A few years ago, when the concept of outsourcing revenue cycle management (RCM) activities in healthcare was at its infancy, the cost savings figures were mere projections, the result of number crunching that was based mainly on potential and possibilities.
That has changed. It’s becoming increasingly difficult to ignore the many benefits that outsourcing provides to the healthcare industry, most notably the reduction in overhead spending for its early adapters.
According to a survey by industry watchdog Black Book, 80 percent of hospitals that have more than 200 beds saw revenue gains of 5 percent, an increase in revenue that is directly attributable to outsourcing, while those with less than 200 hospital beds increased their revenue by about 7 percent.
An overwhelming majority (70 percent) of Chief Financial officers who work in hospitals believe that outsourcing revenue cycle management is the best solution to lowering the cost of doing these activities in-house. This is evident given the fact that in 2014, for every processing claims reimbursements done by internal hospital staff, hospitals had to spend as much as $30 to $90 per transaction, with a total of $252 billion in spending. Experts believe outsourcing will help mitigate this high cost.
Another notable benefit that outsourcing RCM can give is the ability to provide industry-standard expertise through their state of the art technology and staff. They have the capability to integrate administrative-heavy functions such as billing, collections from patients with high-deductable health plans (using value-based payment models such as ICD-10), grievances, and accounts receivables without the need for hospital provides to shell out capital investments internally.
Many hospital providers are concerned that niche vendors might have the capacity to deliver analytics outside of a fee for service payment system since there is an increased adoption of value-based reimbursement models in the industry. Up to 90 percent of organizations are likewise concerned that they don’t have the financial muscle to purchase RCM systems and upgrade it to increase the capacity to perform data analytics activities.
It is best for healthcare provides to focus on their core competency of providing top notch healthcare to their patients instead of worrying about RCM activities that outsourcers can readily provide at a fraction of the cost of performing such administrative functions in-house.