Most health systems have invested heavily in primary care practices in the last decade. The good news is this strategy is paying off. Research shows that primary care providers are key to engaging patients, coordinating care, controlling costs and ensuring the best outcomes. For healthcare organizations, a strong primary care strategy is key to succeeding under value-based care.
COVID-19 has decimated fee-for-service (FFS) revenue. To stay in the game, healthcare providers can use a chess-inspired strategy to rebuild the revenue cycle while preparing for value-based care.
The COVID-19 pandemic has triggered major financial losses for hospitals, health systems and medical groups. Healthcare organizations now face the double challenge of rebuilding FFS revenue while continuing to transition toward value-based payment.
While U.S. providers have suffered profound financial losses because of COVID-19, health insurance companies have actually benefited from the pandemic. Providers require effective strategies to achieve a more equitable balance.
Healthcare utilization has dropped sharply as a result of COVID-19, causing most hospitals to experience a major drop in revenue and margin. But for most commercial payers, lower utilization has slashed claims expenses and created a huge financial windfall.
For example, United Healthcare’s net income doubled during the first wave of the pandemic, jumping from $3.3 billion (2019 Q2) to $6.6 billion (2020 Q2).a
Although these market dynamics clearly seem unfair to providers, there is no reason that providers should simply accept the status quo. As they struggle to recover financially from COVID-19, hospitals and health systems should not hesitate to look to insurers to share their excessive surpluses.
Right now, the biggest potential opportunities for providers are in contracting with insurers. Financial leaders should focus on three broad areas where they should seek to renegotiate existing contracts and lay the groundwork for beneficial new partnerships.
While physicians as well as hospital clinical and operations staff are focused on patient care and the clinical side of health care, the financial leaders—including CFOs, financial analysts, business, strategy and contracting/payer relations teams—have their own focus: beginning to forecast the pandemic’s effects on the bottom line.
This forecasting and future planning is essential to ensuring the health care system is still viable and strong as leaders manage through the crisis. Understanding and modeling the financial impact is challenging, however, what with so many critical forces in play from all avenues and key stakeholders.
There are many mechanisms healthcare organizations can use to accelerate their financial recovery efforts post-COVID-19.
When examining these mechanisms, financial leaders' questions often boil down to two essential concerns: How effective is it? And how long will it take for us to see results?
The revenue cycle lands at the top of the heap when it comes to quick but highly effective ways to accelerate revenue. It also plays a critical role in improving the patient experience and health of populations while reducing the cost of care.
By improving revenue cycle efficiencies, healthcare financial leaders can gain a vital "quick win" in their financial recovery timeline.
I recently taught a 2-day HFMA seminar on Revenue Cycle Essentials and KPIs (key performance indicators). Here, I’ll summarize the challenges revenue cycle leaders are experiencing today, as well as key factors for success.