For healthcare leaders facing down COVID-19, the sobering headlines of early spring have given way to a disheartening summer surge. Healthcare -- so often the poster child of “recession-proof” economic resiliency -- is at a crossroads.
Though the pandemic will likely drive broad and dramatic changes across the industry, one obvious focal point will be the administrative complexity associated with the revenue cycle. Long a performance improvement target, the hospital revenue cycle has benefited tremendously from the admirable work of operational leaders and frontline staff over the last two decades. We now face the unenviable challenge of having to continue these efforts amidst the ongoing uncertainty of a global crisis. Thoughtful operators must consider three critical questions as they plot a path forward.
#1) How Do I Develop Staffing Flexibility To Accommodate Ongoing Volatility?
Revenue cycle leaders will continue to face unpredictable work volumes across the next 12 to 18 months as patients and procedures return in waves. We may continue to cycle between the “hammer” (lockdowns) and the “dance” (gradual attempts at normalcy) until viable treatments or a vaccine are discovered1.
Given this volatile environment, traditional staffing approaches will invariably leave revenue cycle organizations either understaffed or overstaffed. To meet the moment, leaders will need to think critically about where to deploy staff versus where to implement technology. Automation and Artificial Intelligence (AI) are obvious candidates for the latter category; leveraging both will be critical in order to quickly scale output up or down as conditions demand.
#2) How Do I “Harden” Operations To Ensure Business Continuity?
Leaders everywhere are adapting their organizations to make them far more robust when faced with crisis events like COVID-19. Caught unprepared by the current pandemic, many are now focused on proactively securing tools and resources that can perform continuously regardless of external shocks.
Robots manufacturing widgets in a factory may leap to mind when we talk about automation, but today’s healthcare revenue cycle is both more complex and more dynamic. Put more simply: it’s hard, and it’s always changing. True automation provides an operational fail-safe during a crisis, not another problem to manage.
#3) How Do I Fundamentally Restructure My Operating Costs?
As the ranks of unemployed Americans hovers near 20M (at this writing), health systems are preparing for a significant (and likely unfavorable) shift in payer mix. As of May 2020, the self-pay payer mix has increased by 8.4% nationally7. This transformation of the reimbursement landscape will accelerate the collapse of the commercial insurance cross-subsidy and intensify existing efforts to not simply reduce, but dramatically restructure operating costs. Healthcare leaders must address their operational inefficiencies, and quickly.
Again, automation and AI hold great promise for the hospital revenue cycle, but only if vendors can deliver flexible and robust automation based on shared value. Too often, hospitals and health systems have found themselves investing in technology based on delivery of the product versus delivery of the promised outcome. Don’t buy the bot, buy the result.
Automation Hype
Savvy readers will greet Automation and AI with raised eyebrows, and with good reason. The healthcare industry is now awash with vendors who have effectively reduced AI from an aspiration to a marketing buzzword.
Though the temptation to write off these technologies as hype can be strong, dismissing them would be a strategic mistake. Healthcare and revenue cycle leaders are climbing the educational curve regarding automation, AI, and machine learning, but they also have one (perhaps surprising) ace to play when faced with hype vs. reality: last mover advantage. Healthcare is a notoriously slow adopter, and while this characteristic is often cited as an industry weakness, it can be a strength.
We can learn from the mistakes of our out-of-industry cousins, especially when it comes to the early iterations of automation. Taking time to learn from other industries can be a critically important way to avoid pitfalls and make the best possible investments in automation tools that truly deliver results. Older technologies like robotic process automation (RPA) were designed first for use in other industries and have been pushed beyond their intended capabilities, resulting in inflexible and brittle automation that is hard to scale and expensive for healthcare organizations to maintain.
A Final Word
Healthcare’s greatest enemy isn’t overhyped technology. It’s organizational inertia. In some ways, this tendency to wait makes sense. But in a world experiencing rapid, significant, and lasting change, doing nothing starts to look paralytic instead of conservative. We absolutely need human talent, and we need humans focused on the highest-value work. But we also need to remember that progress has always been driven by people embracing new tools that expand and extend our capabilities, whether that tool is a dusty bicycle or the latest tablet. Given the shifting market dynamics and financial pressures exacerbated by COVID-19, adopting automation is now mission critical for health systems.
Sean Lara is Managing Director of Business Development Alpha Health. Sean’s 20-year healthcare career includes roles in strategic planning, new product development, and commercial growth. Sean most recently served as a senior partner in the Advisory Board's revenue cycle practice where he oversaw enterprise consulting and technology engagements at some of the largest health systems in the country.