Identify and Evaluate Opportunities

Your organization can prevent revenue leakage by implementing a few best practices that ensure accuracy and efficiency and promote optimization. Addressing points of leakage will enable your organization to increase revenue while maintaining quality patient-provider relationships.

Consider your organization’s practices and determine what processes could be optimized to promote more efficiency. A few areas to evaluate include:

• Patient scheduling and registration: How do patients schedule appointments? Do they need to fill out paperwork or an electronic form when registering? Where do data entry inaccuracies occur?
• Recording of medical supplies, procedures and equipment used: Who records information during a patient’s visit? How are procedures documented? Are responsibilities established among staff members?
• Insurance verification: When does verification take place? Who handles insurance? Where do errors happen in the process?
• Claims management: Who is responsible for follow-up when claims are denied? Who is responsible for issuing claim submissions? What is the current timeline for claim processes?

Some solutions may be as simple as cleaning up common clerical errors, while others may be more complex, such as implementing digital transformation and integration. Reviewing your processes will reveal opportunities for improvement, expose inaccuracy or inefficiency and enable your team to resolve problems and create a smoother revenue cycle.

Ensure Accuracy

Revenue leakage often occurs from issues at the beginning of the revenue cycle when patients first register or schedule an appointment. Ensuring accuracy in the information collection process will drastically improve how practices capture revenue, enabling them to create claims with correct patient information.

One way to ensure accuracy is to utilize electronic capabilities. Requiring patients to register or schedule appointments online will decrease data entry errors from paperwork. Electronic referrals will help your practice keep track of potential patients and encourage them to schedule.

Verify Insurance

Checking insurance eligibility and approval is another way to prevent revenue leakage by ensuring your services will be covered. Maintaining accurate insurance information will enable your practice to submit claims with precise data.

Establish correct insurance information by reviewing it with patients at the beginning of their appointment. Update any changes to insurance carriers, coverage or contact information. Adjusting any changes will be easier to complete before the visit rather than tracking down patients after they leave.

Set Financial Responsibility Expectations

Keeping patients informed of their responsibilities will improve your revenue cycle and increase patient satisfaction. Providing estimated costs to patients before their appointment will keep patients informed and prepared to complete their payments.

Collect copays and coinsurance during check-in or after an appointment to ensure accurate and timely payments and decreased revenue leakage.

Organize Claim Management

Commitment to timely claim submission and appeals will enable your practice to improve your revenue cycle. Accurate patient data will decrease the number of claims denials you receive, and a dedicated management team will be able to appeal denied claims quickly and efficiently. Taking the time to evaluate, revise and resubmit denied claims will greatly decrease revenue leakage.

Simplify Payment Processes

Creating an easy payment process for your patients will improve revenue and boost patient satisfaction. Make bill pay convenient by offering an online payment option or a payment plan to give patients the flexibility to meet their bills.

Prevent Revenue Leakage With Help From Pathstone Partners

Revenue management and leakage prevention can be complex, but you can find understanding and empowerment when you work with Pathstone Partners. Our consultants will help you tackle financial and operational processes to identify opportunities, implement solutions and sustain beneficial practices for the success of your healthcare practice.

Our variety of services will enable your organization to manage revenue cycles easily, provide quality patient care, exceed business goals and ensure success. Contact us today to learn how Pathstone Partners can drive value for your healthcare practice.

What Is Revenue Leakage in Healthcare?

Revenue leakage happens when a healthcare practice gives care but does not receive payment for the services it provided. Leakage can occur in a few ways, such as forgotten accounts receivable or missed appeals deadlines for denied claims. It impacts the revenue cycle, preventing businesses from becoming financially viable.

Revenue leakage often goes unnoticed, but its impact can be detrimental to healthcare practices seeking to grow their business and maintain a high standard of care for their patients. The longer providers take to address points of leakage, the less likely they will be to receive any reimbursement for their services.

What Is the Impact of Revenue Leakage?

Healthcare providers must keep up with expenses to secure customer satisfaction and keep their practice in business. Revenue leakage can lead to lower earnings, putting providers at a disadvantage to their competitors.

A lack of revenue will significantly impact a healthcare facility’s ability to maintain several aspects of its organization, including:

• Staff: Healthcare practices require proper resources to maintain a team with all the talents necessary to meet patient needs, ensure smooth processes and promote detailed organization. Revenue leakage can make hiring and retaining a highly skilled workforce challenging.
• Quality care: If a provider is experiencing revenue leakage, they may add more services to compensate for the missing revenue. Extra services may decrease a provider’s ability to maintain high-quality care by increasing the likelihood of burnout.
• Growth: Steady revenue enables organizations to grow their services and meet the needs of an expanding community. Healthcare practices that experience inconsistent income due to leakage may need help to keep up with growth demands.
• Innovation: Cash flow powers innovation, helping providers maintain a competitive edge. A decrease in revenue will prevent businesses from matching a competitor’s offer, leading to a decline in patients.
• Business goals: Revenue leakage can inhibit healthcare providers’ ability to meet business goals and objectives. Proper funding is necessary to achieve high standards and goals that drive the business forward.

What Are the Top Causes of Revenue Leakage in Healthcare?

Many forms of leakage are accidental and easy to correct, but they first must be identified. Revenue leakage can come from numerous sources, from issues with a provider’s processes to how patients or payors handle payments.

Some common causes of revenue leakage include:

• Inaccurate information: Insufficient or incorrect registration data may result in a denied claim or errors in billing. Any changes in a patient’s personal information may also lead to revenue leakage.
• Unverified insurance coverage: Without a proper review of insurance eligibility or approval, procedures and services may be given without adequate coverage. Inconsistencies with insurance coverage may also come from errors in payor-provider agreements, halting the revenue cycle.
• Pricing issues: Inadequate pricing may lead to missed revenue opportunities. Prices set too low may undermine services for what they are worth, while prices set too high may drive patients to seek care elsewhere.
• Unpaid accounts receivable: Sometimes outstanding bills remain unpaid for too long, going unnoticed or becoming lost. The longer an accounts receivable goes unpaid, the less likely providers are to recover any reimbursement.
• Claims denials and underpayments: Inaccurate information can lead to claim denials and underpayments, slowing the revenue cycle for a healthcare provider. Any delay in addressing these issues with insurance companies can lead to missed appeals deadlines and less revenue for services already given.
• Unbilled claims: Without a dedicated team to manage claims, practices may experience a variety of problems leading to revenue leakage. Claims require accuracy and consistent follow up ensure all claims are correctly billed.
• Scheduling issues: Revenue leakage can also result from missed opportunities to receive revenue. These instances include referred patients who have yet to make an appointment or gaps in scheduling that could have been filled to maximize available time and resources.
• Lost patients: Previous patients who seek another provider for care instead of returning are another form of revenue leakage. Healthcare providers miss out on revenue opportunities when patients feel their needs will be met better elsewhere.
• Billing errors: Manual input of data may lead to various types of billing errors, decreasing the amount of revenue providers could and should be receiving. Accidental discounts or other inaccuracies in billing will halt the revenue cycle.
• Unaccounted costs: Administrative costs can sometimes be miscalculated, resulting in underpayment from patients or payors. Incomplete logs of materials and equipment used during treatment or medical procedures performed may also lead to inaccuracies in how much patients or payors are charged.

These forms of leakage are common and usually unintentional, making it challenging to track and manage potential revenue opportunities. Healthcare practices need to ensure careful follow-up to protect vital revenue streams and prevent any leakage.

Revenue management is essential in the healthcare industry. Consistent cash flow enables providers to establish themselves as trustworthy professionals that provide the high-quality care patients seek. Revenue also allows organizations to experience growth and innovation that helps them keep up with competitors and maintain a talented workforce.

Healthcare practices need to ensure they have the funds to support their services and maintain patient satisfaction. Providers have a thin margin of error to work with, making revenue leakage an essential situation to address and resolve if healthcare practices wish to enjoy the benefits of consistent revenue.

Collecting and Organize Data

There is a wealth of information available that healthcare organizations can leverage to streamline efficiency and revolutionize patient care — thanks to an abundance of raw data. The key is to collect and organize this data into an easy-to-interpret format and leverage it to improve current processes and procedures.

In particular, studying healthcare data analytics helps facilities identify where they can cut costs to improve their bottom lines. Keep reading to learn more about the positive financial impact of implementing and studying data analytics in your healthcare organization.

What Is Data Analytics in Healthcare?

Data analytics in healthcare is the act of compiling, categorizing and interpreting previously disorganized data to learn from and use it to optimize a healthcare organization’s operations and services. In short, it’s studying data-derived insights to improve operational efficiency and patient care. The most notable uses of data analytics in healthcare include:

• Forecasting real-time trends.
• Automating processes and procedures.
• Making data accessible and easier to understand.
• Revolutionizing patient care.
• Driving healthcare innovation.
• Advancing medical research.

Studying data-derived intelligence is helpful for every aspect of running a patient-centered, profitable healthcare facility. For example, healthcare practitioners can use data to spot trends that could cause re-admissions or assist in disease prevention. Plus, analyzing data could surge a facility’s bottom line by streamlining its operational efforts, like anticipating supply or staffing needs.

The Different Types of Healthcare Data Analytics

To study data, healthcare organizations first need special software to collect it and systems to compile it into easy-to-digest information. It’s also helpful to understand the different kinds of data analytics. Depending on an organization’s goals or pain points, one type of data analytics might be more beneficial to gather and study than another.

There are four main types of healthcare data analytics organizations can leverage:

• Descriptive: Descriptive analytics is historical data that organizations can analyze to decipher whether their current systems and practices are efficient.
• Predictive: Predictive analytics uses forecasting techniques like predictive modeling to make educated guesses about what might happen.
• Diagnostic: Diagnostic analytics aims to diagnose what happened and why — or the factors contributing to particular outcomes —  using historical data.
• Prescriptive: Prescriptive analytics leverages machine learning and historical data to make predictions helpful for introducing optimal practices.

Ways Data Analytics Can Reduce Healthcare Costs

There are several ways utilizing data analytics improves patient care and boosts an organization’s bottom line. Keep reading to learn how data analytics reduces healthcare costs.

Accessible Medical Records

Going paperless with digital medical records or Electronic Healthcare Records (EHR) boasts significant cost savings for healthcare facilities. EHRs are also superb for collecting real-time clinical, administrative and diagnostic information healthcare professionals can use to anticipate a patient’s needs and further personalize their care.

For example, EHRs can prompt practitioners and administrative staff to schedule reminders and medication orders or note patient preferences and trigger warnings, thus improving the patient experience. Plus, an EHR helps streamline time-consuming clerical tasks, like data access and entry. It has the potential to reduce errors and make information accessible from multiple facilities.

Smooth, Efficient Supply Chains

Supply chain breakdowns result in lost time and revenue, but they also affect patient care. Organizations can use data analytics to assess and anticipate their supply needs. Doing so optimizes inventory management for a smoother and better patient experience.

For example, data analytics highlights trends like shipment delays and order-to-delivery time frames. Analyzing supply chain disruptions or issues reduces the likelihood of overspending and streamlines inventory management, resulting in smarter spending and prompt care.

Enhanced Security

Unfortunately, data breaches and fraud claims are all too common in healthcare. Cybercriminals are known to target healthcare organizations for sensitive information. Cyberattacks were especially prevalent during the COVID-19 pandemic when healthcare professionals felt overwhelmed and burnt out.

The effects of data breaches are exceptionally costly for hospitals and other healthcare practices. To tackle cyberattacks and data breaches head-on, healthcare facilities can study data analytics to analyze the status quo and identify unexpected changes. For example, pinpointing suspicious events like surges in network traffic might indicate fraudulent activity.

Staffing Needs

An understaffed healthcare facility affects professionals and their patients. Thus, it’s crucial that an organization can anticipate staffing needs — especially during seasons when staffing might naturally fluctuate, like the holidays or flu season.

However, it’s tricky to distinguish between overstaffing and understaffing. Overstaffing leads to overspending and understaffing negatively impacts patient care. Studying historical staffing data and seeing how the seasons and other commonplace events affect it helps organizations hire and schedule the appropriate number of staff members during times of critical need.

Learn to Use Healthcare Data Analytics to Improve Your Facility

Are you ready to use healthcare data analytics to improve your organization but don’t know where to begin? Consult our experts at Pathstone Partners! We’re a leading healthcare management consulting firm that collaborates with healthcare facilities to improve their financial and operational efficiency.

It’s our ultimate mission to empower practitioners to provide the best patient experience possible. Contact us today to learn more about how data analytics can transform the way you run your healthcare organization and provide patient care.

Cost Reduction Initiatives

Cutting costs can be tricky, especially when patient health is on the line. Targeting spending less in larger areas like staff, supplies and equipment seems simple. However, these are essential to keeping the hospital running efficiently and delivering a positive patient experience.

Instead, consider the following initiatives as alternative ways to create a successful cost-reduction strategy.

Optimize Revenue Cycle

A healthcare revenue cycle helps organizations stay financially healthy as they provide services for treating patients. Some factors can enhance the revenue cycle and help avoid debt collection. These include:

• Patient education: Patients should continually be educated on the costs of care, especially early in the treatment. Financially clearing patients early and consistently can help them be prepared and not confused when bills arrive in the mail.
• Electronic medical billing: Provide online payment opportunities for patients to conveniently and quickly pay their bills.
• Data analytics: As we mentioned before, data analytics are important in maintaining costs. With this concept, you can get a clearer picture by analyzing your revenue cycle trends.
• Process updates: Continue to revisit your daily operations to ensure all pieces work smoothly. You can address any issues at the root and adjust strategies where needed to avoid large costs or debt for later maintenance.

Improve Supply Chain

The post-COVID supply chain has greatly improved through enhanced communication opportunities between the medical staff and management. Doctors relaying helpful information on certain products and treatments to management can improve the inventory of adequate medical supplies.

Additionally, regularly evaluate your suppliers. Are they providing quality products at a reasonable price? From here, identify what goods are being transported along the supply chain, including how much of the product is being delivered vs. how much you use between shipments. Knowing what and how much you use can help avoid wasting equipment.

Optimize Information and Digital Technology

Technology continues to advance, and healthcare organizations are beginning to use that to their advantage. Hospitals can utilize technology to create efficiency and cut costs by doing the following:

• Automate administrative tasks: Doctors spending hours on monotonous administrative tasks can take up more than just time. Technology can make these tasks more cost-effective by automatically importing test results into a patient file, scheduling appointments and providing prescription information to patients.
• Improve workflow and operations: Technology automation can reduce the risk of human error, saving the hospital from negligence claims. Implementing telehealth can also improve a clinician’s productivity through e-prescription refills and e-visits, allowing the clinician to see more patients.
• Rethink human resource expenses: Digital applications can analyze labor demands, identify open beds and check equipment status to allow clinicians to focus on patient outcomes.
• Process digital claims: An automated digital claim processor can assist patients with billing, improving turnaround time and reducing fraudulent claims.

Optimize Labor and Streamline Management Structures

Labor expenses are expensive for hospitals, so discovering where to cut costs in this realm could be very beneficial. You can start by looking over your current medical staffing schedule and administrative positions.

In short, it is about optimizing the right labor in the right departments. Every unit should have a list of necessary tasks and noticeable credentials that need to be fulfilled in each. For example, if nurses are responsible for food delivery in a particular unit, consider hiring a less expensive food tech to pass out trays. Doing so can reduce five nurses to four by eliminating a task from their list that can be handled by another employee.

You can also recognize trends in your organization and adjust the staff. Are there seasons or certain circumstances where patient counts are likely to increase? This process may take some time in the beginning, but it could save you quite a bit of money in the end.

Additionally, for every doctor, there are 16 healthcare workers — and only six are involved in patient care. The other 10 are administrative roles.

Now, these labor and management structures can be simplified. Technology can help streamline a patient’s care and reduce administrative costs but sometimes only leads to workload reduction. Technology in healthcare should streamline these processes instead of creating additional work.

Each administrative position should have a specific role that works for the good of the whole. Let the mundane tasks be taken over by technology, such as scheduling appointments, billing patients, managing patient communications and collecting payments.

Improve Patient Throughput

Now, take a look at your patient flow. Are things moving efficiently? Identifying ways your patient flow can improve is another area of strategic cost reduction.

Consider the following to improve your patient throughput:

• Enhance collaboration between caregivers across units.
• Improve communication between a caregiver and patient.
• Continuously monitor the patient and make good notes.
• Allow caregivers to spend more time with patients.

Every patient should be seen with the same careful attention in a timely manner. Doing so will improve the patient experience and decrease bottlenecks, reducing delays and ensuring the maximum occupancy for each hospital bed.

Optimize Utilization

Utilization in healthcare defines the usage of products or services within a certain hospital. This is another area where data analytics can be beneficial, as they can accurately assess current operations. Understanding what your hospital uses can help you avoid overtreatment and lower costs while increasing trust.

You can also optimize utilization by encouraging employee feedback. For example, when looking at the data, get a second opinion from employees before deciding what areas are unnecessary. A well-planned feedback system maintains consistent data to take action with, even when you aren’t in a crunch. This system can help your organization stay on top of cutting overall costs.

Introduce a Hospital Asset Management Plan

Hospitals spend a lot on fixed assets, including physical infrastructures like heating, air conditioning, ventilation, plumbing and generators. These assets also include healthcare-specific items like wheelchairs and beds. Instead of reducing the use of these needed items, aim to protect them through a hospital asset management plan.

A hospital asset management plan can help maintain a safe and clean environment in the most cost-effective way possible. Some ways to do this are by tracking your hospital’s most critical equipment, ensuring safety requirements are met and supporting a preventive maintenance approach.

Get the Results You Deserve With Pathstone Partners

At Pathstone Partners, we are committed to providing your company with the right plan to reduce costs. Our healthcare consultants can help you identify, implement and sustain a cost-reduction plan that fits your organization’s exact needs. Contact us today to get started.

Cost Challenges Facing Healthcare Organizations

Hospitals used to be reimbursed at a line-item level, where a charge was only issued with each item used or service provided. That bill was then sent to the patient or insurer, incentivizing procedures and tests.

Now, hospitals are given a certain amount for each diagnosis-related group (DRG). The hospital must then figure out how to best spend that fee while keeping the patient’s overall health status as the priority. Below are three of the most significant risks involved with delaying these strategies.

Lack of Resources or Bandwidth for Strategy Management

When we think of healthcare resources, we paint a picture of physical supplies like gloves, medications or medical kits. As you can imagine, a lack of these resources for healthcare settings can affect the quality of patient care and the work environment for providers. For these reasons, increasing the supply of resources is one of the first places organizations invest extra funds, delaying any plan or initiative.

However, consider extending the needed resources for hospitals to include general knowledge about strategic management — or bandwidth. For the success of cost-reducing plans, teams must have the capacity, energy and motivation to deal with the situation. Understanding your goals and knowing how to implement a strategy can help your organization manage cost reduction.

Decision-Making Process Complexity and Length

Making the final decisions for these strategies can be lengthy and full of multiple levels. Because of this complex process, implementing strategies can be seen as more of a hassle than a help. People and organizations have often pushed a cost-reduction strategy to the wayside because of the many factors involved, including maintaining employee and patient safety.

However, don’t let the lengthy process scare you away from making necessary changes for the betterment of your healthcare organization. Taking the required steps can change this daunting task into a helpful resource to utilize for years to come.

Poor or Inadequate Data for Initiative Support

Data analytics in healthcare are important for categorizing data to use it toward the organization’s operations and services. Poor data organization can add to your costs.

Insufficient data can interfere with patient medical records, increasing potential errors and hindering the patient experience. It may even impact your organization’s security, and data breaches are exceptionally costly.

Take control of your data to best help with the decision-making process. This way, you can pinpoint precisely where cost reductions are needed based on recent data, making initiative support much more efficient.

Take Action

Any organization has several challenges that threaten the success of reducing costs. Overcoming these challenges is vital to ensure we create an environment for patients to heal and thrive. What healthcare organizations decide to implement now can create a sustainable model for the future.

Contact Pathstone Partners today and discover how we can help your margins!