Hospitals divided on revenue cycle purchases
Most hospitals have no choice but to look for next generation RCM solutions in order to keep their organizations solvent
Hospitals' struggle for financial sustainability continues and may be getting worse, as CFOs say information technology investments draw more resources than expected and threaten to crowd out other priorities.
According to new survey data from Black Book, there’s something of a rift opening between smaller health systems, the proverbial “have nots,” and large, highly-capitalized hospital systems that can eat the high costs of medical records systems while still making other investments in financial software, emerging patient care technologies and capital improvements.
About 40 percent of hospital CFOs surveyed by Black Book said their organizations are so stretched from “misjudged EHR, HIE and patient portal expenses,” that they are postponing purchases of new revenue cycle management software until at least 2016. Another group stands as the “haves”: the 41 percent of hospital CFOs who reported good fiscal health and plan to move ahead with “next generation” revenue cycle management tools.
[See also: 5 opportunities for improving hospital revenue cycle management.]
About 90 percent of those “haves” told Black Book that they are currently implementing new revenue cycle management systems, have committed to a new system or plan to nail down a purchase our outsourcing agreement by summer of next year.
“Most hospitals have no choice but to look for next generation RCM solutions in order to keep their organizations solvent,” argued Doug Brown, Managing Partner of Black Book. “Increased self-pay volumes, lack of pricing transparency, no patient financial responsibility/estimation technology, and other reimbursement challenges are driving many marginally performing healthcare organizations to the brink.”
Failing revenue cycle management systems will close marginally performing hospitals for good and will get CFOs fired
Over the course of this summer and fall, Black Book surveyed 2,300 hospital CFOs, CIOs, technology and finance staffers representing 590 hospital organizations. From that, they research firm has a window into healthcare finance trends.
One big one is bad debt stemming from outstanding patient balances. Many of the managers surveyed said they need software that can make patient coverage estimations by verifying insurance, benefits, out-of-pocket costs and real-time pricing.
The patient financial experience and the larger move away from fee-for-service has some CFOs and long-time finance managers worried about new top executives coming in and concluding that drastic change is necessary, including financial leadership. More than a third of the CFOs at struggling hospitals told Black Book that the industry trend of bringing in CEOs from outside healthcare could affect their tenure.
As Black Book’s Brown argued, “failing RCM systems will close marginally performing hospitals for good and will get CFOs fired.”
[See also: 6 tips for lean revenue cycle management.]
In a related report, Black Book gauged hospitals’ experience and satisfaction with some of the more popular revenue cycle systems.
Zirmed was rated first for large hospital hospitals and academic medical centers over 250 beds for comprehensive RCM. Other large organizations ranked a range of RCM software vendors well, including Optum, McKesson Relay Health, Emdeon, MedAssets, Siemens,Cerner, Passport Health, Craneware, Infor, Quadramed, 3M, Revenue360, Epic Systems, SSI Group, and GE Healthcare.
Among small, rural and community hospitals under 250 beds surveyed by Black Book, McKesson RelayHealth ranked first. Others included ZirMed, Emdeon, MedAssets, Siemens, Optum, GE Healthcare, Allscripts, Greenway, App Rev, and Availity.
