How simple, intuitive, patient-friendly payment options can impact your RCM
When it comes to keeping the financial systems of a healthcare organization stable and efficient, revenue cycle management (RCM) is key. RCM is a pivotal, long-term process that can track patient episodes from appointment scheduling all the way to the payment of the final balance by integrating personal and financial patient information with vital data about quality of care and treatment. This interaction between the clinical and financial sides of organizations is meant to simplify the healthcare process for both providers and patients across numerous interactions.
But with so many factors that go into RCM, simplifying is sometimes easier said than done. Making effective changes to benefit patients and providers can be hard to justify the costs or simply hard to understand. Oftentimes, hospital RCM services grow piece by piece over a number of years, costing an organization hundreds of thousands of dollars in both monetary and labor resources. One component after another is added to the existing system until complications arise, making life difficult for both patients and providers. Problems that take years to create aren’t simple to solve, and RCM processes can be so multifaceted and complex that it’s impossible to know where to start.
Begin by asking yourself, what needs simplification? What do these processes even do, and how much is each costing your organization?
A simplified payment process
Don’t be surprised if your answers lead you to the end of the RCM process. The fact is that the world of healthcare is complex, and myriad factors influence RCM and organizational cash flow. Every detail counts, and the most seemingly insignificant details that go into the final piece of the RCM process—payment of the final balance—can have massive effects on the efficacy of an organization’s RCM.
Simple-to-understand payment options benefit everyone. The more streamlined an organization’s payment processing technology is, the easier it is for patients to pay their co-pays or medical bills. This means frontline staff spend less time fielding calls or answering questions related to billing. Research also shows that when making a payment is easier for patients, providers get paid more quickly and receive higher scores on patient experience surveys. A timely, low friction payment process means less money and labor costs involved in the collections process.
Healthcare IT departments working together with external payment processing partners to simplify this process and improve the payment piece of the patient experience have seen great results and saved organizations time and money in a number of ways.
Increased cash flow
For healthcare organizations, improving payment channels means improving cash flow, and a higher cash flow is key for improving your bottom line. Cash flow will never change, however, if your RCM process makes it complicated for patients to pay bills in a timely fashion.
Work to understand patients’ wants and needs in the payment space—what are they looking for in a payment experience?—and simplify your payment process accordingly. As healthcare organizations monitor trends in patient preferences, they also should updating their payment options to match these preferences. In the long run, this will make the payment piece of the RCM process as simple as possible.
For example, more and more, patients are interested in online payment options. Helping patients access their payment history and pay bills from a computer, tablet, or even a smart-phone guarantees a more effortless payment process. A broader range of seamless options for patients to pay their bills can lead to more timely payments, increasing your organization’s cash flow.
Experts from community-orientated healthcare providers echo these sentiments. According to the Director of Revenue Cycle at Fort HealthCare John Bartell, the best way to improve RCM is to create as many avenues as possible for patients to pay any balance or bill. He recommends looking for ways the payment process can be streamlined to reduce burden on the patient and increase efficiency in business processes. Reducing steps in the RCM process means easier payments for patients, less administrative labor and an improved cash flow.
Increased days cash on hand
Not only can a simplified payment process increase your organization’s cash flow, it also can drastically improve days cash on hand (DCOH), providing increased financial stability. Simple, intuitive and patient-friendly payment options make it easier for patients to pay their co-pays or medical bills in a more timely fashion. As payments are made on-time on a more consistent basis, less money is spent on collections, allowing for a stable amount of cash on hand.
Patient payments become more and more crucial as experts see out-of-pocket and self-payment expenses increasing as changes continue happening in the healthcare sector. An increased number of unpaid bills can easily lead to a greater increase in collections-related costs if payment processing is complicated. By making payment easier on the front end, healthcare systems are able to minimize the number of charges that end up in collections.
DCOH is important to allow your organization to get money faster. Like cash flow, this financial metric demonstrates an improved bottom line and is a significant measure of hospital liquidity. By preventing expenses associated with the collections process, providers can easily increase DCOH and focus on quality of care and other metrics with more confidence about their organization’s financial stability.
From an accounting perspective, a simplified payment process can lead to simplified, improved reconciliation. As patient needs change, new platforms are introduced and new methods to pay are being added. The more complicated your system becomes, the more time- and resource-consuming the reconciliation process can be.
Healthcare organizations should work to streamline the reconciliation process into a single technology platform. No matter the number of payment options offered—from kiosks and online portals to recurring payment solutions—transactions are merged into a single point of reconciliation for convenient use.
A number of healthcare organizations are linking their payment processes and technology solutions to their electronic health records (EHR). By using this technology to merge patient personal and financial information, organizations are better positioned to assign and manage patient numbers and unique identifiers to keep records straight and simplify patient reporting and records. Having this data linked can lead to additional improvements in an organization’s RCM.
Industry professionals recommend forming “symbiotic relationships” between healthcare organizations and payment processing solutions. For example, Bartell noted payment processing partners help healthcare organizations stay up-to-date on the most recent advancements in payment options. Likewise, keeping the people working on your payment process current on the latest healthcare industry trends will guarantee payment processing solutions are flexible to meet an organization’s specific needs.
For most healthcare organizations, RCM is a constantly-growing line item. Expenses, both financial and labor-related, can grow slowly over years until the process is eating up five percent or more of your profits. Even worse, as previously stated, by the time RCM becomes a bother, your process can be so bogged down with added systems and procedures that it can be almost impossible to understand where the resource drain is coming from.
It may seem counterintuitive, but as you look to improve RCM in 2018, render your RCM system down to brass tacks and try starting at the end of the process. Look at the payment piece of the puzzle and find places where you can simplify and create a more frictionless experience for both your organization and your patients.