Recession Proofing Your Practice | 3 Strategies for Successful Positioning with Effective Intelligence
by Matt Rolfes
Is a recession on the horizon? It’s the question on every provider’s mind as the U.S. economy navigates a period of challenges and uncertainty. Regardless of the pending recession, inflation is hitting patients hard in the pocketbook right now.
While some industry experts would suggest that healthcare is recession proof, any physician organization knows that economic pressures impact everything from supply costs to patient volume. Especially in this era of growing patient financial responsibility, bottom-line impacts can come from patients choosing to put healthcare bills on the backburner, or they may simply choose not to pay for healthcare services rendered —often the easier choice as healthcare debt no longer impacts a consumer’s credit score the same way as other forms of debt. In upcoming changes to credit reporting, the major credit bureaus “will stop counting unpaid medical debt under at least $500,” according to AP News.
Improving financial margin was already an imperative for today’s providers, who are also continually faced with the impacts of declining reimbursement from insurance payers and increasing overhead costs. According to MGMA, “significant near-term cuts to Medicare reimbursement of at least 7% [are] scheduled for Jan 1, 2023.” With a potential recession adding fuel to the fire, it is more important than ever that processes and safeguards exist to ensure capture of all potential revenue.
Simply put, providers must gain access to deeper data insights that will make revenue cycle processes more “effective.” This requires going beyond the analytics limitations of existing EHRs and practice management systems and bringing together multiple data sources to achieve a framework of effective intelligence— a model that helps providers reduce human intervention in the revenue cycle and ensure the staff you need are working effectively and generating the expected revenue with the least amount of work to increase profit margin.
Although physician practices cannot control the direction of the economy, they can take steps to best position themselves and prepare now for any economic downturn. Healthcare organizations should focus on these three strategies to recession proof their organization.
2. Maximize Billing Staff Resources
Two opposing pressures are creating challenges for physicians on the staffing front. First, unprecedented staffing shortages are making it increasingly difficult to find qualified staff to run an optimal revenue cycle. In a recent Akasa survey, “400 healthcare finance leaders reported having revenue cycle workforce shortages.” Amid high turnover, practices are spending way too much money on recruitment and onboarding.
On the other side of the coin, staff salaries are one of the highest costs for any healthcare organization, and many practices may find that they are overstaffed because workflows are not optimized around the most effective use of resources. This results in practices potentially carrying too much operational baggage into a recessed economy.
The goal for any practice is to identify and retain staff that deliver the greatest impact. This requires infrastructures and strategies that ensure satisfied, productive, and effective employees. Organizations can maximize billing staff resources by embracing the following three strategies:
Virtualization
The ability to work remotely has become an expectation of many qualified billing staff. Virtualization tools give practice administrators visibility into staff’s daily work, and when combined with the right analytics, these solutions provide key insights into how each staff member contributes to the bottom line.
Workflow Automation
Workflow automation solutions are primed to capture the right structured data and direct staff to tasks that will produce the greatest ROI, speeding up daily work and improving accuracy. The software should prioritize which claims need attention first in order to maximize collections and present daily priorities to the biller in precise order to maximize and even multiply each unit of work effort.
Incentive-Based Revenue Cycle
Incentive-based revenue cycle models have long been recognized as powerful tools for increasing collections and keeping staff happy across industries outside of healthcare. With the right visibility into staff performance, these strategies can go a long way to improving financial margins. Falck US tried this approach and banked an extra $21 million over their annual revenue goal.
2. Prioritize Patient Collections
Any healthcare organization looking back or trying to make a comparison to the last recession (2007-2009) must acknowledge a key differentiator today—growing patient financial responsibility. The industry has experienced a tectonic shift in the way reimbursement is captured, and successful future positioning demands that practices address patient financial responsibility for what it is: a mutual responsibility.
During a recession when money is tight, a doctor’s unpaid patient portion of a claim may now compete with light bills, cell phone bills and Disney Plus subscriptions. Doctors provide valuable services to the community and should be paid to further their missions. If your practice has been hesitant ask patients to pay their bills historically, use the recession as a reset point and re-engage with a new collection and outreach strategy. The future of your practice could depend on it.
A holistic approach that addresses both front-end and back-end processes is key to improving capture of patient balances. Technology is central to achieving the right framework as manual processes are often a non-starter for being proactive in today’s busy physician environments. As such, practices should embrace the right combination of technology and services:
Financial clearance strategies - Be “up front” with your patients using financial clearance strategies built on a foundation of automation can capture all the necessary pre-registration steps prior to the patient appointment (demographic and insurance verification, eligibility, authorizations, patient estimates, etc.). Armed with actionable intelligence, administrators and staff gain real-time views into patient financial clearance status, including balance owed from previous services – up front.
Mobile engagement and flexible payment options – Go where your patients are. Communicating with your patients using their preferred method – by phone, text, or email – is key to facilitating both understanding and payment of healthcare bills. Effective mobile communication can improve backend collections substantially. Patients are increasingly demanding flexibility when it comes to payment, and mobile access is key to optimal patient financial experiences going forward.
Provide patient financial counseling as a service – Lend a caring ear to your patients to help them understand and pay their bills. Too often, past due balances are hastily written off to bad debt, giving up on patients who would otherwise pay their bills. An effective patient financial engagement strategy that actively and empathetically engages with patients will allow for communication channels to remain open and active, and hopefully result in happy patients and paid doctors.
Always remember that the best review you can get is someone willing to pay their hard-earned money for your services. While 5 stars on reputational websites are good, your call center intelligence data and patient collection success can tell you even more about what your patients think of you.
3. Base Decisions on the Right Data
Financial decisions cannot be based on emotion, and healthcare executives need access to insights that enable them to understand the current state and predict the future financial health of their organization.
Financial forecasting that leverages real-time analytics can help providers become more proactive in a way that retrospective reports and pivot tables in Excel simply cannot. At a minimum, healthcare organizations should have regular insight into:
Zero touch resolution rate
Net collection rate
Debit Insurance AR >60%
Exhausted visits
Payment Posting Lag
Charge Lag
AR Days
Any economic downturn can and will usher in new challenges for today’s providers. The good news is there are safeguards financial executives can put into place to avoid getting caught off guard. Effective intelligence solutions can deliver real-time visibility into the revenue cycle, equipping healthcare organizations with the insights they need to maximize resources, improve decision making and weather any future economic storm.
Matt Rolfes, President and CEO, MedEvolve
Matt leverages his 15 years of experience in technology and finance to drive and support MedEvolve’s growth and operational success. Matt brings to MedEvolve expertise in accounting and finance, as well as corporate development and operations experience in both public and private companies.