Should You Outsource Your Rev Cycle Operations?

One revenue cycle VP breaks it all down.

Outsourcing revenue cycle management comes with controversy. Is it truly a good method for cutting costs?

The narrative isn't the same for every system. While outsourcing offers potential benefits, it also comes with its share of challenges.

At Moffitt Cancer Center, Vice President of revenue cycle management Lynn Ansley explains how she strategized to get the department where it is today and what considerations are important when deciding whether or not to outsource RCM.

Do Vendors Really Do It Better?

While it may be enticing to jump on the vendor train to cut costs, Ansley explains that health systems must be crystal clear with their expectations for vendors and thoroughly examine what the vendor can do for the specific challenges of that organization.

“Being realistic, there are times where I do think you have to outsource,” she says. “But what I have found and what I aim to do when we have a new partner is we're very, very upfront with our expectations. Because we have had partners in the past where we haven't been as upfront with those expectations, we ultimately end up parting ways, and that's just wasted effort and time for both.”

Mergers and acquisitions may be a good exception for outsourcing, Ansley explains.

“I've heard both sides of the coin when there are large organizations, especially health systems, that are merging with one another, and they have two different rev. cycles,” she says. “I think part of that comes into the conversation.”

While vendors will compare what they do for other health systems, Ansley says sometimes they can downplay the complexity of some of the RCM roles.

“I think that also weighs into the controversy… really understanding how one vendor can support health systems that are so different,” she says.

Where Does The CFO Come In?

To help make the most informed and sustainable solution, CFOs will need to collaborate with RCM teams to determine what the specific needs and challenges are in day-to-day financial operations, and how that may contrast bigger picture finances for the organization.

There are some benefits to outsourcing, like the potential for cost savings, scalability without the need for major investments in infrastructure or staffing, and allowing for a focus on core operations. But RCM leaders and CFOs should be extra choosy with vendors and make sure a well-thought-out strategy accompanies any outsourcing. Making the wrong decision could lead to a loss of control, a dependency on vendors, and data security risks.

CFOs should weigh in and determine which option best suits their organization. Additionally, CFOs should evaluate the vendor's track record, technology capabilities, and security measures to ensure they align with the health system's needs.
Also, consider the broader strategic implications of outsourcing. This includes evaluating how it aligns with the organization’s long-term goals, such as patient experience improvements, clinical outcomes, and operational efficiency.

Ultimately, the decision to outsource RCM is not just a financial one—it is a strategic move that requires careful consideration of both short-term benefits and long-term sustainability.