It has long been a popular and logical solution to address intractable revenue cycle pain points, lagging KPIs, or service and technology needs by outsourcing to reliable companies, for fear that these issues are not typically and appropriately addressed in-house.
Conventional wisdom often says subject matter experts or revenue cycle specialists with the necessary level of capability and cost-efficiency to key problems and processes have far surpassed the current level in which hospitals and health systems function.
That’s the theory, anyway.
In recent years, it has become increasingly evident there is real value in solutions that can be found much closer to home. Instead of looking outside the organization to secure the services of independent consultants or vendor partners, hospitals and healthcare organizations are progressively recognizing the value of insourcing. By implementing an insourced model, the process, service and technology can be managed in-house.
However, the reality is that, in many cases, instituting efficient revenue cycle processes and retraining programs in-house allows hospitals and health systems to insource work while achieving improvements in both revenue lift and cost savings. Utilizing creative and innovative ways to manage talent and enhance capabilities in-house, provides health systems with the opportunity to unlock a wide range of benefits: from improving the bottom line to bettering the overall patient experience.
What follows is a brief overview of how to achieve these benefits: a guide, with the purpose of helping you evaluate whether investing the time, money, and energy implementing an insourced model is right for your organization. Investing in building in-house capabilities, taking the steps necessary to save money without cutting jobs—and in many cases, bringing roles assumed by vendors back into your organization, will help to optimize your organization’s resources and aid in sustainable improvement.
The first step in determining if an insourcing solution makes sense for your hospital or healthcare system is to review KPIs and look closer at what isn’t working. Maybe the volume of denials is growing, the organization is absorbing too much bad debt, or the patient collections process is inefficient (or worse, causing inordinate amount of patient complaints).
The next step is to ask the most important question of all: Why is it not working? Is the cost structure out of alignment? Is a vendor failing to deliver? Are we even tracking the key performance indicators we’d need to know whether the vendor is succeeding or failing? Are there unaddressed or unavoidable inefficiencies impacting performance or financial metrics?
Once the source and scope of those pain points has been identified, it’s time to conduct a detailed ROI assessment to determine if an insourcing solution, at large scale or even in focused areas, makes sense for your organization.
Conducting an ROI Assessment
There are three main components that need to be addressed when evaluating the ROI of a potential insourcing investment:
- Performance – Do you have the capability to do the job better in-house than a vendor can? This requires the right combination of talent, the ability to control the process, a sufficiently strong management team, and the ability to make big change and handle the insourcing transition.
- Cost – Can you perform the function in-house in a more cost-effective manner? The answer to this is usually ‘yes’, because you won’t be paying a vendor premium, but there certainly are exceptions: specific types of highly specialized work, tasks that require elaborate or expensive tech infrastructure, or services that can benefit from a vendor’s ability to leverage offshore or blended-shore resources.
- Patient service/experience – What will the impact be on the patient experience? Not every outsourced service is high-touch and customer-facing, but many are. Hospitals and healthcare providers often find that they are better able to control the patient experience in-house, rather than relying on a vendor who is unlikely to be as well-versed in your mission, culture, and values.
Be Strategic—and Check the Boxes
Don’t make insourcing decisions in isolation—or in a haphazard manner. Any insourcing changes should be implemented strategically with an investment-oriented mindset, as part of a coordinated overarching strategy detailing how to best address your revenue cycle needs. Thinking of these decisions as sound investments can help break through the paralysis of ‘status quo’ or ‘easy way out.' With a long term view in mind, how should your organization plan for and execute upon your chosen revenue cycle strategy. Though not a perfect analogy, choosing to purchase a home and gain equity in an asset you own is often times the smarter use of resources than simply renting a living space that may serve its function in the immediate term, but leaves you with no long term pay-off or control.