“A small leak can sink a big ship.”
The complexities in the healthcare ecosystem, thanks to flexible payer rules, changing regulations, and escalating operational costs, are making healthcare revenue leaking a moving target. While healthcare organizations grapple with the challenges of a fluid landscape, the squeeze on already shrinking margins continues to tighten. In environments driven by complex IT systems and disparate teams and functions, the room for errors only increases.
Healthcare payers thus have to identify the sources that lead to revenue leakage to stay viable and profitable in an environment riddled with stiff competition. But where do these revenue leakages happen? Here are five of the usual suspects.
Timely bookings of payments and revenue
- Healthcare providers are grappling with the challenges of managing the multiple facets of payments and revenue generation, especially as we move away from traditional business models and move towards flexible, consumption-based ones.
- Along with this complexity, they also have to account for collections, tax management, consumption metering, invoice management, revenue recognition, etc. Navigating the challenges that come with consolidated billing is another hurdle to cross.
- Enabling accurate and timely bookings of all revenues and payments in a General Ledger (GL) becomes essential as the landscape gets more complex. Doing this manually or having disparate systems managing the same impedes the organization’s ability to identify and cap revenue leakages that can happen due to manual errors or slippages.
- Having a revenue management system that enables accurate and timely booking of revenue and payments to the GL can alleviate this problem and plug revenue leakage that happens from time-consuming disparate and manual processes and serve as a single source of truth.
High operational costs
- High operational costs emerging from inefficient processes and legacy systems can lead to revenue drain. Inefficient backend processes, for example, can lead to billing errors, incorrect invoicing, and consequently low customer satisfaction. The time and resource wastage also cannot be ignored here.
- Healthcare providers can look towards revenue management systems that enable them to reduce operational expenses by leveraging automation and self-service. Activities such as billing inquiries, back-office activity, field audits, and bill adjustments can be automated with ease to reduce the time and effort spent in these activities. The room for human error is also reduced greatly with automation.
- Backend operational costs can also be curtailed by offering self-service options to the customers. Self-service helps these organizations reduce back-office activity, manage bill inquiries, field audits, and bill adjustments more comprehensively without additional effort.
Timely and accurate billing is a challenge
- Healthcare companies also have to move away from traditional billing models and enable flexible billing systems to increase their agility and thereby remain competitive. Ensuring timely billing is essential for timely payments.
- owever, managing billing in today’s environment can be a Herculean task, when information is spread across different teams and disparate systems.
Consolidating billing can become a huge challenge and can also become error-prone in the absence of automation. - Healthcare companies need the capability to present a single bill with all information comprehensively aggregated into a single account. They also have to address the challenges of processing high-volume group bills and list bills with utmost precision. The inability to do so leads to revenue leakage owing to manual errors.
- Having a robust revenue management system that leverages automation and integration and employs workflow-driven rules assists the billing process and helps it become error-free and timely. capabilities.
Challenges in payment reconciliation
- Healthcare organizations have to assess their ability to collect and accurately apply for payments according to their scheduled timelines. The inability to do so also impacts the organization’s revenue, and, ultimately, profitability.
- Difficulties in payment reconciliations usually happen when these organizations are unable to manage flexible payment schedules for different customers and different products. For example, the organization might have implemented quarterly payments for dental, or monthly for health. In the absence of a consolidated revenue management system, managing the nuances for payment reconciliation becomes difficult. Additionally, manual processes increase the inefficiencies of the system – a payment might come in but might need a lot of manual processing. This also ultimately leads to revenue leakage owing to the difficulties in managing payment reconciliation.
- Inability to create new product offerings and increase sales opportunities.
- Plagued by changing market dynamics and rising customer demands, healthcare organizations have to increase their agility and create new product offerings. They also need data-backed insights to increase market opportunities to power sales and create differentiated value. The lack of deep insights into product performance can impede organizational capability to customize personalized plans and address the needs of the customer and lead to a revenue impact.
- Keeping the market dynamics in mind, healthcare companies also have to increase their agility to adapt their systems to new products as well as to new and emerging market segments. A lack of configurable business rules adds to the billing challenge and impedes the ability of the companies to respond to market needs and allow new products and processes to be added without significant IT expenses.
- This leads most organizations to adopt a ‘one size fits all’ policy, something that does not resonate with the customer base in this age of hyper-personalization. It also often leads to missed opportunities, leading to revenue leakage.
- A robust billing management system that employs built-in business intelligence powered by AI (Artificial Intelligence) increases organizational capabilities to improve and create product offerings for their client demographic. Analytical insights into operational performance assist healthcare organizations in gaining insights into billing performance, which can be leveraged to enable better decision-making. It also assists organizations to uncover new market opportunities. Such revenue management systems provide a 360-degree view of the customer to help them hone their product offerings and improve product assortments by understanding the customer experience and customer pain points.
- It is clear that a robust and scalable billing and revenue management platform addresses all of these concerns that lead to revenue leakage and the consequent negative impact on the bottom line. Employing a rules-based system for billing, pricing, payment, and collections that increases revenue opportunities, reduces and controls costs, provides transparency, and improves customer service are imperatives to stay ahead of the curve.
- Connect with us to see how you can improve your revenue management capabilities.
