Why is Your Revenue Cycle More Important Post-Pandemic?
By Tessa Tinley,
Credit Management Company
No crystal ball has enough power to make predictions for 2021 since the pandemic is still surging in parts of the world. As we slowly return to some sense of normalcy, however, you might be wondering about the outlook for your organization’s revenue this year.
Will this year be better than the last?
Here we’ll review a report showing the financial implications COVID-19 might have for health organizations in 2021. We’ll also provide some strategies you might want to use to improve your revenue cycle.
How quickly healthcare organizations see a healthy bottom line depends on several things.
- Recovery of hospital volumes: The degree and pace at which inpatient, outpatient, and emergency department volumes return.
- COVID-19 vaccine progress: The availability of vaccines, the speed of distribution, and the prioritization of different populations for vaccination.
- A decline in COVID-19 cases: The degree and pace at which COVID-19 cases decline, based on public use of social distancing and achievement of herd immunity.
This report provided optimistic and pessimistic scenarios to estimate the amount of revenue that hospitals and health systems could expect to lose in 2021.
The Optimistic Scenario
This assumes that hospitals experience a consistent, complete recovery of patient volumes, vaccine distribution and administration go smoothly, and the country sustains a continued ramp-down of COVID-cases. If that happens, hospitals and health systems could face a $53 billion total revenue loss in 2021.
The Pessimistic Scenario
This assumes that hospitals and health systems see a slow, partial recovery of patient volumes, vaccine rollouts are delayed with continued logistical challenges and the country experiences continued cyclical COVID-19 surges. If this happens, hospitals and health systems could face a $122 billion total revenue loss in 2021.
You read that correctly, both the optimistic and pessimistic scenarios project revenue losses. An article in Health Affairs summed it up this way, “We expect suppressed spending to continue at least into 2021 until a significant portion of the US population is vaccinated.”
Faced with increased spending on staff and equipment, plus a loss of income from canceled surgeries, many healthcare systems are looking to streamline their billing and collection process. After all, this is not the time to have a lot of aging claims.
Improving Revenue Cycle Management
There are numerous ways to improve your organization’s revenue cycle. First, start with clear communications with your patients. If they understand their bills, they are more likely to pay promptly. Next, stay current with the constant regulatory changes. For example, does your billing staff understand the new telehealth billing guidelines?
Often, healthcare organizations realize outsourcing their revenue cycle management will provide the best outcome. If that’s the case for you, ask yourself these three questions before partnering with a revenue cycle vendor.
1. Do They Have Healthcare Experience?
Healthcare is a unique industry with a specific language and government regulations. Ask about your potential partner’s clients to determine the full extent of their healthcare experience. Next, ask about their process. Successful outsourcing arrangements depend on constant communication. Therefore, make sure there is a formal communication strategy to keep you in the loop.
2. Can They help at the Front of The Revenue Cycle?
When your organization has proper procedures in place from the beginning, the rate of patients paying on time accelerates – this means starting the conversation with the patient as early as possible. Look for a company that offers a billing services team to create patient-friendly statements. If patients receive bills that explain the charges in easy-to-understand language, they are more likely to pay medical bills more quickly without tying up the billing office with phone calls.
3. Can They help at the Front of The Revenue Cycle?
Regardless of whether you hire a company to assist with your early out or your bad debt, your reputation is on the line. Patients will form an impression of your organization based on the way they are treated.
Talking to patients about payment issues requires a friendly and empathetic tone of voice. Plus, by using easy-to-understand language, free from medical billing jargon, you’ll avoid patient misunderstandings. You have two goals: receiving payment for current services and maintaining that patient for the future. Make sure your partner will assist you with both.
As is the case with all business partners, your revenue cycle vendor can make or break your financial success. As they will be acting as an extension of your business office and representing your name, it’s important that you trust your partner to act in your best interest.