In a conversation with Olive's Chief Product Officer and practicing physician, Dr. YiDing Yu, shares how health systems are leveraging automation as a pivotal weapon to address the top drivers of revenue leakage.
What do you view as the key drivers of revenue leakage facing health systems today?
This year, I've had the pleasure to host two roundtable discussions with CFOs and VPs of revenue cycle from leading health systems, including at the HealthLeaders CFO Exchange. As health systems tackle record labor shortages and financial headwinds, top financial leaders are honing in on areas where they're losing potential revenue — both top line and bottom line.
Revenue leakage falls into two categories: pre-service and post-service.
Pre-service issues are the challenges of getting referred patients in the door. The greatest patient access issue cited repeatedly is prior authorization. It's a bottleneck to care and a top reason patients are turned away.
In terms of post-service issues, top drivers of preventable write-offs are denials from eligibility, coordination of benefits (COB), medical necessity and prior authorization. There are a host of other post-service causes of revenue leakage, including coding issues and patient collections, but the biggest bucket originates from front-end revenue cycle.
The "aha" moment in our executive roundtables was seeing all of this on the whiteboard with patient access and prior authorization contributing to both pre-service and post-service denials. That's low-hanging fruit to tackle with automation.
What steps are healthcare systems taking to address these front-end challenges?
At my roundtable, two executives–a national health system CFO and a regional health system executive–both spoke about centralizing prior authorizations to keep pace with their competition. They cited multiple reasons:
- Insurance companies incentivize patients to go to outpatient facilities or standalone imaging centers. These centers submit authorizations for the doctor's office, further incentivizing patient leakage.
- Doctor's offices shouldering authorization submissions can create challenges for hospitals. Expertise can be concentrated in a single person, so a team member out sick can lead to a backlog and dissatisfied patients.
- Centralizing has meaningful, positive revenue implications. For example, an academic medical center in a highly competitive market used Olive's prior authorization solution to empower a centralized team and saw a 25% reduction in cancellations and an 11% increase in bookings.
The bottom line from their experiences is that it works. Health systems that tackle prior authorization see quick ROI through retained patient volume.
In what other ways are health systems able to prevent denials and post-service revenue leakage?
Eligibility is still the top preventable denial, accounting for 25-30% of all preventable denials. I marvel at this statistic every time I see it because every health system I've ever met checks eligibility. Clearly, checking eligibility isn't enough.
Today's health systems also need streamlined workflows for subsequent patient access activities like COB, address verification, surveillance for insurance changes and monitoring for changes in authorization status. Yet, these manual tasks still fall on front-end registrars and increase the risk of human error. To alleviate this burden, automation is key.
At Olive, we believe autonomous solutions mean knowing when to check for eligibility, automatically bringing information back into the EHR, notifying users of benefit changes in standardized formats and triggering subsequent workflows when needed. Streamlining these workflows takes the burden off of front-end staff, gets patients in the door faster and reduces denials.
High deductible health plans can also contribute to patient abandonment of care. What are the best practices to address this?
In 2021, more than half of American private-sector workers were enrolled in high deductible plans, and this number is only increasing as insurance premiums rise.
Identifying primary or secondary coverage for patients who would otherwise have self-pay balances reduces medical debt for patients.
For financially vulnerable patients, automating coverage identification and evaluating their qualification for financial assistance programs improves the patient experience while avoiding write-offs from self-pay balances.
An integrated health network in Nevada wanted to minimize medical bills from becoming a patient's liability. They turned to Olive for coverage identification checks on the organization's self-pay receivables and found $500,000 in billable coverage for just five patients. Billing these coverages increased top-line revenue and took this debt burden off of patients.
As hospitals look to address the top drivers of revenue leakage, the experience of leading CFOs is that investing in patient access automation prevents revenue loss. Whether leveraging prior authorization automation or automating the cascade of patient access activities, technology can relieve the burden on your labor force while addressing your top and bottom line.
Dr. YiDing Yu is a former health system executive and serial entrepreneur in healthcare AI and digital tech solutions.