Brad Skelton, VP of Business Development
Reduced income from elective procedures. Increasing Loss of health coverage. Precipitous drop in billings. The stuff of a CFO nightmare. Here are seven approaches worth considering for increasing revenues, stemming losses, and easing CFO anxiety.
Most industries experienced the crushing blow of COVID-19, with healthcare topping the list due to many states halting elective procedures—the main driver of hospital profitability. While the majority of states no longer impose restrictions, many people, especially those with comorbid conditions, continue to avoid hospitals and doctors’ offices. They’re choosing tele-visits instead, which to various degrees limits full reimbursement. Add to this reduction in income the more than 5 million Americans who lost their employer-provided health plans, leaving them uninsured and eligible only for emergency treatment.
Seven approaches that can help you compensate for revenue loss.
- Reduce patient anxiety with a personal call. For patients with chronic conditions who need in-person care and lab work to properly avoid complications and those who are past due for diagnostic exams or follow-up visits for a range of conditions, a reassuring phone call could make them feel comfortable to come to the office. Find out their vaccination status, share office safety measures, and educate about how the visit will maintain their health.
- Renegotiate contracts. Reevaluate vendor contracts that were signed prior to the pandemic, since they were negotiated and agreed to based on volume and other considerations that are no longer valid. Vendors are concerned about losing accounts, making this a prime opportunity to renegotiate terms. Health systems that act first obviously have the best chance to reduce costs.
- Scrutinize payer relationships. Like your vendor contracts, payer contracts were agreed to under assumptions of volume, visits, and procedure counts that are no longer relevant. Examine them and share data-driven approaches about the new reality with payers to optimize contracts, revenue.
- Rely on available technology. Supplement full-time workforce (FTE)-heavy functions like IT service desk, Human Resources, and Revenue Cycle with cost-effective technologies such as robotic process automation and predictive modeling. In addition to greater efficiency, technology is scalable and less prone to error, while freeing up human capital for higher-value, more stimulating work that requires judgment and experience.
- View value-based contracts through new low patient volume lens. Explore new models and negotiate favorable revenue-sharing benefits from health plans. A specialized, skilled, third-party advisor can help evaluate opportunities and facilitate the creation and management of new contracts.
- Use data and predictive models to transform entrenched practices. Conventional healthcare practices that impact revenue and cost, such as procedure scheduling and nurse staffing models, are ripe for reform. Think about scheduling surgery with profitability in mind. Replace historical nurse staffing benchmarks and history with predictive modeling to reduce overtime and need for agency nurses to achieve optimal clinical and financial outcomes.
- Evaluate the project pipeline to focus on those with a clear business case. Every expenditure of resources is critical, requiring a strong governance process that prioritizes projects according to the underlying business. Evaluating the project pipeline and measuring each project relative to organizational value can likely free up capital, operational, and FTE expense.
All of the above actions can help your system weather the current storm. Moreover, they will prepare you for new successes when economic conditions improve.