Chapter 6/Conclusion: How Does a Strong Revenue Cycle Management Strategy Improve Operational Efficiency?

A good RCM strategy can improve your operational efficiency tenfold. By streamlining your front-end processes, enhancing coding, implementing RCM software and automating various tasks, you can improve your efficiency and overall financial health.

In this chapter, we’ll discuss how RCM affects efficiency and how to evaluate your performance for revenue cycle management process improvement.

Importance of Operational Efficiency in Healthcare

Operational efficiency is crucial in healthcare, as it can mean the difference between providing life-saving treatment to a patient or delaying their care, leading to the worsening of their condition. Ultimately, the more efficiently your facility operates, the more beds you have available to patients, and the better your patient outcomes. Improved patient outcomes translate to better financial performance, greater employee satisfaction and a stronger competitive standing.

4 Ways Strong Revenue Cycle Management Strategies Affect Operational Efficiency

Specific ways strong revenue cycle management can impact efficiency include:

1. Fewer Errors

RCM strategies focus on improving accuracy throughout the revenue cycle, reducing errors in tasks like billing, coding and payment posting. That way, your team has fewer rejections and discrepancies to deal with, leading to improved operational efficiency.

2. Lower Burnout

With efficient RCM strategies, you alleviate the burden on your administrative staff. Streamlining processes, automating redundant tasks and providing clear guidelines can reduce staff burnout, leading to less stress and better productivity. Over time, this can lead to better retention rates and improved efficiency in your facility.

3. Greater Productivity

Strong RCM strategies optimize workflows and eliminate bottlenecks in revenue cycle processes. Implementing a strong RCM platform can eliminate manual tasks and leverage technology to enhance your productivity. Team members will be better equipped to handle higher volumes of work, accomplishing more within a shorter time frame to improve overall efficiency.

4. Fewer Patient Complaints

Well-executed patient revenue cycle management can lead to more transparent communication with patients regarding their financial responsibilities. When patients have a clear understanding of billing and insurance coverage upfront, it reduces confusion, frustration and disputes. As a result, you can appreciate fewer complaints related to billing, minimizing the time and resources you spend resolving their concerns. 

Evaluating Revenue Cycle Management Performance

Take note of the following metrics to evaluate your revenue cycle management performance:

• Cost to collect: Cost to collect is a key financial management metric, revealing the efficiency and productivity of your revenue cycle processes. To find your cost to collect KPI, divide the total revenue cycle cost on your income statement by the total patient service cash collected.
• Speed to collect: Another important metric is speed to collect. Focusing on a robust patient collection strategy and preventing issues that could lead to claims denials are both linked to faster cash collection.
• First-pass resolution rate: This is the percentage of patient inquiries or complaints resolved on the first contact without the need for follow-up. A higher first-pass resolution rate indicates a more effective, responsive RCM process. 
• Patient access rate: Patient access rate is the percentage of patients able to access the care services they need — without barriers like long wait times, high costs or low availability. A higher patient access rate signifies a more accessible, affordable RCM process. 
• Net collection rate: Determine the net collection rate by finding the percentage of total charges after deducting write-offs and contractual adjustments. A higher net collection rate signifies a more effective RCM process. 
• Days in accounts receivable (DAR): Calculate DAR by dividing the total accounts receivable by your average daily net patient revenue. A lower DAR signifies a more consistent and fast cash flow, while a higher DAR indicates a slower, more erratic cash flow.
• Patient satisfaction score: A higher patient satisfaction score can indicate a better RCM process, building trust and loyalty among patients. 

Achieve Operational Efficiency in Healthcare With Millennia 

You can improve revenue cycle management and efficiency by automating medical billing, implementing technology, prioritizing training and development and enhancing digital patient engagement. Regularly monitor your KPIs and other performance indicators so you can decide where to focus your efforts and achieve better revenue recovery.

It’s crucial to have the right technology and tools for healthcare revenue cycle management. Partner with Millennia for your revenue cycle management solution. Our integrated software solution can help your healthcare facility create more unified patient journeys while boosting efficiency through streamlining insurance verification, billing and more. The Millennia Patient Payment Solution provides the framework to connect with patients from the pre-visit to the final payment.

Schedule a consultation to see how we can help with revenue cycle management process improvement.