Each year when hospitals draft their budgets, hospital CFOs and financial leaders are challenged to find ways to cut costs while maintaining high-quality standards. As the healthcare business environment gets tougher, CFO and financial leaders are forced to be creative with the resources they have so that their organisations can accomplish their financial goals and ensure sustainability for their businesses. Healthcare Senate’s panel discussion on Revenue cycle intelligence: The need of the hour, delved into understanding methods, tools and technologies that can help financial leaders to choose the right techniques for revenue cycle management within their organisations.
The panellists for the session were Sumit Goel, Partner, Healthcare Advisory at KPMG in India (Moderator), Dr Somesh Mittal, MD & CEO, Vikram Hospitals, Manish Mehta, Group CFO, CK Birla Hospitals and Johar Sabuwala, CFO, HN Reliance Hospital.
Experts on the panel discussed the financial drivers of a hospital’s health and the role that revenue cycle management plays in healthcare. Dr Mittal explained how hospitals usually maintain their revenue cycles. He mentioned that most hospitals first concentrate on strengthening their toplines, manage the middle line costs in order to reach a certain level of profitability.
“Revenue cycle management has become an extremely important aspect in the present healthcare scenario because of the increased government interventions in streamlining healthcare costs and pricing policies. The hospitals need to look at how we can improve pricing strategies while maintaining the toplines and without over-charging. Secondly, it is paramount that we keep our costs low (be it manpower cost, pharmacy costs, power and fuel cost, marketing and material cost and more) while maintaining high quality. We cannot predict our topline revenue but we can certainly control the cost factors. Hospitals need to remember that if you maintain your costs, you will have enough cash flow to manage vendor payments and even get a good discount on procurements making it a win-win situation, Mittal maintained.”
They also looked at the common holes and operational challenges in revenue cycle management. Mehta pointed out that in healthcare one of the biggest pain points for revenue cycle management is delayed payment and claim processes. “It is import to track the entire claim process to understand the error areas. Unless to come across the errors and fix it, problems for the revenue cycle can worsen. Abroad, this process tracking is done using digital technologies but in India, it still needs to be done manually,” Mehta identified.
Similarly, the panellists also shared ideas to mitigate revenue leakages right from lead generation to care delivery within the hospital to care and engagement out of hospital (e.g. post discharge). They also looked at addressing the billing and collection challenges. While discussing ways to track the revenue cycle system within organisations, the panellists also pointed out the responsibilities and accountability associated with revenue cycle management.
“Training for tracking and monitoring of all claim recovery processes is extremely important and this should be done among revenue-generating departments,” suggested Sabuwala. In the end, the panellists spoke about ways and means to improve the revenue cycles using traditional and emerging technologies such as FinTech, AI and automation.
- The goal of revenue cycle management is to ensure smooth flow of cash for the hospital, improve payment systems and reduce unwanted cost variables
- Pricing of services is one of the most important aspects of revenue cycle management. Managing various cost components is also paramount. If costs are managed effectively, the cash flow within a hospital can be managed well
- Many hospitals end up taking many panel patients to increase top lines, but it is actually harmful and blocks cash flow. There should be a healthy mix of self payers, TPAs and more
- 70 per cent of claims get rejected because of human errors within hospitals. Therefore, hospitals need to train their staff in revenue cycle management as well. Today, insurance companies have come up with better deals in terms of payment disbursements methods, thereby making it beneficial for hospitals
- Ayushman Bharat is good. But, the threat for private players today is that this scheme may turn out to be another CGHS where getting money from the government becomes a never-ending challenge
- Standardised processes, better coordination among clinical and management staff as well as a proper tracking system for finance are very pivotal factors in effective revenue cycle management
- AI, cognitive automation can be effective tools to improve all functions of revenue cycle management