Efficiency, Meet Margin

"I don't think scoring is a measure of one's ability to pay. I would rather look at the information in our system as a barometer on whether someone can or can't pay." What he means is that if a mother is bringing her son into his ER for a 12th visit "and the previous 11 have resulted in bad debt, what do you think the 12th is going to be?" he asks. "How do we take that information and bring it to the forefront so when people come to the ED or registration, I can take action at that point?"

On the labor front, Mier has invested in more training for his people. Many staffers don't feel comfortable asking for money from patients, but it has to be done, he says. "We have to overturn every available source of funding for those patients," he says. "Whether that's right or wrong, we can't continue to do the good things we do unless we maximize collections. Reimbursement is decreasing from all payers, so the key is turning over and liquefying those accounts more quickly."

One step back, two steps forward
Reorganization of the revenue cycle has its costs, too. Tracy Berry has been working on a major reorganization of the revenue cycle at Denver's Centura Health since she arrived almost two years ago. The senior vice president of revenue management at the 12-hospital system says cutting-edge thinking in revenue cycle has shifted dramatically since the early 1990s.

"Then, the focus was all on cost reduction. You can cut costs all day long, but the more important factor is you have to make sure you get the revenue that's due to you, and you can't cost-cut your way there. We're much more focused on the revenue side now."

Berry says Centura is ensuring it has the right people in various areas of the revenue cycle by creating career ladders and salary comparisons to the market to create continuity and motivation for skilled staff members. "This is important. Are my folks going to make more money than the bedside nurse? No, but I have felt very supported in terms of tools and resources to make things happen."

One of the ways to make things happen, as with Omaha Children's Mier, is through integration of the clinical patient information system with patient accounting. Just more than a year ago, Centura began a phased conversion of its hospitals to a new clinical information system from Meditech. The effort has helped Centura standardize its chargemaster, patient access, and registration functions, and centralize its insurance authorization and verification in the main revenue management office instead of at individual hospitals. Also now centralized is a vendor management tool from software vendor Connance that helps Berry coordinate activity among her collection agencies.

The multiple conversions in such a short amount of time, however, "wreaked havoc with the revenue cycle," she says. Centura saw real erosion in its discharged-not-final-billed metrics as well as accounts receivable days. "What we've been through is a wonderful technology upgrade, but we had to get back to basics with our back-end shop."

She's focused her team on shoring up patient-access functions and has purchased, but not yet installed, what she sees as one of the final pieces of the puzzle: a patient price estimator. With percent-of-charges contracting creating a variety of different patient payment responsibilities, it's become much trickier, especially on the front end, to find out what someone really owes your hospital. "We've been focused on training our patient access staff on how to ask for money," she says. "While it seems silly, it's hard. No one wants to ask for money in a sick-person setting."