Changing Your Ocean from Red to Blue
I recently came across an interesting quote by Brazilian lyricist and novelist Paulo Coelho:
“In the cycle of nature there is no such thing as victory or defeat: there is only movement.”
In other words, Summer cannot stop the coming of Autumn, nor can Winter prevent Spring. All must succumb to the inevitability of change.
So, too, is it with business. Last year, Brooke Murphy, in a sponsored piece for Becker’s Healthcare, wrote:
“Few provider organizations have the talent, capital and IT resources necessary to keep pace with a rapidly changing economic environment. Instead, many healthcare organizations have seen value in establishing partnerships with financial service experts and IT providers for improved financial management, freeing up hospital resources and administrators' attention for what matters most — patient care.”
For the last 10 years, hospitals and healthcare organizations have been outsourcing anything and everything not directly tied to patient care, from financial services, to administration, to property management and more. In revenue cycle, the trend drove the inception of a deep “red ocean” of vendors offering revenue cycle services. W. Chan Kim and Renee Mauborgne, in their book Blue Ocean Strategy, define the “red ocean” as the bloody competition of rivaling vendors, all fighting over the same market. With so much money at stake in paying for healthcare, competition flourished, and everyone claimed to provide just what Ms. Murphy prescribed by saying, “let us worry about the financial end so you can focus on what matters most – patient care.”
Ah, patient care! Yes, we need to focus on the patients. Well, with one minor prerequisite perhaps: we need to stay in business. We need a healthy margin to keep the doors open, lest we shut our doors completely – as so many hospitals are doing – or be acquired by a larger, cash rich organization.
It might come as no surprise to you, then, that what I am beginning to see in the field - especially among larger hospitals - is the reversal of the race towards outsourcing self-pay. Those patients who we care so much for (so much so that we outsource all the post-service communications and conversations regarding how they plan to pay for all this)… their share of the cost is rising.
And even though outsourcing the whole thing for a single-digit contingency fee on cash collected seemed like a good deal at the time, that bottom line cost is rising along with the rise in self-pay responsibility. Rising to the point that when you look at what a good-sized hospital or organization is spending in real dollars, it gets your attention. And it gets attention at the Executive level, too.
So, lately, healthcare financial leaders have been asking me less about how to offload the burdensome work of patient communications and collections, and more about how to help them bring it back within their own four walls again.
- How will they maintain the performance levels of a vendor, without the luxury of all the technology the vendors have?
- How can they transition over time, knowing they need to rearrange their staff again, perhaps adding people?
- How can they measure their own performance, with an EHR system designed for clinical use and patient accounting, rather than optimizing collections with campaign flexibility?
- How much can they expect to add to their bottom line by bringing it back in house? (hint: it’s a lot)
This is where the flexibility of services sets CCi apart from other solutions. CCi has moved from the red ocean of look-alike vendors - all pitching the same approach - to the BLUE OCEAN of a completely new approach – providing hospitals with the tools and technology to do it better themselves. In surveys we conducted months ago, most hospitals (whether they prefer to insource or outsource self-pay) agreed that early out vendors have better technology and systems designed for optimizing self-pay outcomes. Furthermore, both groups worry about relinquishing the patient conversation and giving up local jobs to achieve that optimization. With a blue ocean approach like this, your vendor-partner provides the collection technology (propensity to pay scoring, flexibly designed campaigns based on segment, dialer capability, printed statements and letters, an online patient portal, payment reminders via text and email, presumptive charity scoring and notification, etc.), all integrated with your patient accounting system. Then, your hospital team maintains the patient relationships and conversations. Hospitals can expect to achieve or maintain the collection performance of using a partner, while dramatically improving their financial bottom line through significant cost savings.
So, although the vendors all want the hospitals to believe they’re all doing this so you can focus exclusively on caring for the patient, the truth is, your organization can do both. You can provide great care for the patient while still eliminating what are becoming more and more difficult costs to absorb.
Interested in learning more about how? Lets talk.