Outsourcing RCM for Higher ROI – A CFO Black Book Survey
According to the latest research from the 2023 Black Book healthcare survey, the healthcare industry is turning towards revenue cycle outsourcing as a means to optimize revenue cycle management (RCM) processes in a rapidly changing healthcare model. With its research focusing on hospital revenue cycle outsourcing and automation technology, Black Book confirms that a fast-paced healthcare environment requires a focus on new solutions. The healthcare industry is under intense pressure to increase ROI revenue cycle management, and RCM outsourcing services have emerged as a powerful solution to these challenges.
In 2023, the healthcare industries are overcoming the impact of the COVID-19 pandemic and the need to adjust to new healthcare models. RCM outsourcing services may be the key to saving the healthcare industry, and according to Black Book’s healthcare yearly survey, high-performing RCM vendors are leading the way.
Black Book healthcare survey results
Black Book Healthcare survey confirms that 17% of surveyed hospitals are synchronizing RCM transition activities via advisors and consultants. As the healthcare industry moves from volume to value, most healthcare providers (78%) failed to select technology vendors, contributing to the upsurge in revenue cycle outsourcing services as a provisional solution.
Additionally, nearly three-quarters of medical group practices (73%) are collaborating with consultants on accountable care reimbursement strategies and are considering a revenue cycle outsourcing approach as the assessment of technology vendors continues. The need for revenue cycle outsourcing services is driven by the healthcare industry’s need to optimize ROI revenue cycle management, reduce costs, and increase efficiency.
Outsourcing RCM and ROI from A CFOs perspective
According to Black Book, the lack of return on investment (ROI) is affecting future focuses. 79% of health organization CFOs claim one upcoming necessity is to eradicate those financial and coding technology vendors not associated with ROI revenue cycle management advantages. Over half of health organization CFOs (54%) confirm that outsourcing RCM management processes will help promote productivity and maintain a strong financial backbone.
The healthcare industry is in need of an RCM system upgrade, and 89% of healthcare providers are aware of this need, according to Black Book Healthcare previous report. The use of both new twenty-first-century technology and antiquated nineteenth-century tools (such as the ever-familiar pencil and paper mentality) is collectively being used to record critical data and exceed demanding mandatory standards. This poses complications and is a hindrance to the advancement of medicine.
As the effects of improper RCM management start to affect cash flow, it seems that claims management will be the next area where vendors can find opportunities, followed by eligibility and benefits management. Indeed, a reported 83% of hospitals, 58% of contract management, and 55% of denial management currently outsource some accounts receivable and collections, says Black Book. Revenue cycle outsourcing can help healthcare providers reduce costs, increase efficiency, and optimize revenue cycle management processes, allowing them to focus on delivering high-quality patient care.
Crucial Findings of Black Book healthcare survey for CFOs
Black Book healthcare survey found that 50% of US hospitals that predicted they would replace their core RCM solution had failed to initiate a sustainable RCM plan. However, more than 1,000 hospitals had activated new or renegotiated hospital revenue cycle services. This highlights the need for hospitals to act quickly and effectively in order to keep up with the changing landscape of the healthcare industry.
The survey also found that 40% of hospitals under 200 beds are delaying making an RCM transformation program functional. This is a worrying trend, as smaller hospitals may not have the resources or expertise to manage RCM effectively, leading to financial difficulties and reduced patient care.
Only 10% of hospitals expect their RCM strategy to be selected based on their CIS vendor relationship, whereas a concerning finding is that 58% of hospital CFOs in hospitals with fewer than 100 beds believe their RCM strategy will be chosen solely based on their relationship with their CIS vendor. CFOs in larger facilities. This suggests that smaller hospitals may be prioritizing relationships over actual RCM performance, which could lead to poor financial outcomes.
How CFOs are increasing ROI by outsourcing?
However, the survey did find that CFOs are increasingly recognizing the importance of hospital revenue cycle outsourcing. 80% of Hospital CFOs considered RCM outsourcing services to be the best stop-gap measure until new RCM software is afforded and installed. More than two-thirds sought new RCM outsourcing services agreements extending at least 18-36 months. This shows that outsourcing is increasingly being seen as a viable solution to RCM challenges.
Actually, until coding and value-based payment models are better established, 72% of hospital CFOs for hospitals with less than 200 beds believe that end-to-end RCM outsourcing is the most effective solution. Similarly, 58% of Hospital CFOs in large hospitals and academic medical centers with over 200 beds see outsourcing at least two revenue cycle management functions.
Finally, the survey found that hospitals are increasingly considering a combination of automation (RPA) and outsourcing services to improve their RCM operations. 73% of hospitals under 200 beds are considering this approach, while 93% of hospitals with more than 200 beds anticipate supplementing their existing RCM software with outsourcing services in Q1 2023, as the coding repercussions begin to affect their cash flows and more value-based reimbursement opportunities are presented.
One final thought
Black Book’s survey highlights the need for hospitals to act quickly and effectively in order to keep up with the changing landscape of the healthcare industry. Outsourcing is increasingly being seen as a viable solution to RCM challenges, and hospitals of all sizes are considering this approach in order to improve their financial outcomes. As the healthcare industry continues to evolve in 2023 and beyond, it is clear that hospitals will need to adapt quickly in order to thrive.
In conclusion, the healthcare industry is facing unprecedented challenges, and outsourcing may be the key to saving it. With the need to optimize revenue cycle management processes, reduce costs, and increase efficiency, outsourcing RCM management processes has emerged as a powerful solution to the challenges of a rapidly changing healthcare model. In 2023, healthcare providers must focus on new solutions, including outsourcing, to maintain a strong financial backbone and deliver high-quality patient care.