New business office opportunities emerge amid tech advances
With pressure rising to improve performance, decision makers must define specific needs and carefully assess the assistance they’ll need.
Hospital business offices are notorious for staff turnover, workforce shortages and redundant manual processes. These teams often represent the most transient and lowest-paid members of the healthcare workforce while shouldering one of the organization’s top priorities: cash flow.
Community hospitals and Federally Qualified Healthcare Centers are particularly susceptible to financial risks because of business office workforce challenges. A recent Commonwealth Fund survey states that 70 percent of FQHCs currently face staffing gaps.
Many healthcare finance executives have turned to business office outsourcing to address workforce challenges and ensure financial sustainability. With 16 percent expected growth in revenue cycle outsourcing from now until 2028, the decision to outsource services across the revenue cycle, particularly the business office, will continue to be top of mind for healthcare leaders.
This finding is reiterated in HFMA’s 2024 Health System CFO Pain Points Report, in which 49 percent of respondents cite a business office labor shortage, and 26 percent of health systems are looking to outsource revenue cycle roles.
However, healthcare leaders must consider additional factors involved in business office outsourcing. People, process, and technology all play a role in justifying the decision and ensuring success.
Here, we’ll share from our experience and suggest four specific questions to ask before making new business office decisions.
Four considerations for revenue cycle leaders
Hospitals and health systems consider outsourcing this challenging revenue cycle function for several reasons. They seek to improve the patient billing experience, increase staff stability and efficiency boost overall revenue capture.
However, before proceeding with any type of business office change, revenue cycle leaders should ask the following four questions.
Do the financials make sense? Decision makers should request a deep analysis of the potential financial improvements and return on investment. Then, armed with this information, they can compare anticipated results to historical trends in billing and collections.
Do we have the talent and funding required from a technology perspective? Modern business offices require data lakehouses, robotic process automation (RPA) and the ability to incorporate new AI technology capabilities. These tools are necessary to survive against payer-created headwinds as their adoption of the same technology takes hold.
Do our data analytics deliver detailed business office insights? Decision makers should assess their current technology’s ability to quickly identify the root cause of denials, cash slowdowns, declining employee productivity, and any potential compliance or quality concerns. Relying on delayed claims data is no longer a best practice in healthcare revenue cycle and jeopardizes financial sustainability.
Can we keep up with payers? According to the HFMA report cited above, 82 percent of CFOs stated payer denials have increased since 2019. This finding correlates with anecdotal information we hear from revenue cycle leaders nationwide. Leaders must be able to continually monitor payer activity to understand payer changes, the likelihood of denials and underlying root causes of payment deceleration.
Hospital business offices nationwide increasingly have indicated that billing and collections are top areas of focus for improving cash flow and revenue capture. A lot is just baked into current systems and processes – for example, in many cases, patient collections require more than a month of processing time for healthcare providers.
Lessons learned from the field
To improve billing and collections in the year ahead, our business office experts suggest these four strategies.
- • Technology is advancing, and modern business office operations need to use the latest intelligent tools.
- • Staff education remains the essential foundation for efficiency and effectiveness, regardless of the technology platform. It's critical to consistently train teams on new payer changes and new billing rules.
- • Upskill and reskill your workforce to prepare them for nascent technologies such as RPA, machine learning and AI. Bridging the gap between people and technology is imperative for improved efficiency.
- • Stay close to your revenue cycle data. Strong data analytics improve financial resilience, offering a clear, evidence-based window into cashflow. Analytics also can reveal important insights into payer reimbursements, guidelines and trends, while analyzing reimbursement rates, payment accuracy, and adherence to contract terms and payer policies.
Building better business office performance
Billing and collections are core components of high-performing revenue cycle. Whether or not an organization is considering a complete business office solution, these considerations and strategies are valuable to design a cost-effective and successful billing and collection team.
Organizations that decide to enter a complete business office relationship should look for companies with a proven track record in increasing cash collections and reducing accounts receivable days; combining expertly trained billing specialists, best practice billing and collection processes; and utilizing advanced technology tools to improve revenue cycle efficiency and deliver results. Potential CBO partners should also be able to provide rapid implementation times to make a difference while understanding your organization’s current systems and data.
Finally, throughout any type of business office transition, leaders should take a people-first approach to staffing, ensuring employees are well-versed in new technology and have the proper training to efficiently use new solutions.
Wes Cronkite, MBA, FACHDM, is chief innovation and technology officer for TruBridge.