Challenges and the US Healthcare Industry go hand in hand. From constantly evolving payment systems, increasingly labyrinthine regulations to the terrifying Covid-19 Crisis that’s before us today, the challenges we need to counter are many and possibly, never-ending. To surmount these problems and be ever-ready to meet new ones, we must build strength and resilience from within. One way to do that is to focus on improving our core operational efficiency.
“Operational Excellence remains a greater imperative than most companies and most executives acknowledge,” says Gene Tyndall, President Supply Chain Excellence Advisors. This is especially true of the US Healthcare Industry where administrative costs far exceed those of healthcare industries in other comparable countries. The Centre for American Progress (CAP) estimates that the annual Billing and Insurance related costs borne by providers and payers are a startling $496 Billion, of which $ 248 Billion is excessive or avoidable. This inefficiency eventually ripples over to lower revenues for providers and higher healthcare costs for patients – a concern that has been dominating the US healthcare industry for long. So, how can you as a healthcare provider bring down the operational cost of your facility? Here are some ways that are sure to work.
1. TACKLING OVERHEADS TACTFULLY
Overhead costs constitute a significant share of the total operating costs of hospitals and healthcare services. These typically include expenses incurred towards documentation, billing, clinical and other supplies, power, maintenance, transport, sanitation, and other non-clinical expenses. While most of these overheads are necessary for the proper functioning of a healthcare facility and can’t be avoided, tactful management of overheads can give your hospital or practice a sure edge in boosting overall operational efficiency. Here are some pointers to help you pull down overhead costs
- Finding ways to properly classify and record overhead costs is the first step towards efficient overhead cost management. When you clearly categorize and allocate overheads, it will be easier to identify and eliminate costs that are not incurred towards improving or maintaining the quality of care you provided.
- Consolidating and centralizing non-clinical functions can lower costs through economies of scale. Automation is one way in which you can achieve this consolidation.
- Outsourcing Billing and other functions in Revenue cycle management can also push you closer to your cost efficiency goals. A Black Book market Research reports that 54% of healthcare finance executives interviewed for its survey opined that outsourcing RCM had helped them increase efficiency.
- Gathering insights from other industries and applying them to compare aspects of the healthcare business can sharpen your cost-reduction strategies.
- Systematic networking of diagnostic imaging equipment & analysis of operational data can give insights about equipment utilization. Such networking will also increase transparency and help in avoiding redundant laboratory testing
2. GOING THE E-WAY ALL THE WAY!
The digital transformation wave of the past decade has greatly altered the way we look at business operations in almost all industries. The healthcare industry is no exception. Electronic Health Records (EHR), Electronic Medical Records (EMR) & Digitization are ideas that have been widely discussed and progressively adopted in recent years. These electronic records and software-based billing solutions can be pivotal to improving cost transparency and operational efficiency in healthcare facilities. Let’s look at how these electronic channels can ease the strain on your finances.
EHR (ELECTRONIC HEALTH RECORDS)
Electronic Health Records are patient records that have been stored digitally, are accessible in real-time to authorized professionals, and can be shared across different healthcare settings. EHRs can benefit you through reduced costs associated with transcription, medical errors, lost charges, denials, and storage and retrieval of charts. EHR also improves your communication with other labs, clinicians, payers, and patients and consequently improves efficiency across all functions.
EDI (ELECTRONIC DATA INTERCHANGE)
Electronic data interchange in healthcare involves the electronic transmission of healthcare data between computer systems and applications. Using EDI can benefit healthcare businesses by minimizing transaction costs, enhancing security, and improving productivity. EDI healthcare transactions also bring down the costs of handling and processing paper-based healthcare documents
(based on WEDI estimates)
Moving the billing function to an entirely electronic format through a billing software can help practices handle large volumes of claims efficiently. Using Medical billing software can strengthen your operational efficiency by reducing office expenses, allowing real-time data access, helping you identify revenue trends, and lowering audit risk and errors.
3. EXPLORING UPCOMING TECHNOLOGY
Technology holds many solutions to the challenges in healthcare services today both in the clinical and operational facets of the industry. Hospitals and healthcare providers are increasingly exploring and adopting emerging technologies like AI, Connected Devices, Internet of Medical Things (IoMT), Natural Language Processing, Robotics, 3D printing, Blockchain, and Analytics to improve the quality of care, streamline delivery, reduce costs and bring in the much-needed revenues.
Artificial Intelligence, in particular, is fast becoming a preferred tool that healthcare financial management professionals around the world are using for cost management. A recent survey of 115 hospital and health system executives showed at least 50 % plan on investing in nonclinical AI within the next two years. AI and Automation facilitate cost saving by optimizing manual processes. Renowned Global Auditing Firm Crowe predicts that the collection cost spent by healthcare businesses will go down by 25 % to 50 % over the next five to ten years depending on the number of revenue cycle positions that could be taken over by AI.
NLP- Natural Language Processing is another technology with the potential to revolutionize healthcare documentation by making it faster and hands-free with the use of voice-assisted technology. Speech-recognition software has already transformed the way medical professionals interact with the EHRs and NLP is the logical step forward.
4. HONING HIRING & TRAINING STRATEGIES
The responsibility of improving operational efficiency not only rests with the management but with every employee of a healthcare facility. Hence it is important that hospitals see strategic hiring and workforce management as an integral part of their cost reduction efforts. Following these practices in staff management can help you succeed in your cost-reduction efforts
i) Avoiding unnecessary hires by reassigning existing qualified staff to vacant roles
ii) Identifying redundancy in positions and streamlining workflows
iii) Training employees at every level and in every department on the importance of cost-efficiency
iv) Engaging with employees continuously and encouraging them to bring out and execute their own ideas for cost-reduction
Escalating cost in US healthcare services is a deep-rooted problem with multiple layers of complexity and any solution that addresses it necessitates a multi-pronged approach. We, at Rannsolve, believe that such a broad approach to operational cost management that goes beyond the ambit of your finance department to every operational area of your healthcare facility is sure to deliver positive results. We have helped our healthcare clients across the US bring down their costs and boost revenues with our holistic solutions. Contact us today to know how we can spike up your efficiency!