Although patient-centered strategies are a common topic of debate in hospitals and health systems these days, it’s striking how seldom revenue cycle factors into the discussion. The lack of correlation between financial conversations and patient satisfaction is especially interesting given the prevalent role of the billing experience in patient dissatisfaction — even among patients very happy with their clinical care.
According to the most recent Kaiser Family Foundation Employer Health Benefits Survey, a person with employer-provided health insurance on average pays more than $5,500 for coverage with a deductible of more than $1,500. With so much out-of-pocket expense, it’s no wonder the billing and payment experience weighs so heavily on a patient’s overall healthcare experience. Hospital reimbursement is directly affected, too; those large balances are less likely to be collected, especially if a patient is less than satisfied. On top of that, satisfaction surveys like the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) now affect both the annual payment update and value-based incentives from the Centers for Medicare & Medicaid Services (CMS).
Perhaps it’s time to remove the historic wedge that has long divided the revenue cycle from patient engagement strategies. Instead, health systems should consider how an end-to-end revenue cycle approach that proactively educates and informs patients can turn a preeminent cause of frustration — the billing process — into a path for patient satisfaction and loyalty.
The power of an efficient process
A more engaging revenue cycle starts with a more integrated viewpoint for patients. Currently, “the revenue cycle” is often defined within the context of rather loosely-related processes that begin before, and resume after, the clinical service. A better approach might be to view it as an end-to-end process — much like what happens in an efficient manufacturing environment.
Let’s say, for example, that it takes several distinct steps for a manufacturing company to build and assemble its plastic widgets. To avoid the potential for a defective input to jam up the production process, each widget is subjected to inspection routines throughout the process. Only upon successful completion of each phase is a widget allowed to progress to the next step. At the same time, successful widgets proceed uninterrupted through the process.
In a similar way, the revenue cycle must follow certain steps starting at the time of scheduling, with continual yet seamlessly integrated checkpoints at each step along the care continuum. For health systems, that means implementing automated revenue cycle “best practices” that improve efficiency while also making the financial experience easier and more accessible for patients.
For example, before any patient receives scheduled care, a health system should be able to:
- Validate insurance coverage.
- Educate the patient on their anticipated out-of-pocket costs, where applicable.
- Offer financial counseling for patients who may be challenged to afford all costs.
By performing these best practices upfront, and monitoring the process to ensure 100 percent execution, hospitals and health systems can work preemptively to address any issues that might otherwise impact the patient’s financial outlook or impede their care. And the all-too-common defect, where an uninformed or unexpecting patient is asked to pay a big, surprise bill is avoided. In that way, providers can enable a smoother, more satisfying clinical and financial experience. Moreover, by digitizing each of these steps through a technology-enabled system, healthcare organizations gain opportunities to establish a stronger connection throughout the care continuum.
Transparency equals results
For hospitals and health systems, empowering the patient via the revenue cycle can pay off on the bottom line as well.
According to a retrospective data analysis R1 RCM recently conducted, transparency drives meaningful impact on collection yield. Study findings revealed that, on average, patients who were educated about their out-of-pocket liability before they received care paid 60 cents on each dollar owed; those who were not educated upfront about their liability paid only 40 cents per dollar. For hospitals struggling to operate on razor-thin margins, that difference can add up to a substantial amount of net revenue.
As providers look for ways to improve transparency and efficiency in the patient financial experience, digital transformation and disruptive new technologies are a key lever. By offering digital self-service across the revenue cycle, with embedded price transparency and financial counseling, providers can both hardwire best practices into the patient journey, as well as personalize that journey around each individual patient’s financial situation.
While the revenue cycle may not yet be a common avenue for patient satisfaction efforts, as patients see it, financial transparency and satisfaction are inexorably interwoven.
Just as with good clinical care, patients perceive value from hospitals committed to providing an innovative, proactive and positive financial experience. By looking at your revenue cycle approach from their perspective, providers can help patients regain a sense of understanding and control over their healthcare finances, empowering the patient while improving revenue.