Healthcare CFOs Planning To Outsource RCM, Control Costs In 2016

By Megan Williams, contributing writer

CFO input drives much of the decision-making process behind the purchasing of your products and services. This infographic from Medical Billing Star breaks down their perspective and concern by the numbers.

RCM Services

According to the infographic, the revenue cycle management (RCM) space is showing potential for solutions providers, with about 2,400 hospitals having failed to initiate a sustainable revenue cycle management plan as of July of this year. Additionally, more than 1,000 hospitals confirmed that they had activated new or renegotiated an RCM services/solutions agreement between January of last year and July of this year.

Cost Control Efforts

Also note organizations across the country are fighting to control costs. Memorial Sloan Kettering in New York saw operating income drop by 9.3 percent and the Mayo Clinic cut expenses while still seeing a rise in cost during the first quarter of 2015.  New York City systems expect to see an operating deficit of $1 billion in two years as a result of the ACA reducing supplemental funding to its hospitals.

CFOs Weigh In

CFOs are feeling the monetary crunch and are taking action — according to a survey, 79 percent of healthcare CFOs said they will eliminate financial and coding technology vendors who don’t produce an ROI in 2016.  They also plan to outsource RCM processes in a reach for efficiency and positive impacts on their organization’s financial health.

Key cost drivers they’re concerned about are

• healthcare legislation and mandates (33 percent)
• overutilization of products and services (13 percent)
• labor (12 percent)
• lack of clinical coordination of care ( 12 percent)
• misalignment of quality and payment incentives (8 percent)
• HIT (7 percent)

A Big Pain Point For Tech Solutions

The top three roadblocks to controlling costs fall under the technology umbrella.

A lack of data on the true cost of providing care was cited as number one roadblock (60 percent) followed by insufficient integration with care partners (41 percent), and lack of technology in place to achieve targets (40 percent.) 

CFOs also provided their top concerns:

• improving clinical documentation (68 percent)
• minimizing denials (51 percent)
• bettering pre-service collections (44 percent)
• improving patient collections (44 percent)

Other Tech Highlights

• 80 percent of hospital CFOs are considering outsourcing RCM services to fill the gap until new software can be afforded and installed
• 93 percent of hospitals over 200 beds plan to supplement their existing RCM software with outsourced services in Q1 of 2016
• 55 percent of healthcare systems believe that clinical and financial data will be the primary activity over the next three years
• 33 percent are interested in analytics support for expense and cost monitoring.