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Hospitals Get Financially Smart in a Tight Economy

Dom Nicastro, for HealthLeaders Media, June 8, 2009

Hospitals can't escape layoffs these days, and they're not exactly adding jobs anytime soon.

Bureau of Labor Statistics data released Friday say hospitals added only 300 payroll jobs across the entire nation, compared to 16,800 jobs in May 2008, and 8,700 jobs in May 2007.

So what are hospitals doing about it, especially on the front end where accurate registrations and upfront collections can mean the difference between a denial and a full return on a patient bill?

They are getting smarter, more technologically savvy, and analyzing their payer mix and what each entity requires.

Tanja Twist, director of Patient Financial Services at Methodist Hospital in Arcadia, CA, leads a team that is doing just this. She says her department has not made any major staffing adjustments.

Twist says cutting staff members in the business office may be counterproductive. A bill is a bill. It can't sit on a desk. It may mean shifting that cost savings to pay a vendor to pick up the slack.

"The accounts have to get worked – we either do it internally or we outsource it," Twist says. "In the end, we still have to get the job done. What we are trying to do is work smarter – anticipate what each payer requires."

Over the past year, Methodist went live with an EMR system – piloting it in the admitting and the business office. Twist says it allowed her to better utilize the file clerk FTEs, cross training them in scanning and document control. She was even able to transition one FTE into a much-needed position in cash collections; Methodist's self-pay population has increased significantly.

"This was a big change for my front- and back-end staff," Twist says. "We had to learn to 'let go of the paper,' which was not an easy thing to do. In admitting this meant scanning registration documents instead of copying them, and staff no longer needed to create a patient financial folder. This also required significant changes to the workflow."

Methodist has also made improvements with:

  • Patient flow in ED. It implemented a clinical documentation system, which ED staff members use to help with patient flow in and out of the ED.
  • Express unit. Methodist started 2008 by fine-tuning its pre-admission process and opened up an 'express registration unit,' which guarantees that pre-registered guests are processed in less than five minutes.
  • New-hire program. If it does need to rehire staff, Methodist began a "very aggressive" new-hire training program and staff re-education course, hiring a staff education coordinator to facilitate all training. It put leads in place to facilitate registration audits and found a significant decrease in registration errors and an increase in upfront collections since implementing these initiatives.

"We are just trying to optimize our time, changing the way we tackle our team mix to adjust to the changes in economy – both from a self-pay perspective and a commercial payer follow-up perspective," Twist says. "The payers seem to be hanging onto their money, and the patients are increasingly less able to pay upfront."

Editor's note: This is the first in a four-part series of stories on HealthLeaders Media talking to revenue cycle managers about coping in a tough economy.


Dom Nicastro is a contributing writer. He edits the Medical Records Briefings newsletter and manages the HIPAA Update Blog.

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