At the Margins

Our 2017 revenue cycle benchmarks are out. How do you stack up?

by Eric Fontana and Lulis Navarro

Without a doubt, it's a critical time to refocus on the revenue cycle. In the face of growing reimbursement pressures and accelerating costs, finance leaders must elevate revenue cycle performance by both increasing revenue capture and lowering the cost of doing so.

Our 2017 hospital revenue cycle benchmarks, the product of a six-month collaboration with over 350 hospitals and health systems, provide a starting point for gauging your organization's current revenue cycle performance and can help prioritize improvement efforts.

Our analysis of this year's data, along with previous cohorts going back to 2006, also highlights key revenue cycle trends that all finance leaders should be aware of:

1. Denials are up and likely to remain a persistent challenge. Our analysis indicates that, for the median 350-bed hospital, denial write-offs have increased from $3.9 million in 2011 to $7 million in 2017. Hospitals should focus on reducing public and private payer denials—particularly through improved documentation and authorization processes—given that appeals are becoming increasingly difficult.

2. Growing patient obligations threaten recent gains under coverage expansion. While hospitals in Medicaid expansion states are faring better than their non-expansion counterparts on the whole, the rise in unpaid patient obligations under high-deductible health plans (HDHPs) represents an increasing threat to hospital financial performance. Providers with the lowest levels of bad debt in our cohort were unable to drive further reductions across the past two years.

3. Health systems are not achieving economies of scale. Given the recent consolidation in the market, the lack of improvement in cost to collect among survey participants over the past six years is especially troubling. Many health systems are yet to take full advantage of "centralizable" revenue cycle functions and are likely missing opportunities to significantly reduce operational costs while capitalizing on economies of intellect.

 

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Next, get the Blueprint for Revenue Cycle Transformation

This infographic highlights our three-pillared, best practice approach to improve overall revenue cycle performance by enhancing performance visibility, elevating operational efficiencies, and ensuring across the board accountability.

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