Now is NOT the time to settle Under Performing Vendors Have No Place in a Challenaged Hopsital Space
Now is NOT the time to settle
Underperforming Vendors Have No Place in a Challenged Hospital Space
In a recent article in RevCycle Intelligence, Brian Sanderson, Managing Principal of Crowe Healthcare Services, reveals some eye-opening statistics around insourced versus outsourced revenue cycle processes.1 Based on the company’s analysis of over 1,000 hospitals in more than 40 states, hospitals often fare better by insourcing. For example, while vendors did return a slightly higher rate of patient responsibility collections than hospitals did on their own, it took those vendors more than a month longer. The scenario for claim denials was even more significant as vendor denial rates were actually higher than those of hospitals. The article explains that this is significant as even a 1% increase in denials can add up to multimillions in revenue that require additional work to collect.
The results of Crowe’s analysis aligns with our research showing a full 64% of hospitals are dissatisfied with, or unsure about their vendor’s performance. Considering the $30 billion annual spend on revenue cycle vendors – a number that is expected to grow exponentially in the next few years – hospitals cannot afford to settle for poor vendor performance.
Outsourcing is Not for Everyone
According to Sanderson, “The decision to outsource any core function is complex, with considerations of access to talent, scalable technology and focused expertise – but performance should always be the key driver.” For those that do decide outsourcing is the way to go, Sanderson recommends the driving principle should be “precise, transparent measurement of performance (sometimes validated by third parties), financial benefit, and progress toward organizational goals.”
Leveraging Technology to Ensure Vendor Effectiveness
Hospitals lacking the ability to audit and monitor their vendors’ performance are flying in the dark when it comes to evaluating a return on investment. A recent analysis of our own account data found more than 21% of accounts placed with outsourcers are aged beyond 120 days are adequately worked. This is unacceptable. To mitigate this risk, hospitals need access to comprehensive analytics that enable full transparency into vendor processes and problematic trends. The right technology can deliver this level of intelligence down to the account level and across all data – not just a subset – to gain more actionable insights.
Technology can also reduce the extensive issue of vendor non-compliance, which our analysis places at more than 50% nation-wide for early-out self-pay accounts placed with vendors. “No activity” accounts are particularly troublesome, but the correct technology can drill down to the guarantor level and flag accounts not being worked so they can be called.
You Don’t Need to Settle
As our healthcare ecosystem becomes increasingly complex, hospitals face expanding strain on their bottom line. The value vendors bring can significantly mitigate these expanding pressures. Achieving the highest level vendor performance requires sophisticated technology that delivers full transparency into vendor processes, along with tools that make it easier for patients to pay. Partnering with a company like Healthfuse gives hospital the insight they need to better manage their outsourcers and to get a full return on those relationships.