Featured Articles: Business Model

Squeeze the orange, not the turnip. Ignoring the needs of your revenue cycle impacts patient care

Monday, September 18, 2017   (0 Comments)
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Heather Niemi, Principal, Agatha Consulting


You work hard for your patients and chose this line of work because you believe in equity of access, the importance of healthcare and you want to make a difference.


So you focus on the obvious. You strive to improve care, pinching pennies to offer just a few more charity treatments, losing sleep on grant proposals. You try to reduce the consumption of gauze in your clinics. You don’t pay your employees quite as much as the commercial healthcare companies do. You use coupons.


These clinic focused savings are necessary and must be done. It is important to continue to find ways to be more efficient with our supplies and labor spending, however, chances are you have already maximized this area. There isn’t much left to squeeze out of that turnip.


So, let’s squeeze an orange – it tastes better than turnip juice, anyway.

Imagine the impact you can make with a healthy revenue cycle. Really, take a moment and imagine what capturing your current leakage could mean…


…did you imagine hiring an additional technician? Upgrading your computer systems? Providing access to another 100 underinsured patients?


Now that I have your attention, let’s talk about what you do next.


Start with an assessment of your full revenue cycle. At Agatha Consulting, we like to think of this as a journey, similar to achieving the highest rung on Maslow’s hierarchy. You must start with physiological and environmental needs before moving on to the intellectual and spiritual dimensions. Luckily, we aren’t seeking full revenue enlightenment. We’re looking for optimization. On this theme, we have built a hierarchy specific to the revenue optimization journey.


It all starts with Data Maturity. Data maturity models are widely available with a quick google search. In essence, the models tier capabilities in multiple categories, including data structure (disparate or coordinated), analytics (reactive reporting or predictive), personnel (no dedicated people or a full specialty department) and data governance. Check your gut and tie back to the old mantra, “if you can’t measure it, you can’t manage it”. If you can’t give your data structure and systems a 5 star rating, you start with investments here.


Next, we move onto Compliance. Again, we have chosen to work in a space that is highly regulated and complex. Having a strong proactive compliance program is a must. Without this program, your hard earned revenue can be at risk.


Third, the fun stuff. How would you rate the health of your Book of Business Model? This is the meatiest category, usually, because it includes all aspects of the patient financial journey. A few things to ponder:

  • Is collection work manual or is there a workflow?
  • Where is your leakage (bad debt, denials, no billing, other) coming from?
  • What is the cost to collect per patient encounter?
  • What is your relationship with your payors?
  • How long does it take you to get a bill out the door?
  • What do your collectors least like about their jobs?

If you just pulled out your metrics package to answer these questions – you are in fine shape here (but keep reading!). If you are scratching your head, even a little, this is where we start.


Once you understand your Book of Business Model and believe that you are effective in this area, it is time to consider investing in a continuous and nimble Process Improvement Model. Revenue, Insurance and Government Payments are ever shifting. Having a formal model ensures that you remain nimble.


It is this Process Improvement Model (and team) that will help you focus in the remaining two categories. The first of these is Contract Methodology. How much control do you feel when you engage with a payor during a negotiation? Do you feel that you have the data, insight and power to negotiate a favorable rate? Are you seeing downward pressure on reimbursement? Are your contracts overly complex or blissfully simple? This area is tricky -- it takes time and strong stomach muscles to address. The key starting point in this category is strong data and collection methodologies. When you know that you have a clean house and can bring efficient billing and collections to the payors you will demonstrate a partnership opportunity that others can’t. This is the leverage you need.


The last category in the hierarchy is Patient Education and Engagement. I don’t mean sending them home with a pamphlet. I mean fully engaging them in their insurance and financial options. Educating them, and your teams, on financial responsibility. Having a clear, fair and consistent policy for charity care. The work you invest in this last area will not only benefit your bottom line, it will help your patients as we move to a more consumer based healthcare model. Education will be key.


Don’t underestimate the importance of Revenue Operations in your ability to provide cost effective, excellent care. It can be a game changer.


Want to learn more?  Please join me, Heather Niemi, for my presentation at the upcoming Northwest Primary Care Conference.  I look forward to meeting you.



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