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Completing the cycle: Healthcare finance execs see 2016 as the year of integration for revenue cycle

Leaders from Mayo Clinic, Kaiser Permanente, Cleveland Clinic and others all say patient involvement is key.

Susan Morse, Managing Editor

Mark Norby, chair of revenue cycle at the Mayo Clinic, is focused on integrating the system's revenue cycle operations.Mark Norby, chair of revenue cycle at the Mayo Clinic, is focused on integrating the system's revenue cycle operations.

They don't call it a cycle for nothing.

On the surface it seems simple. A patient visits a doctor and the healthcare provider is paid for the service. But in truth, the revenue cycle is a complicated circuit of administrative, technological, financial and patient-level processes that many healthcare administrators say is in need of streamlining.

A complex system for revenue creates a lot of room for waste. That's why most healthcare finance managers are making 2016 the year of integration in the revenue cycle, whether it's by tightening operations or by involving patients more in the financial side of their care.

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Mark Norby, the Mayo Clinic's revenue cycle chair, knows about integration. For the past five years, Norby has worked on setting up revenue cycle as a shared service across the massive system's myriad facilities.

[Learn more about the Revenue Cycle Solutions Summit]

Mayo's main campus in Rochester, Minnesota, and other campuses in Florida and Arizona, already use the same shared service for revenue cycle. But this year the focus is adding Midwest health system sites in southern Minnesota and western Wisconsin to the network.

"Under a shared service, instead of Minnesota health system site operating independently and autonomously, you're not separate," he said. "They are now part of overall structure. My team is responsible for the people of that Midwest health system, integrated into the overall revenue cycle governance structure."

Instead of having a supervisor, manager or director for every entity in Mayo's network, the system will eventually run one revenue cycle organization.

Norby has staff of approximately 2,500 people across all Mayo sites who make sure that the system's $10 billion in total revenue is properly coded, billed and collected.

The coding manager for southern Minnesota for instance, will have an understanding of what's going on in Wisconsin, Norby said.

"Eventually, we'll have one integrated revenue cycle," Norby said. "The benefit is increased efficiency resulting in streamlining the expense base."

Of course, that kind of change comes with pitfalls, especially when so many staff members who are used to autonomy suddenly answer to a central office.

[Also: Overwhelming support for outsourcing revenue cycle management in healthcare]

"That's been one of the key challenges over the past several years, the impression that the smaller sites see this as Rochester taking over," Norby said. "We don't have that corporate mentality. That's what people expected because it's a change."

Luckily, Norby and his team already had experience integrating revenue cycle, having learned a few lessons when Mayo's the shared service model rolled out in Arizona and Florida.

"That relationship building, flexibility and openness was tremendously helpful in moving forward as we came across opportunities for standardization and efficiency," he said. "Moving forward, all agreed it would be better for the patient and for the Mayo Clinic to make a change."

Norby and his staff are already working on the next steps in integrating all of the Mayo Clnic's revenue cycle, debating which model will work best for the top-tier healthcare provider.

"Is it a single office, a centralized business office or a single business office? What is the right model?" Norby said. "We don't necessarily know what the right vision is, but we are committed to working as a team to design the best revenue cycle for Mayo Clinic."

The patient perspective

For Karen Mihalik, executive director of revenue cycle management
at the Cleveland Clinic, integrating revenue cycle in 2016 means finding ways to streamline the process for patients.

"There are a few key ways to improve the patient experience: gathering information, leveraging data across service lines and locations so the patient doesn't have to keep providing it," Mihalik said. "Make sure the patient receives the expected bill."

Cleveland Clinic runs a centralized business office, but the varied hospitals within the health system remain on separate technology platforms.

"We've been creative in building some solutions," she said. "An integrated statement puts a strain on caregivers in 20 systems. There's a greater risk of error. That's the big challenge for a decentralized system."

[Also: Revenue cycle vendors rush to innovate amid consumer changes in healthcare]

Cleveland Clinic is in the midst of conversion to a single platform, the same platform as its electronic health record. Mihalik, who works with a revenue cycle team of about 1,700 full-time employees, said she wants to integrate a greater level of payer specificity.

"We're leveraging additional analytics, using payer remit data in a more meaningful way," she said. "We're focused on clinical outcomes."

Cleveland Clinic is also unifying the mid-cycle, tightening up coding and clinical documentation and connecting the mid-cycle with business office outcomes to ensure full reimbursement.

"Patients and their engagement are absolutely key," Mihalik said. "Our world is really focused on first and foremost patients and being able to provide them timely and integrated information."

David Nyburg, Kaiser Permanente's vice president for revenue cycle management for Northern California, said Kaiser is investing greatly in its "patient facing" systems and trying to solve the question: "How do we meet each individual patient and member and where they are in ability to pay?"

For Kaiser, which runs its own health plan, partnering with the plan helps it improve the entire revenue cycle experience.

"Think about it. With end-to-end, the old story would be siloing your strategies. We are evolving to be looking more holistically on end-to-end," said Nyburg.

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Kaiser has been through much of the integration process, having already unified provider and insurance with a prepaid model of care.

"Historically we've not had or needed robust revenue capabilities," said Nyburg, who has worked for Kaiser for nine years.

Kaiser got its start in California when it suggested insurance companies pay a fixed amount per day up front for each covered construction or shipyard worker.

The prepaid health model is already about keeping patients healthy rather than treating them on a fee-for-service basis, he said.

"Think about model from prepay to where we're at today and what's happened in the market: the employers we provide care to as well as employers looking for a more robust data. Our products and our membership mix has changed. Today about 30 percent of Kaiser membership is in a deductible-related plan."

Millions of encounters flow through a system that is "payer agnostic," he said, not differentiating between a Kaiser or Medicare product. Claims are reviewed and adjudicated.

"Currently, every office, lab and hospital is going through a standardization process," Nyburg said.

"We're spending a lot of time around the experience, how might we create delivery in the system so when you walk into a medical center you have some commonality," he said.

The tech solution

Mayo Clinic chose Epic, Norby said, and this spring partnered with Optum 360 for a patient cost estimator that will improve the estimating process. The ultimate goal is to get price estimator not only of total charges, but what is expected out-of-pocket.

Mayo is also hinging a lot on making its billing process easier for patients to understand.

"We need to simplify the billing process to better position us to more directly and simply present patients with statements of what they owe and for what," he said.

The Mayo Clinic is also redesigning its website from an insurance and billing perspective. For example, it has created a slate of videos for its website to help patients navigate the billing process.

"We're in the development phase," Norby said. "Our hope is to have Phase I available in 2016."

Other health systems are leaning on technology to make their integrations go smoothly.

For example, Dartmouth-Hitchcock Medical Center has implemented new scheduling, registration and billing systems that wrap around their existing electronic health records software, according to Chief Financial Officer Robin Kilfeather-Mackey.

"Now that we have the academic health enterprise on a fully integrated clinical and administrative platform, in 2016 we will begin to sequence implementing this end-to-end IT solution across our health system at various affiliate locations," she said.

Dartmouth-Hitchcock has also launched an "Analytics Institute" that will track patient data with the hope of gleaning more information about its utilization patterns.

[Also: Johns Hopkins economist to keynote Revenue Cycle Solutions Summit in December]

"We will also continue to be engaged in population health and patient-centered data analytics. We have recently implemented more advanced technical capabilities in this space," she said.

But while new technology is helping speed along integration, health systems such as the Mayo Clinic are still grappling the inefficiency of long-held habits.

For example, when a patient comes in to a Mayo facility, much of the registration process is still manual, Norby said. And pre-authorization is often needed either in writing or verbally.

"We do that but it's time consuming," he said. "It's an expensive part of the overall revenue cycle process."

Even top systems struggle with revenue cycle, making it clear that more needs to be done to improve the experience for patients.

"Our patient engagement is low. Patients have difficulty navigating the online experience and price transparency is not easily obtained. Value compared to price is not easily understood," said Norby.

"I would say the greatest opportunity we have is to improve the patient experience."

Twitter: @SusanJMorse