The future of the healthcare revenue cycle: leveraging technology to balance the focus on cost and yield

Leading health systems are building financial success through digital and cultural transformation.

During the Becker's Hospital Review 7th Annual Health IT + Digital Health + RCM Annual Meeting, a roundtable, sponsored by Huron and led by Isaac Segal, senior director at Huron, focused on lessons learned from organizations undertaking digital and cultural transformations.

Five key takeaways were:

1. Revenue cycle success requires a more balanced approach. Historically organizations have emphasized cost to collect, which Mr. Segal termed as "an essential but insufficient measure of total revenue cycle performance." He said the future of healthcare revenue will demand a more balanced approach in which cost and yield move in sync and are improved through digital and cultural transformation.
   
   
2. As organizations undertake transformation, leaders should note how deeply healthcare is plagued by outdated technologies. While the world is filled with awe-inspiring technologies, healthcare still uses many antiquated technologies, like pagers and faxes. An obvious question, Mr. Segal asked, is, "How can revenue cycle leaders leverage technical innovation to help bring about financial success while improving the patient experience?"
   
   
3. Transformation requires providers to find approaches to simultaneously address both cost and yield. Organizations that successfully transform their revenue cycle undertake the steps below in the following sequence:
   
   

• Upskill the workforce. Traditionally a successful revenue cycle leader was proficient at billing and collections. Going forward, key skills include data-driven problem solving.
  
  

• Customer-focused vision. Transformation means leveraging technology and digital platforms to drive a seamless customer experience.
  
  

• Change the model. Move away from functional excellence to outcomes-focused excellence that includes patient experience, maximizing reimbursement and clinical outcomes.
  
  

• Leverage data insights. Invest in action-oriented insights to identify cost and revenue improvement opportunities.
  
  

• Automation. After the other four essentials, leverage automation to streamline processes.
  
  

4. There are three core tenets of a successful technology transformation. These tenets are:
   
   

• A culture of transformation. The culture provides the foundation for transformation. It emphasizes alignment, continuous improvement and personal accountability.
  
  

• Program execution. Transformational organizations approach technology and automation with a program mentality, supported by a strong governance structure, change management methodology and a culture of transformation, as opposed to a series of disparate projects.
  
  

• Strategic partnerships. When embarking on a transformational journey, it is important that organizations honestly assess their capabilities to determine strengths and weaknesses. This assessment drives decisions about what to build internally and when to buy/partner. Mr. Segal advised looking for partners who "speak the organization's language, understand their business and can facilitate change management."
  
  

5. There are tangible next steps to begin the transformation journey. These next steps, based on Huron's experience, are:
   
   

• Plan. "Think about what problems you need to solve," Mr. Segal said. One participant commented that too often healthcare organizations proceed to implement technologies without first defining the specific problems they are seeking to solve.
  
  
• Do. Start with a proof of concept. Mr. Segal suggested picking a project with both a high level of and a high likelihood of success. "Make sure your first attempt is successful so when you're done, your staff will be bought into the transformation," he said.
  
  "After identifying and quantifying a problem, we moved to proof of concept," a participant said. "For example, we were going to put in a prior authorization tool that was supposed to save us time. However, the proof of concept didn't work because our market and payers were different. We couldn't get the automation done without significant losses. It was important to try it before making a huge investment."
  
  

• Check. Determine if you can build internally or need to purchase or partner for a solution. One participant summarized the benefits of enlisting an outside consultant, "We need help, and it's a short-term solution," she said. "Without consultants, we're adding to our FTE burden as opposed to alleviating our FTE stress."
  
  
• Act. Identify missing skill sets, build a training plan and look at process optimization.

Transforming the revenue cycle is a complex undertaking that involves both cultural and technological change. By learning lessons and best practices from successful organizations — and by selecting the right partners — it is possible to engineer a successful transformation.