It’s no secret that the healthcare industry has seen some significant changes over the past several years. With the creation of the Affordable Care Act in 2008, it got the ball rolling for numerous other changes and reforms designed to make the healthcare system better for patients.
One of the biggest changes in recent history – meaning the past year or so – has been the gradual switch to a value-based care system. This includes payment reforms and changes away from the fee-for-service programs of the past. This shift has presented numerous challenges for hospitals trying to streamline their revenue cycles.
How is Value-Based Service Changing the Healthcare Industry?
Shifting to a value-based system is the largest singular change to the healthcare system since the Affordable Care Act. Value-based service means that hospitals and doctors are paid based on their patient’s improved health. The previous system was a pay-for-fee service, which meant that hospitals would be paid by the number of services provided.
Value-based service comes in many different forms such as bundled payments, pay for performance (P4P), and more. This model is designed to improve the quality of care received by the patient and hold hospitals more accountable for their tests and procedures. In general, it helps patients receive affordable healthcare service.
What are the Challenges for Hospitals Switching to Value-Based Care?
One of the biggest challenges facing a value-based care system is maintaining a clear and efficient revenue cycle. The revenue cycle consists of the administrative and clinical work that contributes to the management and collection of patient revenue. In other words, it’s the work that is done to make sure hospitals get paid.
A typical revenue cycle starts when the patient enters treatment. Once the services rendered are transferred to billable fees, the revenue cycle works to process the claim and collect the money. At any given time, a hospital or doctor’s office could have thousands or millions of dollars tied up in the revenue cycle as they wait for payments to be approved and paid.
With a value-based care system, the revenue cycle can get a little muddy since it’s more difficult to translate fees based on the quality of care rather than set fees for specific services. This can make a revenue cycle slower and less efficient.
What is the Solution?
As the healthcare industry shifts to favor value-based care, hospitals, and doctor’s offices still need an effective revenue cycle to ensure payment and collection of fees. Regardless of the type of care being offered, a working revenue cycle is vital. There are a few ways that healthcare providers can make the most of the changing industry while continuing to manage an effective revenue cycle:
Outsourcing: The market for revenue cycle outsourcing companies is on the rise. Especially with the current trends shifting to a value-based system, hospitals will not want to rework their entire revenue cycle. One of the most effective ways to handle the change is by outsourcing the process to a different company.
Integrate Analytics to Track Data: Another effective way to manage your changing revenue-cycle is by integrating more effective data collection and analytics. By analyzing the data and making decisions based on trends within the data, you can help streamline your revenue cycle.
At Rev-Ignition, we are a revenue cycle management company that can help you maximize your revenue while reducing costs. To speak with one of our expert advisors, call 1 (844) 297-9944 today.