Operational Considerations for Improvement
By Dr. David Edward Marcinko, FACFAS, MBA, CMP™
By Hope Rachel Hetico; RN, MHA, CPHQ, CMP™
One of us has been an acute general care hospital administrator while the other vice-president of a clinical and medical staff.
Throughout our respective tenures, providing high quality care with improved health outcomes was our primary concern – and actually is that of most hospitals of any size, geography, or demographic. Conflicts of interest were inevitable of course, and occasionally the interest of stakeholders collided, or was ignored. And, continually we realized – and were reminded – that money matters and the maxim “no margin, no mission” applies.
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Strong Management Required for Success
Nevertheless, the foundation of strong financial health ultimately lies in effective management of the hospital revenue cycle. And, strong internal management and leadership is the basis of an enhanced revenue cycle. In practical terms, effective management means understanding the process and targeting the core of the revenue cycle in order to fine-tune and support fiscal health and business growth.
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A Triad of Processes Groupers
For us, the processes of hospital revenue cycles were grouped in three areas corresponding to the journey of a patient through the system: the front door, the middle, and the back door; to the extent possible.
1. Front-door processes are termed patient access functions and revolve around scheduling, registration, pre-admission, and admissions. When these processes are streamlined and swift; the value is most evident to a hospitals’ customers, the patients, but it is also vital to the revenue maintenance (and enhancement) of the facility. The most effective and efficient time to accomplish patient access activities is when patients and their caregivers are together. Patient access needs to be handled by highly skilled and motivated employees who can accomplish a hospital’s goals for information capture while carrying out customer service objectives. This is also the optimal stage for achieving denial management.
2. Middle processes include case management (CM) and health information management (HIM). Those involved in the CM function act as gatekeepers to review the appropriateness of clinic referrals and ensure financial clearance is established. CM also involves developing a plan for discharge and monitoring to ensure it is timely and appropriate to the level of care. Another important focus of CM is the freeing up of acute care beds.
The HIM functions revolve around document management, coding, transcription, and charge capture. Financial performance can be significantly improved when case management and HIM activities are optimized by using information technologies that are integrated with process and workflow. The end result can be an increase in revenue and reduction in regulatory risk.
3. Finally, back-door processes are termed patient financial services (PFS) functions and revolve around billing, collections, follow-up, and resolution. These are the business office billing and administrative functions that support the front-line caregivers and that interface with external payers and patients to resolve outstanding accounts receivable. Back-door processes bring significant value to hospitals by reducing administrative costs, increasing collections levels, and dramatically lowering the percentage of aged accounts receivables [ARs].
Assessment
Modern hospitals today that are seeking to improve their bottom lines through better-managed and enhanced revenue cycle operations in these three areas front, middle, and back usually encounter challenges with people, processes, and technology. These challenges may be addressed by incorporating following:
- optimizing organizational structure;
- raising the bar through benchmarking; and
- adopting appropriate technology.
Editors: We appreciate the ME-P input of Karen White PhD and Ross Fidler.
Conclusion
Now, please tell us your hospital revenue cycles story and how these challenges were executed; successfully or not! What benchmarks did you use for them, and were any others required. Do these operational activities conflict or compliment each other; how and why or why not?
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