Hospital CFOs seeking revenue rescue

Business pressures are forcing hospital CFOs to re-evaluate their revenue cycle management solutions, according to market research firm Black Book.

“Shifting payment models and regulations are forcing hospital leaders to redirect previously launched budgets, priorities and strategic plans to assess if new RCM solutions can rescue them from imminent hospital layoffs, even bankruptcies," said Doug Brown, managing partner of Black Book Rankings in a press release.

[See also: 4 technologies that boost reimbursement]

“Most hospital CFOs have no choice but to leverage next generation RCM solutions in order to keep their organizations solvent. The reimbursement challenges ahead to get paid may require several new RCM applications, and the frank reality is that a failing RCM could quickly close a marginally performing hospital for good.”

Black Book surveyed more than 1,900 hospital CFOs, CIOs, business office managers, tech and financial staffers April 2013 and August 2013. Additionally, the business managers of 1,800 physician practices owned by hospital systems also submitted responses, evaluated separately. There were 557 hospital and inpatient organizations represented in the survey.

Black Book estimates that the $2.4 billion hospital RCM software and services industry can expect double digit increases in 2014 because of the changes impacting hospitals, such as reimbursement and payment reforms, accountable care participation, ICD-10 coding challenges, physician practice acquisitions, collection issues and overall declining margins.

HIMSS Analytics found similar market trends earlier this year. In an interview with Healthcare Finance News’ sister publication, Healthcare IT News, HIMSS Analytics Executive Vice President John Hoyt asserted, "There's a new future for revenue cycle." It's time – past time – for replacement, he suggested. HIMSS is the parent company of Healthcare Finance News and Healthcare IT News.

"We're looking at ages 8 to 11 years for these revenue cycle systems," Hoyt said. "Patient billing is different from registration is different from scheduling, but they're generally up there: 8 to 11 years. And that's basically the kind of thing that the auto industry watches. How old are the cars on the road? There's a point at which people just have to start buying new cars."

Black Book also found:

• Roughly two-thirds (3,000 of all U.S. hospitals) that predicted in 2012 that they would replace their core RCM solution in 24 months have failed to initiate a sustainable RCM plan as of Q3 2013. More than half do not have formal needs assessments or vendor selection processes started.
• 28 percent of CFOs blame the multiple clinical and technology projects underway organizationally for keeping their hospitals from upgrading to comprehensive RCM solutions.
• Although 63 percent of CIOs and 88 percent of CFOs agree current their RCMs need to be replaced, they differ on project implementation acquisition, timing and urgency.
• CIOs prefer a single-vendor solution while CFOs put a “best-in-breed” approach over the number of vendors to be managed.

In its report, Black Book also highlighted the top performing RCM software vendors as ranked by customer satisfaction on 18 client experience-based key performance indicators.

ZirMed, rated No.1 RCM software for large hospital hospitals and academic medical centers over 250 beds. SSI Group, ranked first in RCM software for small/rural and community hospitals under 250 beds.

This article is based on a story published by Healthcare IT News.