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This Isn't Your Daddy's Chevy

Max Carter, for HealthLeaders Media, March 25, 2008
The healthcare revenue cycle could be compared in some ways to the automobile.

Technology has dramatically improved the speed and convenience at which both can operate. It used to be that all you needed to repair most car problems was a screwdriver and a pair of pliers. Modern vehicles, by contrast, are driven by so many on-board computers that you can hardly inflate a tire without first paying a mechanic to plug it in and check the diagnostics.

Perhaps the most closely aligned similarity between cars and the healthcare revenue cycle is the tumultuous industries in which they reside. Automotive manufacturers in recent years have been pinched between increasing labor and fuel costs and stiffening competition from foreign entities. Similarly, the U.S. healthcare system is front page news with increasing government spending, decreasing insurance payer reimbursement and the rising number of uninsured in the headlines.

But when you boil macro problems down to the perspective of one hospital, it all becomes the same fundamental challenge--figuring out how to get paid in the midst of everything going on around us.

In the past, healthcare providers had much simpler methods for collecting for their services. There were fewer payers and fewer rules by which they paid, and most collections were adequately handled by back-end staff. Today, a more complex revenue cycle yields an increase in the number and complexity of denials, and providers need the ability to collect at every corner of the hospital.

Industry analysts and other experts' research suggest that as much as 25% of all claims are rejected or denied on first submission. Most--90%--of those are preventable, and even after a rejection more than half are still recoverable.

Getting paid is no longer solely a function of the billing office and other back-end departments. In fact, back-end efficiency depends directly on front-end process efficiency, and successful providers are realizing that in order to capture as much revenue as possible as early as possible, they must consider a revenue cycle that begins at the first point of contact with every patient.

Fortunately technology has been developed to aid providers in this effort.

How? By first obtaining accurate patient insurance information and demographic data. Of course this is easier said than done in the fast-paced, high-pressured front-end environment. Most employees filling entry-level front-end positions are less educated and lower paid. Their daily responsibilities include managing patient access according to charity programs and Medicaid, Medicare and commercial payer rules and restrictions. Their performance is evaluated on registration time because it directly affects patient satisfaction. The expectations are high, and so is the turnover rate.

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