In-house Operating Improves Health Systems' Performances

February 23, 2020

When it comes to solving your revenue cycle management challenges, your solutions are closer than they appear.

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.

Getting Started

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?

Related: 4 Key Trends to Affect Healthcare Significantly in 2020

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.

The financial and operational specifics of how to execute the transition to an insourcing strategy will vary depending on company and context. It might require hiring new people, retraining current personnel, reallocating existing resources, or upgrading your technology infrastructure.

For insourcing to make sense as a solution, a hospital or healthcare organization should have the following:

  • The need to make a change

  • The willingness to make change

  • The capital required to invest in that change

  • The right in-house capabilities and resources

Maximize EMR Capabilities

Successfully embracing an insourcing solution as a way to get a handle on your revenue cycle processes is oftentimes a matter of leveraging your primary tech investments: your current EMR solution.

The increased prevalence of enterprise technology solutions for revenue management like Epic and Cerner means many hospitals and healthcare systems have potentially untapped functionality available directly into the native systems they are already using. The cost of adding capabilities to those systems-and optimizing them over time to meet your needs-is typically much less than starting from scratch-and the appeal of relying on a single system/solution in lieu of a chaotic mix of vendors and platforms is inherently appealing.

None of these systems are truly comprehensive, however. While optimizing your EMR platform can mean that you will need fewer bolt-on tech solutions, you should also be prepared to potentially fill any gaps in your EMR with best-in-breed technology; for example, leveraging a business intelligence platform to gather and deliver data insights.

Realizing Bottom-Line Benefits

Embracing an insourced approach often comes with a wide range of both tangible and intangible benefits. By investing in an insource strategy with expanded services and operational capabilities, you are taking full control of the continuum of your operation. No longer at the mercy of a vendor, you will find it easier to control costs, boost performance, and improve customer service. This is not to say that reputable vendors do bad work, but rather, it is simply hard to replace the level of control, accountability, and management when handling these issues in-house. When implemented in a strategic and thoughtful manner, the result can be a shift to a sustainable revenue cycle that is easier to refine and make continued investments in going forward.

Change Management Guidance

Even if investing in enhanced inhouse revenue cycle management capabilities is the best choice for your hospital or healthcare organization, making the most of that investment-and navigating that transition successfully-will likely require extensive support and change management expertise. Few hospitals and healthcare organizations are equipped to build and maintain the right teams, provide the adequate management training and support, and handle the transition without disrupting or negatively impacting current operations. Even knowing how and where to get started can be a challenge.

The key is finding the right partner. The right partner can help hospitals invest in their teams and technology and get the most out of those investments by complementing them with sound processes and accountability. The goal is top-tier results that are sustainable for the long term-without the hassle of having to send your business to a vendor or offshore alternative. If you choose an experienced and capable partner that can help deliver a high performing inhouse revenue cycle operation, it could very well be the last vendor you will ever need.

Peter Joseph is vice president of client services for HealthRise, a healthcare consulting firm focused on revenue cycle management maximization and sustainable improvement.