When hospitals need to cut costs, revenue cycle is often one of the first areas that go under the knife. In some ways, this makes perfect sense. Historically, revenue cycle has been regarded as a cost center that doesn’t factor into an organization’s core function of patient care.
At the same time, revenue cycle is an integral part of the patient experience — meaning that when it’s time to save money, discretion matters.
Healthy Cost Cutting
If you look at expert advice on doing more with less in the revenue cycle, you’ll notice the recommendations aren’t random.
Instead of focusing on reducing costs, they lean toward tactics that optimize results and increase ROI. For example, Revenue Cycle Intelligence recommends taking steps like:
- Raising patient satisfaction to reduce patient use of customer service resources
- Embracing technology like decision support systems to improve revenue cycle performance
- Identifying KPIs to increase efficiency and reduce labor costs
Notice that these steps center on improving the patient experience and creating a better revenue cycle — not just reducing a number.
The Danger of Short-Term Thinking
Those points may seem obvious, but it’s still tempting to slash budgets to get short-term results. Unfortunately, just like saving money with Chinese drywall, it meant tens of thousands of dollars of issues for homeowners in the long run. Taking shortcuts like the ones listed below will eventually backfire and probably collapse your long-term revenue cycle goals:
Sending Boring Bills
Color ink is costly, and design doesn’t come free, so keeping your bills as bare bones as possible seems like an easy win. But is it?
Sticking with cramped, black and white design means you’re skimping on the primary vehicle of patient financial communication. Great design encourages payment, heads off questions before they are asked, and preserves your customer service resources. It also supports an overall better patient experience — improvements that add up fast over the thousands of statements you’re sending out every year.
Even minor investments like adding a pop of color to highlight your call to action or making better use of white space can go a long way in combatting losses due to dull or confusing statement designs.
Offering Fewer Payment Options
Giving your patients more payment options sounds like a great idea but it costs money, so it’s perfectly reasonable to put off that merchant services upgrade for another couple of years, right?
This decision would be a definite step in the wrong direction. Your patients are living in a world where they have a wealth of payment options ranging from credit cards to financing. Their expectations don’t stop when they enter the hospital.
Frustrating your patients with limited payment options isn’t just an annoyance for them. More options actually encourage patients to pay their bills faster and at higher rates, giving a boost to your bad debt numbers. Leaving your patients stuck in the past is ultimately a big risk to your bottom line.
Shorting Your Front-Line Team
It might seem like a good idea to cut patient-facing staff when budgets get tight, but these are the people who walk your patients through some of the most important steps of the revenue cycle.
Your customer service representatives spend time helping your patients sort out questions and make proper payments. If they’re stretched too thin because of personnel cuts or aren’t properly trained to have productive conversations that leave your patients satisfied, you’re asking for long-term problems.
A decision today to save a few dollars by eliminating staff or cutting training hours could mean years of frustrated patients who are tired of sitting on hold and aren’t sure how to settle their account balances even if they wanted to – the end result is that patients may sit on a bill, allow it to go into collections, or simply not pay.
Scrimping on Technology
Still trying to save money by going with a cheap solution or squeezing the last drop of ROI out of your tech investment? You might just be shooting yourself in the foot.
Healthcare challenges evolve rapidly. Those challenges need tech solutions that not only keep up with but also get ahead of the margin-killing inefficiencies that are creeping into your workflows on a daily basis. Cutting costs by spending less on upgrades, add-ons, and newer solutions is a promise to spend more time running reports and implementing workarounds — not to mention the long-term cost to your hard-earned reputation from solutions that don’t look and feel like your hospital branding.
Healthcare has been and always will be a long game. While it might be comfortable to stick with the easy way out with cost-cutting measures, remember the tale of Chinese drywall and how much money, time, and frustration someone’s shortsighted frugality affected so many people.
RevSpring Can Help
RevSpring Health is a leader in patient communication and payment systems designed to inspire action. We combine dynamic workflows, business intelligence, responsive messaging, and behavioral analytics to tailor engagement opportunities so patients can be more proactive in their healthcare journey — from appointment scheduling to payments.
If you’d like to learn more about our comprehensive patient engagement and billing solutions, we’d love to help you. Request a demo to see how we can help your organization meet its goals.