Revenue Cycle 2.0 Versus Revenue Cycle 1.X, What’s the Difference?
In technology, we often associate a new process or software version with a major update, and there is a level of backwards incompatibility. Something major has changed, making it truly new and different. Minor updates, denominated by the revision letter behind the decimal, indicate incremental and compatible changes. The same should hold true in revenue cycle versioning.
Most revenue cycles have gone through evolutionary changes over the course of the last decades. What started out as Registration, Coding and the Business Office, has become Patient Access, HIM and PFS. Changes that have been made include the centralization of the old dispersed functions, automating some functions, and improvements to workflows.
None of these however constitute a version change, as most of these changes have retained a focus on the transactional business of the revenue cycle: Get patients registered, make appointments, and get paid for the work being performed. It is a system deeply defined by definitions reached decades ago, using processes and organizational forms that have evolved.
Don’t get me wrong, there is, and should be, tremendous pressure for better transactional performance like minimizing denials, lowering cost to collect, increasing time of service collections and improving collection rates against contracted net revenue. However, we are now entering the era of consumerism and a need to drive patient experience to a new level. This means that the revenue cycle has to move from a cost minimizing function, to supporting the actual generation of revenue by helping to create a positive, memorable and brand supporting experience for patients.
In this new reality, we have to rethink the very purpose of the revenue cycle, and to be an integral part of customer value generation by providing desired services to patients and physicians. It moves from asking the patient for ‘rank, name and serial number’ so we can book an appointment, to engaging with customers at a deep level and becoming a reliable partner in their journey through the highly complex system of healthcare.
We believe that this shift, starting with a redefinition of the purpose of revenue cycle, defines the new version of the revenue cycle. With changing the purpose, and making it a customer value added function, comes the need to rethink delivery beyond centralizing and adding automation. It requires a rethinking of processes and workflows, talent acquisition and management, and service-focused technology.
Of course the big question is, how does one pay for this type of a change in a world of shrinking budgets and increasing cost pressures? The good news is, that the savings we can reap by addressing the transactional cost elements can be used to fund the transition to Revenue Cycle 2.0.
For more information on how this can be done, contact me for a recent case study that outlines the successful implementation of this approach. Mischa.Dick@HEIHealth.com