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Consumerism in Healthcare: What ASC’s Need to Know

 

Consumerism in Healthcare: What ASC’s Need to Know

The ASC market is expected to grow at a 4 percent compound annual growth rate (CAGR) from 2017 to 2027, according to Future Market Insights, with multispecialty ASC’s expected to dominate reaching $76.8 billion over the next decade. As the industry moves toward value-based care, patients are increasingly interested in lower priced settings such as outpatient surgery and ASC’s which are disrupting traditional care models. 

However, ASC’s are in a delicate place in terms of meeting patient’s ever-increasing and rapidly changing expectations. Consumerism in healthcare has been an ongoing complex study which is a challenge even for ASC’s.

ASC’s have a lot to learn from customer-centric business models implemented within other industries like retail and tech. Here are just a few of the things that ASC’s need to learn in order to adapt to the increasing consumerism trend: 

The four pillars of consumerism: access, experience, pricing, and infrastructure

Kaufman Hall’s 2019 Healthcare Consumerism Index reveals the challenges that legacy healthcare providers face in adapting to the ever-rising bar of consumer needs and expectations.

Here are some key takeaways from their report:

  • Only 8% of hospitals and health systems demonstrate strong consumer-centric performance
  • A staggering 68% of organizations either have not begun (29%), or are in the very early stages of their consumerism efforts (39%)

For ASC’s and the healthcare industry as a whole to catch-up in an online, convenience-obsessed, and increasingly consumer-focused world, they would need to excel in the four pillars of consumerism.


Access: Today’s consumers increasingly demand quick and easy access to any and all services through a variety of access points—whether physical or virtual—with digital tools to add convenience. 

  • More than half of respondents offer urgent or ambulatory care centers, but only a third offer widespread, basic online scheduling for existing patients.

Experience: Enhancing the consumer experience has a lot to do with patient communication.  Some strategies include: automated appointment reminders, centralized call routing, electronic messaging between patients and providers, consumer-friendly billing and payment options. 

  • Few offer real-time scheduling and communications necessary to keep pace with today’s digitally connected consumers.

Pricing: A recent Kaufman Hall survey of how US consumers find and select providers and services found that more than a third research costs in selecting where to go for comparable services. As expectations rise and federal and state laws move toward requiring greater transparency, healthcare providers must implement effective pricing strategies and tools to communicate price estimates to consumers conveniently and accurately.

  • Only few of healthcare providers offer true price transparency.

Infrastructure: Overall efforts to build an infrastructure of consumer insights and analytics continue to be sub-optimal relative to its critical importance for competing effectively in the marketplace

  • More than half of hospitals and health systems have developed consumer-centric missions and strategies, but a majority have not yet built infrastructures needed to support such objectives.

Patients are taking an increasingly active role in their healthcare

The rise in healthcare consumerism is driven by a lot of factors, one of which is patients having greater financial responsibility (higher co-pay, deductibles, and overall costs). With such high costs, patients tend to “shop” for surgical options. 

Patients’ expectations are also changing, driven by their experiences from other industries like airlines and retail. Patients demand improved services and enhanced experiences when engaging with providers and health systems. 

As patients are faced with increased treatment choices, care options, and cost concerns, they are now becoming highly active in their healthcare choices.

Patients are increasingly prepared to interact as consumers rather than as passive patients. As consumers, patients want to be in control of the services that they would want to afford. They want to be involved and informed of every step that will be made throughout their healthcare experience.

ASC’s have long led the way in cost-effective and quality care, serving as role models for other providers trying to determine how best to navigate today's evolving landscape that rewards quality over quantity. The number of procedures performed in ASC’s has continually been on the rise, with surgery centers now performing more than 20 million surgeries annually. ASC’s still have a long way to go to be on par with other industries in meeting, or exceeding, a patient’s expectations. Now is the time to ensure that your ASC is on the right track and not lagging in the consumerism trend. 

3 Tips to Improve Your Revenue Cycle in 2019

  • July 31, 2019
  • Published in Billing

 

Healthcare providers today face increasing cost pressures and inability to grow their revenues which can lead to diminished operating results. A survey conducted by AMGA in 2017 revealed that the operating loss per physician increased from 10% of net revenue in 2016 to a loss of 17.5% of net revenue in 2017. The survey participants included nearly 50 medical groups and health systems, representing more than 13,000 providers.

Unlike other businesses, medical practices can’t pass on rising costs (e.g. increasing rents, employee salaries, etc.) to patients, making it critical that they look for ways to control costs.

However, the same financial struggles that physician practices are experiencing are also present in hospitals. Both nonprofit and for-profit hospitals are seeing revenue decline and losses mount as new reimbursement models emphasize shorter stays and more care delivered in outpatient settings. 

The results of the survey show that healthcare providers face a significant challenge to grow their revenues and need to reconsider their revenue cycle strategy. Here are 3 tips for improving your revenue cycle management:

Implement cost-effective technology for better financial performance

High tech can cause high costs for practices and ultimately average up to $32,500 per doctor annually according to the Medical Group Management Association (MGMA). That’s why it’s important for healthcare providers to implement cost-effective technological solutions and not just ride every digital wave. The transition to provide higher-quality, value-based care is becoming increasingly expensive.

According to MGMA, better-performing practices can do the following:

  • Control information technology (IT) expenses 
  • Spend less on operating expenses 
  • Achieve greater physician productivity 
  • Implement better practice operations

MGMA also found that hiring more nonphysician providers and support staff can make practices more profitable and productive.

Healthcare providers should use cost-effective technology every single day to deliver exceptional service in every patient interaction. Digital solutions in managing revenue cycle management is important for streamlining patient encounters and payments. HIMSS researchers suggested that healthcare organizations should consider a more automated approach to the revenue cycle management to improve work flows and decrease human error and labor costs.

Improve claims denial management

In revenue cycle management, if an error occurs in any part of the cycle, it could have a major and rippling effect of the overall revenue cycle performance.

A 2016 HIMSS Analytics Survey showed that approximately one-third of healthcare providers still use a manual approach to manage claim denials. It also showed that only 44% of the providers surveyed used automated claims denial management and 18% had an in-house program.

Reducing the number of denied claims can be achieved when healthcare providers include in their revenue cycle management a claims denial prevention system. This kind of system can track and pinpoint the root cause of claims denials, the number of claims denied, and who are the physicians involved. This can greatly help in determining denial rates and track these patterns. Every denial needs to be reviewed and effective improvement efforts need to be made collaboratively.

Track key performance indicators

What you can’t measure, you can’t manage. To put it simply, data should be the primary driver in your organization’s revenue cycle decisions and strategy. Key performance indicators and quality assurance checks inform revenue cycle managers about the financial health of their organization and ensure that data is accurate. Efficient revenue cycle management relies on measuring key indicators, setting goals, and continuous improvement. 

 

Data Security Issues in Offshore Revenue Cycle Management 

Virtual Partner

Offshoring revenue cycle management has been an increasing phenomenon in the healthcare landscape today. Primary drivers for this include cost-efficiency, controlled management, specialization and expertise, economies of manpower, and an affordable edge in information technology. 

However, seemingly apparent economic advantages have given rise to controversies and popular debate against offshore outsourcing. With offshoring, data transfer is inevitable because once access is given to foreign third-party service providers, it is almost impossible to prevent data from leaving the company and the country. In the event of offshore data breaches, healthcare companies may become target of domestic lawsuits.

According to a 2013 Trustwave Global Security Report of  450 global data breach investigations, 63% were linked to third party component of IT administration. The report says that outsourcing, itself, is not necessarily risky but that bad decisions are being made. Part of the problem, according to Trustwave is that service providers don’t view security as being as valuable as their American clients do. 

An example of an infamous data breach incident happened on October 7, 2003 which sent terror throughout the medical system. The University of California at San Francisco (UCSF) Medical Center received an email from a Pakistani medical transcriber threatening to disclose private records if UCSF did not pay her a certain amount she claimed it owed her in backpay. UCSF then verified the authenticity of the records she possessed and launched an investigation. Authorities uncovered a chain of subcontractors of whom UCSF was completely unaware.

Privacy violators are subject to both civil and criminal penalties. According to the United States Department of Health and Human Services Office for Civil Rights (HHS OCR), these are the penalties for each tier: 

Tier 1: $100-$50,000 per violation, capped at $25,000 per year the issue persisted

Tier 2: $1,000-$50,000 per violation, capped at $100,000 per year the issue persisted

Tier 3: $10,000-$50,000 per violation, capped at $250,000 per year the issue persisted

Tier 4: $50,000 per violation, capped at $1.5 million per year the issue persisted

The healthcare industry has long been a target for hackers and it seems the trend is still increasing. According to the US Department of Health and Human Services' breach portal, in 1st quarter of 2017 there were 22 breaches recorded in the US while this figure soared to a high of 99 in 2nd quarter of 2018. Email was also the top source of data breaches in the healthcare industry in 2018.

An analysis of 1,138 health data breaches affecting a total of 164 million patients from October 2009 through the end of 2017 in the breach portal shows that the top cause of data breaches (42 percent of cases) was theft of equipment or information by unknown outsiders or by current or former employees. Another 25 percent of cases involved employee errors like mailing or emailing records to the wrong person, sending unencrypted data, taking records home or forwarding data to personal accounts or devices.

This means that more than half of breaches were due to internal negligence and thus to some extent preventable.

With recent data breaches surrounding outsourcing and offshoring, it is essential to assess your third-party vendors' operations, data security capabilities, and procedures in safeguarding member data privacy to avoid all that comes with a data breach.

It is essential for healthcare organizations to go beyond the standard HIPAA compliance standards. 

Think twice before offshoring the more sensitive aspects of your revenue cycle. 

Always have a data security program in place that allows your organization to stay on top of the latest cyber threats and be able to respond and then recover when a breach takes place. You may not completely get ahead of all online risks, but that doesn’t mean you can’t be prepared.

Data security problems arise from poor management and negligence. Whether the decision to offshore is on the table or not, healthcare facilities must regularly check measures and defenses to prevent threats to data breaches and cyberattacks. 

How to Avoid Revenue Cycle Outsourcing Mistakes

  • May 29, 2019
  • Published in Billing

In today’s evolving healthcare landscape, providers look for ways to better adapt to market conditions while sustaining profitability and gaining a competitive edge, so they opt to outsource some or all their revenue cycle functions to a third-party vendor. 

Healthcare providers are under intense pressure to reduce spending while improving care quality and revenue cycle outsourcing has the potential to significantly decrease costs and increase efficiency. 

A Black Book survey found that 80 percent of hospital leaders are considering or vetting full revenue cycle management outsourcing by the end of 2019. The surveyed hospital executives said they would partner with a third-party vendor to help manage their revenue cycle so that they could focus on decreasing costs and value-based care implementation.

The global healthcare revenue cycle management outsourcing market is projected to see significant growth at a compound annual growth rate (CAGR) of 11.9 percent from 2017 to 2023, according to one market report estimate, with the market reaching a valuation of $23 billion by the end of the period.

The decision to outsource revenue cycle management is complex but usually involves the elements of cost, access to expertise, technology, and scalability to be able to perform well under an increased and expanding workload and demand. Outsourcing allows providers to focus on their core functions and free themselves from the burden of paying a high amount of fixed costs for handling billing in-house. 

Here are some benefits to revenue cycle outsourcing: 

Lower overall cost (while achieving similar or better performance)

Advanced revenue cycle technology and optimized processes

Scalability of operations, such as adding new facilities

Access to experienced and centralized talent pools 

However, there are also some pitfalls to outsourcing especially if providers are not able to work with the right partner.  In common cases, reports of high denial rates and their causes remain undetermined due to a general lack of effective analytics and transparency. Some third-party vendors can become less professional, unresponsive and exhibit a lack of cooperation compared to the initial sales period. 

Recently, Astria Health (a three-hospital system in eastern Washington) filed for bankruptcy, citing poor A/R performance from revenue cycle outsourcing as the primary cause behind their declining cash flow. The third-party vendor was put in charge of office billing, claims processing, and collecting but failed to process large amounts of accounts receivable (A/R) in a timely manner, resulting in a significant cashflow shortfall for Astria Health. 

Therefore, here are some strategies to consider in avoiding revenue cycle outsourcing mistakes:

Performance is Key  

Performance should always be the key driver behind outsourcing decisions - not just cost, access to technology, expertise, etc. Pay attention to claim denial rates and patient collection times and compare it with other vendors. 

A partner must execute transparency in its services. If they cannot illustrate results or past performance, they are likely not a good choice. They should not only have a competitive price point, but also have strong performance and industry expertise. 

In defining contract terms with the third-party vendor, clearly and concisely define performance and service-level expectations, which could also carry bonus potential if the vendor overperforms. Setting objective metrics is crucial so that both parties know what the focus is and how they can work together to achieve their goals and enhance operational performance.  

Carefully Consider What to Outsource

The providers should also take into consideration the aspects of their revenue cycle that their organization must outsource. That said, there are some variables that are especially significant. Some organizations outsource their revenue cycle from end to end while some only outsource revenue cycle components such as coding and accounts receivable follow-up and the rest are retained in-house. What course an organization chooses will depend on its characteristics and pain points. Selecting the right partner for the specific revenue cycle component you are outsourcing is crucial and requires careful evaluation. 

Choose a Partner You Can Trust

Providers need to make sure that their relationship with their vendor is extremely transparent. Both sides need to understand that they are going to work very closely to succeed. Providers need to know their partner vendor’s support staff and capabilities well.  Are they offshoring any of their work?  Do they have experienced coders?  Do they have well-trained and friendly staff?  How do they handle claims denials?  

Outsourcing can be a highly effective solution to gain a competitive advantage. By choosing the right outsourcing partner, providers can better manage change and move toward decreased costs and increased efficiency so that they can focus on delivering better quality of care.

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