription errors and decrease administrative time spent inputting patient data. “When you connect the dots through these acquisitions and these data interfaces, we drive that two-hour data input time down to about 20 minutes and we remove virtually all of the transcription errors that are happening,” Mr. Laflen said.

Mr. Laflen concluded by saying, “We have solutions in place that allow us to mitigate the issues related to revenue leakage and to patients not staying in the same ecosystem.”

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