Back-end revenue cycle management is a top priority as organizations seek operational and cost efficiency.
Even in a tight economic environment that is forcing healthcare organizations to scale back costs, many hospital and health system leaders are still eyeing investments in automation to improve workflows and save money in the long run.
Revenue cycle managment (RCM) solutions especially can significantly reduce administrative burden, allowing staff to spend time and energy on what matters most: improving and delivering care.
The risk of spending more for the reward of operational efficiency appears worth the squeeze for more than one-third of health system executives in a recent survey who said they are planning to automate two or more RCM or finance functions in 2024. The survey, conducted by the Healthcare Financial Management Association and strategy and market research company Eliciting Insights, fielded responses from 321 health system executives in May.
Back-end RCM was selected as the highest automation priority, with 40% of executives saying they planned to invest, followed by patient access (37%) and mid-revenue cycle (32%). Within RCM, the biggest areas of focus highlighted by respondents were prior authorization (39%), denials/appeals management (37%), and patient self-service/digital front door (37%).
Covenant Health senior vice president and CFO Stephen Forney recently shared with HealthLeaders how the multi-state, Massachusetts-based health system is fighting "financial toxicity" through integrating AI.
"At Covenant, we've seen how AI can play a crucial role in addressing financial challenges by streamlining workflows and improving revenue cycle management," Forney said. "We leverage an automated philanthropic aid platform, Atlas Health, that helps keep us up to date on the latest aid programs, alerts us when they're open for enrollment, and helps match our patients to the program they're best suited for, streamlining the process significantly for all stakeholders.
"Integrating AI into our systems promotes efficient resource utilization and better financial outcomes."
Health systems appear to also be interested pursuing standalone RCM solutions, whether those are vendors that offer an all-encompassing range of tools, or single functionality vendors that can improve specific areas. According to the survey, 95% of executives planning to purchase RCM or finance technology and services are willing to consider "bolt-on" vendors outside of their EHR systems.
Joann Ferguson, vice president of revenue cycle at Henry Ford Health, told HealthLeaders that her advice to other health systems considering AI is to do their due diligence, find the right fit, and be willing to pursue the best solutions.
"Going for the quick fix or using last year’s technology because it's cheaper will only make change more painful in the future," Ferguson said. "That means finding a partner who understands rev cycle operations and AI, and what your team needs to be successful.
"AI products that will grow and can keep pace with the breakneck speed of tech innovation in healthcare are a must, not a 'nice to have.'"
Jay Asser is the contributing editor for strategy at HealthLeaders.
KEY TAKEAWAYS
More than one-third of surveyed health system executives said they plan to automate two or more revenue cycle management or finance functions in 2024.
While operating margins are thin for many healthcare organizations at the moment, improving revenue cycle functions, particularly on the back end, can lead to financial flexibility.
Executives are also open to bringing in vendors who can fill specific functions to supplement their EHR systems.