The Healthcare Financial Management Association’s (HFMA) Annual Meeting is a premier forum for idea exchange on the finance challenges and trends shaping the industry. CommerceHealthcare® exhibited, presented and attended this year’s conference, which covered a wide range of topics. This brief provides an overview of four key themes spotlighted throughout the annual meeting.
1. Challenging Financial Trends & Outlook
Closely monitoring the current and forecasted environment is essential for healthcare leaders. Two sessions updated critical revenue cycle management (RCM) trends. In the session “Thinking Ahead to 2025: Strategies for Revenue Cycle Innovation,” a panel consisting of Alison Shipley, Principal at The Chartis Group; Christopher Giuliano, Vice President of Finance, Specialty Revenue Cycle at CVS Health; Gerilynn Sevenikar, Vice President at Sharp Healthcare; and Kevin Roberts, Chief Financial Officer at Geisinger, discussed value-based care’s impact on organizations and consumer behavior. They began with data underscoring the powerful forces at work:
- Value-based care will make up 59% of healthcare payments by 2021.
- 51% of consumers consider convenient access most important in choosing a healthcare provider, outranking brand reputation, quality, and insurance company.
- Hospitals continuing “business as usual” will see a 15.8% margin drop by 2021.
The panelists offered promising revenue cycle strategies to navigate these trends effectively:
- Streamlining the claims adjudication process because “friction around small dollars doesn’t
make financial sense.”
- Combining real-time adjudication with assumed approval for stay, unless the payer immediately indicates claim denial. (Sharp reduced denials from 45% to 9% in 90 days.)
- Avoid “throwing labor at a problem” in favor of “extreme automation” such as rapid patient financial communications via mobile devices to offer consistent, cost-effective experiences.
Kevin Holloran, Senior Director of U.S. Public Finance at Fitch Ratings, provided his firm’s industry view in the session “Market Outlook: Trends and Longer-Term Perspective.” Overall, Fitch sees “continued pressure on margins, but stability on the horizon.” Margin erosion drivers include:
- Medicaid and self-pay expansion at the expense of higher commercial insurance payments.
- Increased patient price sensitivity driving provider price competition.
- Contraction in commercial rate increases, often from payer consolidation.
A bright spot is hospital balance sheets, at “an all-time high point” as measured by cash on hand and cash-to-debt. Other favorable factors on the horizon:
- Reduced capex for inpatient expansion and EMRs.
- Better fixed asset utilization as aging population requires more care.
- Better prepared management.
Holloran’s “keys to success in this dynamic reimbursement environment” included sustained quality outcomes, physician productivity, continuous process improvement and managing multiple reimbursement worlds simultaneously.
2. Patient Financial Experience Takes Center Stage
Today’s consumerism has created an intense focus on the patient financial experience. In the presentation session “Eight Initiatives to Support Patient Financial Care,” Piedmont Healthcare’s Brian Unell, Vice President of Revenue Cycle, Transformation and Integration; Allyson Keller, Executive Director of Patient Connection Center; and Andrea Mejia, Executive Director of Patient Financial Care, conveyed their organization’s comprehensive approach to customer-centricity. Faced with numerous complaints about statements (30% of patient calls) and ballooning balances-after-insurance reaching $100 million, Piedmont established two clear goals.
- Simplifying the financial experience
- Boosting collections by $10 million.
The organization undertook eight connected initiatives, as shown in Figure 1.
Program highlights include:
- Contact center optimized for efficient preservice processes.
- A Patient Financial Responsibility Policy. Piedmont announced at HFMA that it would begin requiring upfront payment of 25% of the bill from patients obliged to cover non-emergency services.
- A comprehensive patient statement integrated with multi-modal communications technologies.
- Responding to patient demands for more flexibility with new third-party financing options.
- Revision of job descriptions to “support the move to self-service technologies” and reinforce the idea of “staff as owners of the patient’s financial experience.”
This consumer-friendly strategy has increased point of service collections by 30%, reduced patient call length by 39% and decreased denials as a percent of net revenue by 13%.
Another perspective came in the session “Using Patient Financial Communications to Improve Estimates and Engagement,” by Michelle Fox, Director of Revenue Operations at Health First. Her organization’s payment process was plagued by patients receiving different information from different staff members and often surprised about copays. Health First instituted a “100% Estimate, 100% Ask” policy in which an estimate is run for every patient regardless of insurance status, payment obligation or service required (including ED). At the same time, upfront payment is always requested. This approach “hardwires patient financial conversations” into the process and has achieved a 27% increase in upfront collections - 2.4% of net system revenue. As Figure 2 suggests, “getting to 100%” requires diligence in gaining buy-in, training and workflow design.
Improvements to training and workflow were just one of the key messages shared by Sheila Augustine, Director of Patient Financial Services at Nebraska Medicine. Augustine joined Rick Heise, Senior Vice President of CommerceHealthcare®, in the session “3P’s to Successful Claims and Reimbursement: Provider, Payer, Patient.”
To overcome challenges in collections, Nebraska Medicine needed to take a multifaceted approach to payer and patient relationships. The organization began by developing stronger partnerships with payers to reduce claim denials. This was achieved by working to better understand each payers’ requirements for claims and proactively identifying issues before notifying patients of claims denials.
With patients shouldering larger financial responsibility of care, Nebraska Medicine also focused on improving the patient financial experience. Nebraska Medicine started by enhancing patient communication and simplifying the patient payment processes, while creating additional options. A critical step in these efforts was the selection of a CommerceHealthcare® HSF® program, a flexible patient financing program with no interest and an open line of credit. The results of the program are significant, with Commerce currently managing nearly $7 Million in funding and a 92% collection rate.
3. Opportunities to Improve Financial Performance
Actionable ideas for enhancing organizational financial health were offered in several sessions. In “Improving Financial Performance Through Innovative Process Improvement,” Virginia Mason Medical’s (VMM) Steve Schaefer, Senior Vice President of Support Services, and Rhonda Stewart, Senior Transformation Sensei, directed attention to Lean-based changes to patient financial services. VMM’s barriers involved staff locked in functional silos, a “blame culture” and frequent errors. A “strategic staffing model” was adopted featuring “pods” grouping several related functions and supported by trainers to build cross-functional knowledge. With this “horizontal rather than vertical” structure in place, continuous improvement efforts were directed to four core patient financial services processes, displayed in Figure 3.
VMM has realized tangible success:
- Reduction of 3 leader FTEs.
- $300,000 Medicare Advantage incentive payment.
- Increased reimbursement from more accurate Risk Adjustment Factors (RAFs).
Clinical costs were the target discussed by attorney and former Chief Financial Officer Melony Goodhand in “A CFO Perspective from the Clinical Front Lines of Cost and Care Management.” Her central thesis was that clinicians must realize “it is their responsibility to manage cost.” Nurses are key since they possess detailed knowledge about three high-impact financial areas: case/utilization management, care transitions/readmissions and non-labor costs such as OR supplies. Goodhand advocated giving nurses and their leaders the time to understand costs and drive change. Figure 4 highlights selected specific tactics.
A “culture of innovation” is imperative. Goodhand recommended overcoming nurses’ traditional dislike of serving on process improvement committees with shorter-duration group assignments. She ended by quantifying what is at stake. For example, reducing half an excess day on 25,000 admissions can save $7.5 million annually.
4. Artificial Intelligence Offers Great Promise for RCM
Technology is a major change agent in healthcare finance, and artificial intelligence (AI) is particularly promising. AI can “improve revenue cycle performance and enable clinicians to focus on outcomes.” That was the message of “Using AI to Improve Revenue Cycle Process” by Jakeline Chalarca, Director of Revenue Integrity at Moffitt Cancer Center, and Korin Reid, Principal Data Scientist with Craneware. Clear understanding of RCM issues is currently hampered by:
- Manual, fragmented, time-consuming data analysis.
- Inconsistent data from diverse systems complicating data standardization and integrity.
The speakers described the steps involved in capturing and normalizing “timely and accurate data for decision-making.” That data feeds AI models built for estimating financial impacts of initiatives and crafting management dashboards for ongoing problem-solving. Two RCM use cases cited were analyzing missing charges and denial prediction.
Tom Stafford, Vice President and Chief Information Officer at Halifax Health, and Tony Oliva, Vice President and Chief Medical Officer at Nuance Communications, used the session “AI Powered Documentation to Prioritize Patient Encounters” to demonstrate how the technology can favorably influence “documenting patient encounters with more specificity to achieve an increase in case review rates and reimbursement payments.” In tandem with technologies like speech recognition, AI automates encounter prioritization and gives doctors point-of-care documentation guidance in several ways:
- Presenting real-time advice on describing specificity of diagnoses for proper ICD or HCC coding.
- Analyzing encounter notes to present clinical clarifications that impact principal diagnosis and severity documentation.
- Embedding specialty-specific workflows and requirements.
Figure 5 shows an AI-generated documentation alert.
The myriad benefits of Halifax’s deployment of these advanced tools are highlighted in Figure 6.
An HFMA keynote placed AI advancements within a larger innovation narrative. Venture capitalist Marcus Whitney observed that healthcare entities devote under 1% of revenue to innovation, inadequate to respond to the level of forthcoming industry disruption. Whitney advocated developing an “innovation supply chain” that every year generates several financially beneficial changes that permeate the organization.
HFMA’s deep dive into leading financial issues provided many helpful takeaways on industry trends, patient financial experience, performance improvement and AI technology. These insights should prove valuable in addressing today’s urgent healthcare challenges.