As healthcare enters its patient-centered, payment-bundled era, hospitals and physicians are looking for a shake-up in revenue cycle management.
“I'm surprised that we continue to see the status quo in revenue cycle management," said Sean Wieland, managing director and senior research analyst at investment bank and asset management firm, Piper Jaffray.
"Healthcare is the only industry that has a revenue cycle with a designated subsector of companies that manage it," he said. "It costs 20 to 30 cents on the dollar to cross a trade in healthcare – to take the money from the buyer of healthcare, the self-insured employer, and put it into the pockets of the providers of healthcare," he said. In comparison, he noted, "Wall Street crosses a trade for fractions of a penny."
Learn on-demand, earn credit, find products and solutions. Get Started >>
There's an "enormous opportunity" to take costs out of the process "by actually fixing the revenue cycle," Wieland said. "And by fixing I don't mean by incremental process improvements. I mean blowing it up. And really rethinking the process of how we go about getting doctors and hospitals paid."
Wieland thinks some radical improvements will be seen over the next decade.
[See also: Rescuing the revenue cycle]
On the ambulatory side, change will be spurred by companies, like athenahealth, he said, providing disruptive technologies that will change the revenue management landscape.
On the inpatient side, change will be forced by health systems vertically integrating risk into their models, said Wieland. "Taking that risk from the payers and putting it on their books, by definition that disrupts the revenue cycle because there won't need to be one. The premium dollar will go to the health system and they'll have to manage that cost."
In the meantime, it's clear from provider opinions such as those expressed in a recent KLAS report, "2013 Revenue Cycle Perception – Providers’ Wish List: Integration, Single-Source, Reform," that healthcare organizations are dissatisfied with their RCM options.
In it, providers expressed "RCM integration with both inpatient EMR and ambulatory EMR/patient accounting is at the forefront of their minds as most look to establish an enterprise-wise revenue cycle strategy that supports today’s value-based models of care including things like episode-of-care billing, family billing, and bundled payments," wrote Lois Krotz, strategic operations director at KLAS, in the report.
While such a holistic approach to integration is critical in most providers' opinions, few RCM suites are able to offer it, according to the study.
For instance, 77 percent of providers "believe patient accounting and practice management integration is important and critical to their revenue cycle environment," but just 14 percent of vendors offer the capability.
"Cerner, Epic, GE, and Siemens all have integrated PA/PM solutions, but adoption levels and experience vary," she adds. "LSS is not integrated but rather is tightly interfaced with MEDITECH, with high satisfaction. McKesson and Allscripts don’t currently have integrated PA/PM offerings."
According to KLAS, 78 percent of providers said inpatient EHR integration is their key concern; 41 percent say it's ambulatory integration.
While many of the revenue cycle directors interviewed for the report expressed pessimism in regards to improved revenue cycle management in the near future, John Hoyt, executive vice president of HIMSS Analytics, said in an interview published in the June 2013 print issue of Healthcare Finance News’ sister publication, Healthcare IT News, a new future for revenue cycle is coming. (HIMSS Analytics is a division of HIMSS, Healthcare Finance News’ parent company.)
"The vendors are telling us that they're preparing, and they're looking at revenue cycle redesigns to take into account bundled payments and ACO reimbursements," said Hoyt. In the meantime, most providers have other things to invest in before they splurge on next-generation RCM systems, he said. "They're not going to buy them until they've gotten all they can get out of meaningful use."
After that? "We think there's going to be a boom."
This story is based on a report appearing on HealthcareITNews.com.