Revenue Cycle

revenue cycleWith the increased focus on patient satisfaction that comes from the value-based healthcare model, hospitals and health systems have had to strengthen their pursuit of quality and health outcomes.  One area that is often overlooked, but has an equal impact on patient satisfaction, is the revenue cycle.

Patients have become “consumers,” leading health care to become more of a “retail” experience.  Branding, loyalty, and recommendations to friends and family are concepts gaining importance in health care.  Hospitals tend to concentrate their satisfaction efforts on the clinical encounters that take place within their walls, but the revenue cycle is usually both the first and last contact the patient will have with the organization.

According to Scott Morgan, chief strategy officer for Avadyne Health, the revenue cycle is particularly poignant for patients because it ties into both health and money, which are two highly stressful areas; for this reason, negative experiences with the revenue cycle will tend to remain with patients when they are evaluating the hospital.  In fact, Morgan found that patients consider money to be their number four fear, while diagnosis and prognosis was number nine, with money moving to the top spot upon discharge.  The Affordable Care Act has resulted in many patients being personally responsible for greater payments for their healthcare services; by 2020, it is estimated that patients will be responsible for paying 50% of the healthcare dollar.  The trend is moving away from employer-sponsored health plans toward exchange health plans, which have significantly higher deductibles.

As a result of these changes, the new revenue cycle needs to be one that is patient-centered.  Much of the current focus in revenue cycle is on the technology that can make it more efficient and effective; however, this technology will have less impact on patient perception than human interactions will.  Training the staff that interacts with patients is crucial – they must not only be polite and professional, but really demonstrate empathy and strong listening skills.  Along with making patients feel that they are being heard, these skills will allow the staff to pick up on information shared by the patients that can help with their care.  When patients feel that their concerns are not being ignored, they are more likely to not ignore the hospital’s requests for payment.

In addition to staff training, the revenue cycle can be made more customer-friendly by employing the retail model in billing.  Unlike other services, bills for health care come to patients significantly after the service is provided and often in the form of an Explanation of Benefits (EOB) from the insurance company that is hard to understand.  Providing patients with a clear, easy-to-understand estimate of costs prior to their procedure or upon discharge can help them feel more positive about the financial aspect of their care.

As patients become more selective about their health care and more computer-savvy, they are tapping into the internet as a source for pricing information.   Unfortunately, much of this information is difficult to understand and is not necessarily applicable to a patient’s individual circumstances.  For example, although The Centers for Medicare & Medicaid Services (CMS) publishes average charges and Medicare reimbursement rates for a number of procedures on its website, it uses hospital charge masters, which, according to Sandra Wolfskill, the director of healthcare finance policy and revenue cycle for HFMA, represent “unbargained” prices that very few patients will actually pay.  CMS also does not link quality and pricing data to allow patients to find the right intersection of cost and quality for their needs.

Because third-party information like this could cause more harm than good, an alternative is for each hospital or health system to provide its own price transparency through tools that estimate patients’ out-of-pocket expenses for care.  The Cleveland Clinic website features a link to a “Patient Price Information List” that includes charges for room and board, laboratory, operating room, and a variety of other services.  Doctors Hospital in Augusta also provides pricing estimates that include an anticipated length of stay for various procedures.  Geisinger Health System in Pennsylvania has an online, real-time tool to estimate costs, with quality and safety information alongside.

Integrating the revenue cycle as health systems grow through mergers and acquisitions can benefit patients, as well, by increasing accuracy and providing a single point of contact.  An integrated patient access system allows patients to make appointments with all of their providers in one consolidated location; integrating the registration process allows patients to provide their information just once (and this can be linked to electronic eligibility verification); integrating financial counseling allows patients to complete charity care applications just once, to be applied to all providers; and billing statements can be integrated to create one itemized document for all services at any site in the system, which is less overwhelming to the patient.  Integration results in fewer errors and more consistency for patients.

A consumer focus means that like clinical staff, revenue cycle staff is incentivized for patient satisfaction, not simply for performing their job (i.e. collecting money).  Ways in which customer service can be demonstrated in revenue cycle include:  providing timely, personalized responses to complaints, and ensuring that the root causes of the complaints are addressed; having financial counselors close to the point of care; offering evening and weekend hours and multilingual staff in billing services; and serving as a single point of contact by making connections with insurance providers, etc. for patients while they are on the line with the billing department.  Increasing the options patients have for making their payments, both the means of paying – in person (point-of-service payment portals), online, by mail, over the phone – and the timeframe – with flexible payment terms – as well as offering incentives for self-pay to compensate for the fact that patients can’t negotiate pricing with hospitals like insurance companies can, will also improve customer service and patient satisfaction.

Collecting from patients is much more costly for an organization than collecting from payers.  In addition, it is important to achieve strong patient satisfaction in the revenue cycle, as statistically, high satisfaction with billing processes results in patients who are twice as likely to return to the hospital, and over 80% of patients who are satisfied with their billing experience are likely to recommend the hospital to their friends.

Contributed by Holly Valovick -QLK