Monthly Archives: October 2017

Healthcare Revenue Cycle Outsourcing

Historically, the drivers of change in healthcare have been focused on clinical advancements. Applying innovative strategies in healthcare finance and revenue cycle management have lagged significantly behind clinical progressiveness.

Unlike corporate America’s general financial sectors like credit card processing and accounts receivable collections, healthcare finance and business office operations have been slower to adopt the cost-effective improvements offered by the outsourcing of billing and collection accounts.

Recently, due to economic factors and the shifting of patient financial responsibility, healthcare executives have become more accepting of revenue cycle outsourcing initiatives. In spite of a looming paradox, which pits opposing goals against each other, maintaining fiscal health versus the political pressure of keeping jobs in the local community offers a continual balancing act for healthcare executives.

Gartner Research Inc. estimates healthcare executives spend about twenty percent of their budget on all categories of external sourcing options, compared to the general mainstream industries, which typically invest about a third of their budget on external sourcing.

Gartner also estimates that seventy percent of healthcare organizations who do choose to outsource meet or exceed their cost-savings expectations, and most see an improvement in services as they shift their non-core functions to outside experts.

Healthcare outsourcing in general has begun to see a significant rise in acceptance. During the next five to ten years, it is estimated healthcare will see an increase in the outsourcing of many financial, clinical and business processes.

The American Recovery and Reinvestment Act of 2009 (economic stimulus package for the U.S. economy), healthcare reform, and the Health Information Technology for Economic and Clinical Health Act (HITECH), will create significant opportunities for all outsourcing companies to aid healthcare organizations in meeting the requirements for the new set of regulations and requirements mandated by legislative action.

These industry changes will increase outsourcing demand because healthcare providers cannot efficiently implement these changes on their own and certainly not at the speed they want.

Historically, physicians, hospitals and insurance payers with larger footprints and decentralized organizations were the first to initiate outsourcing partnerships. Smaller organizations typically relied on internal resources or in limited cases, local outsourcers.

This trend is changing. All sized healthcare organizations are jumping on the outsourcing bandwagon and are moving toward leveraging IT, clinical and revenue cycle business processing outsourcing to improve the financial viability of their operations.

The motivators for the shift in strategy for smaller healthcare operations are due in part by the margin pressure they are under and the need to cut costs. The key ancillary benefits to an outsourcing strategy are operational efficiencies, cost reductions and delivering superior patient satisfaction.

Healthcare executives have numerous sourcing strategies from which to choose. Utilizing a US based local, regional or national outsourcing company has been the typical choice for healthcare executives who outsource.

With today’s technology, especially in the services’ sector, it is less important to contract with a local provider than to choose the best-in-class provider regardless where their business operation is located.

In the US, outsourcing, in general, has become a polarizing political issue driven by poor economic times and localized job losses. Even with local and national pressure to curtail outsourcing activities by consumer advocates, the return on investment (ROI) from cost reductions and improvements in quality have influenced healthcare executives to pursue offshore and onshore outsourcers as an alternative to maintaining an internal workforce.

Over the past ten years, the providers who have chosen their outsourcing partner wisely, and partnered with qualified process oriented firms, have experienced reduced operating costs and ultimately, higher patient satisfaction encounters.

Americans value the financial opportunities offered by our free-market economy. In every region of the country, community leaders attempt to support and protect local labor forces, which serve nearby businesses. The goal of this action is to keep jobs in the community and surrounding area.

Unfortunately, with budget cuts and margin pressure becoming greater than it’s ever been, healthcare executives cannot meet the demands of managing various clinical and revenue cycle functions, which typically demand a lower cost, more qualified and educated workforce.

The healthcare executives who have avoided non-localized outsourcing have succumbed to the local pressure of keeping jobs within their community regardless of the impact on the financial performance of the health system.

An interesting paradox exists as those same executives and community influencers do not think twice about purchasing clothes, food products, electronics, cars, toys, furniture, and household goods produced globally.

Bringing Lean Healthcare to Life

Starting Blocks

Without a doubt, Lean is set to make a big impact on the Healthcare sector over the next few years and many Healthcare organisations in both the public and private sector are already exploring how they could apply it to their patient pathways and administrative processes.

Whilst many of the tools of Lean are familiar to the people in the Healthcare sector, particularly aspects of Process Analysis, the real difference that Lean will bring is a change in the way that improvements activities are implemented rather than the use of the tools themselves.

Many people in the Healthcare sector are looking to people with Lean skills gained in manufacturing to help guide them through the maze of implementing Lean, including helping the organisation to prepare for Lean as well as undertake the specific improvement activities, including Value Stream Events, Rapid Improvement Events etc. Running alongside this is the need to develop the internal capacity of organisations to lead improvements themselves, which is achieved by developing internal Lean facilitators (or Change Agents).

However, as we already know, not every problem in Healthcare can be related to a problem encountered in Manufacturing and there are some significant differences in approach required to make for a successful improvement programme for people more familiar with leading Lean improvements in Manufacturing.

In this article we review some of the key differences that we have found in pioneering Lean transformation in Healthcare and share the structure to Lean activities that we have been developing to ensure that the organisations make sustained improvements rather than isolated Lean ‘ram raids’.

Interestingly, our work to date is also providing some useful learning that can be applied in reverse – from Healthcare back into Manufacturing!

The Same, But Different

As we have already said, Lean will make a big difference to Healthcare and will help them achieve their operational and financial targets but it needs to be applied sensitively within organisations that have been ‘pummelled’ by initiatives and legislation and have a not unreasonable cynicism towards ‘this new initiative called Lean’.

Like in many manufacturing businesses first embarking on an improvement journey, Healthcare employees are concerned about Lean being a vehicle to cut jobs. This feeling has not been helped by the recent NHS guide issued about Lean Healthcare which has chosen to use a Chainsaw as their main logo and was referred to by a Service Improvement Lead within an SHA (Strategic Health Authority) as the ‘Slash & Burn’ guide to Healthcare.

Issues such as this, along with the use of manufacturing focused terminology, photos and case studies when working with employees in Healthcare, has the effect of building up internal resistance and leads to comments such as “My patients are not cars” made by a Renal Consultant we encountered recently.

Additional differences can be seen in the attitude towards risk in Healthcare. In Manufacturing, if you make a mistake with Lean you may increase the risk of accidents but it is more likely it will just reduce productivity or profits. In Healthcare, similar mistakes can impact on Patient Safety (including increasing Morbidity or even Mortality) and can attract significant media attention.

Making this scenario even more complex is the fact that the ‘care pathways’ that patients experience often interact and overlap in a way that Manufacturing value streams do not, with patients switching between pathways and specialities dependent on their specific needs and treatment plans.

Management of these processes and pathways is complicated by the need to balance clinical concerns (such as patient safety and medical best practice) with ‘business’ concerns (availability of resources and finance), and the often uneasy balance that has to be struck between senior clinicians and organisational managers on these issues.

Whilst this sort of complexity is not alien to manufacturing, where there is a constant need to balance cashflow against sales (for example), the fact that this balancing and the resulting management of risk in Healthcare is so prevalent leads to a very different style of management – being more consultative and inclusive than Manufacturing, which slows decision making and involves a lot more analysis than many Manufacturing decisions, and the need to prove things first to sceptical clinicians.

This constant need for balance between clinical and operational concerns leads to one of the biggest differences we encounter, namely the difficulty in engaging the right people for the right amount time to make the improvements sustainable. This is not a new problem in Healthcare with many improvement initiatives having fallen foul of changing priorities, the allocation of insufficient people to an improvement process or simply having failed to move from discussion into action quickly enough.

More Responsible Approach To Healthcare Reform

Signed into law on March 23, 2010, the Affordable Care Act (better known as Obamacare) was a large step towards a needed reform in healthcare. However, it was a large step in the wrong direction.

Democrats and President Barack Obama resorted to a flawed system of government-subsidized healthcare accompanied by a mandate (now regarded as a tax) forcing every American to purchase healthcare if they are not offered coverage by their employer.

Critics have highlighted many issues and possible problems with Obamacare ranging from underfunded “high-risk pools” to a growing government deficit due to a lack of revenue to provide for those who will be receiving healthcare for very cheap prices. Surrounding the law are several myths that Barack Obama and his allies in Congress like to parade around Capitol Hill and through the media.

Republicans and Democrats agree that the American healthcare system is not perfect. It is flawed, and there are many Americans who are not receiving coverage simply because they cannot afford it. However, despite these worries, Barack Obama’s healthcare law is not the solution to an ever-growing problem. In fact, the Affordable Care Act could likely cause many more issues separate from the issue of how many Americans are covered by health insurance.

It is for these reasons that I bring forth a new idea for healthcare reform. I feel that this plan is one that both parties can rally behind because of its simplicity and ease of institution. The Affordable Care Act was highly criticized because the Speaker of the House herself did not even know what exactly was in the law. Nancy Pelosi admitted this when she uttered her now famous phrase, “We will just have to pass it to see what is in it.” If a law is so complex and large that those voting on the law do not even entirely understand the principles of it, then it is not a good idea to blindly accept the law so that America can “see what is in it.”

Here is my proposed healthcare reform plan:

Political ideology and world viewpoints aside, economists and politicians generally agree on the fact that the laws of supply and demand and the dynamics of price action are constantly at work in the market. Furthermore, all Americans generally agree that incentives are very strong things. Consider taxes for example. If a business owner will be taxed higher for every dollar that he makes over a certain point, what incentive does he have to work harder in order to earn more money above this tax threshold? If this threshold were not present, then he would be much more inclined to work, therefore, earn more money.

The reason I bring up this tax incentive, or lack thereof, is because of the role that taxable income can play in a smarter route to healthcare reform.

Consider this scenario: A physician runs his own practice in downtown Charlotte. Every day, he treats people that have health insurance; he receives his payment from the insurance company, and he pays his taxes. His costs remain high because of his need to make a profit, therefore stay in business. He must take into account how much of a percentage he will be taxed on the revenue that he is generating.

What if this physician did not have to worry about how much of a percentage the government would take in taxes, however?

In my plan, when a doctor or physician treats someone without health insurance, every cent’s worth of that treatment will be non-taxable income that the doctor has generated. For instance, if Mary, an uninsured single mother, gets treated for an illness at Doctor Smith’s office for $100, Dr. Smith would not have to pay taxes on any of that $100. However, taxes would still be taken out on income generated from payments originating from insurance companies.

Obviously, in this situation, Dr. Smith would not set the same price for Mary that he would for an insured person. In an effort to attract more uninsured patients, Dr. Smith would lower his prices for the uninsured so that he could generate more income that would not be taxed. Dr. Roberts, another physician down the street would see that Dr. Smith has lowered his prices for the uninsured, and he would attempt to undercut his prices to be more attractive. Barack Obama has flaunted the idea of “shopping around” for the most affordable coverage. This plan causes a healthcare market that promoted exactly that.

Think of how gas station owners determine prices. There is a general accepted price for a gallon of gas in each state based on the cost of a barrel of oil, the state taxes on gasoline, and other factors. After determining the accepted price in the state, gas station owners attempt to attract more customers by setting their prices a little lower than their competitors. Why would doctors not do the same provided with an incentive to generate more income for themselves?

Furthermore, this plan has an effect on the already existing insurance companies. To prevent their customers from dropping their healthcare plan and choosing to become uninsured due to lower costs, premiums would decrease. The insurance companies would also want to remain attractive to customers, and the only way of doing this would be to lower the cost of their own healthcare coverage. Premiums would especially decrease if these insurance companies were also extended tax breaks.

I understand that the issue of high-risk patients and those with pre-existing conditions would still need to be met. No matter to what extent doctors lower their costs, those considered “high risk” would likely still not be able to pay for the frequent coverage that they would require. However, my plan does a much better job at addressing the largest portion of Americans who are uninsured.

This plan is far superior to Barack Obama’s Affordable Care Act for several reasons.

First, there is no government healthcare pool that requires an individual mandate to ensure an equal distribution of costs. Let’s be honest, if the government must require that every uninsured American either buy healthcare or pay a tax in order to pay for its own subsidized healthcare, it is highly likely that the plan will crash and burn. Such an approach is just not smart. In my plan, neither the government nor individual citizens are responsible for ensuring that costs are equally distributed. The pure method of implementation is already much simpler.

Second, Obamacare provides no incentive for doctors or physicians. Many have already expressed concern over the healthcare industry and whether this law may negatively affect those that work in the industry. My plan provides an incentive for all in the healthcare field to provide more coverage. If we are seeking to reform healthcare, is it better to incentivize those in the industry or ultimately hurt them through government-subsidized healthcare that cuts into their profits and ability to make their own decisions?

Thirdly, the current Affordable Care Act is a job killer. If a business hires over 50 employees, then it is required to either buy every employee equal healthcare or pay a penalty. Why would any small business seek to hire if they are near this threshold? With this threshold removed, businesses can again feel free to hire new employees.

Career Opportunities in Healthcare Management

A healthcare administration career via online healthcare management training requires no medical background. This is the field relating to the leadership, management and administration of healthcare systems, hospitals and hospital networks. Healthcare administration covers a broad area of activities and there is usually a set of factors that determine the types of jobs that need to be done to run any given facility; these often include the size and scope of the facility in question and the kinds of medical/ healthcare facilities they have.

Healthcare administrators are vital to the successful operation of any healthcare system. The day to day running and financial sides to healthcare require dedicated professionals to work on areas from clerical to administrative to financial. Healthcare professionals, also known as healthcare managers or health services managers are regular business managers who plan, direct, coordinate and supervise the delivery of health services. These managers can be specialists in charge of a specific department or managing entire facilities. Healthcare education has recently found a new home on the internet, with thousands of people pursuing online healthcare education and online training in order to improve their professional skills and profiles or to take the opportunity to switch to this lucrative and satisfying career from another field.

The following is a brief description of some of the major areas in healthcare administration for which extensive online health care administration and management education and training is now available.

General Administration

Healthcare organizations, like all other types of businesses, are often profit based businesses requiring the highest quality of managerial oversight. A healthcare unit requires a whole top and middle management team in order to function. Matters related to budgeting, profit and future expansion is also, likewise, a managerial responsibility (especially in larger facilities like hospitals).

Healthcare managers in administration positions normally answer to the board of directors. The workload is higher than for many other areas, with administrators often required to work between 55-60 hours a week, however, compensation and career benefits are attractive and the work itself is stable to a great extent. Growth opportunities are numerous and salaries are also amongst the higher levels, with healthcare administration staff making $40,000-50,000 for a start and improving to $120,000-130,000 within 10 or 11 years.

Human Resource (HRM)

HR professionals specializing in healthcare are responsible to maintain a working, motivated staff for all departments. They are often responsible for the hiring of medical staff (doctors, nurses etc) and generally fulfilling HR duties as in any other organization. These professionals average a salary of around $35,000 to $100,000 per year.

Medical information technology (MIT)

With great advancements in information sharing and technology, healthcare has changed drastically over the last few years. With the continued application of new technology in healthcare, a team of professionals is required to operate and maintain information systems (and networks), diagnostic machines, computer systems and software. They are also responsible for upgrading and problem solving. Professionals in this area earn anywhere in the range of $40,000-$100,000; the job description itself varying with the type of facility.

Public relations (marketing)

PR managers in healthcare are responsible for improving the healthcare facilities’ image in the public eye and to keep the surrounding public informed about the facilities and services offered at the healthcare unit. PR managers are also responsible for providing coordination services and information in the event of an emergency or disaster. PR managers are also the spokespersons for their respective facilities, representatives for the unit, and speak for the organization (for instance in the event of a lawsuit etc). They fall into the same pay grade as MIT or HRM professionals.