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An Outside Approach to Revenue Cycle Improvement

November 4, 2013

Strategies for managing revenue cycle performance typically involve regularly combing over processes and technology functions to identity opportunities for efficiency. Pairing the right person with the right task is integral to performance efficiency and effectiveness, and it’s becoming more common today to involve someone outside of the hospital’s walls.

In determining the most effective way to use resources, many organizations are turning to the strategic application of external assistance, according to the report An Outside Approach to Revenue Cycle Improvement, excerpted below. The report is sponsored by Emdeon.

Benefits of Hiring Outside Help

Hiring outside the organization may seem counterintuitive to saving money or providing better service. But when such arrangements are approached properly and selectively, hospitals can achieve a variety of benefits, such as:


  • Access to specialized expertise, resources, or technologies
  • Enhanced ability to respond or accelerate business efforts in specific areas
  • Easier navigation of an increasingly complex regulatory environment
  • Improved accountability or transparency around metric-based performance
  • Cost efficiencies (for example, external providers may take on acquisition and maintenance cost of technologies or pass along benefits from economies of scale) 

To control cost and be effective, external assistance needs to be engaged under the right circumstances and with proper controls. Leadership needs to evaluate whether effective results and ROI would be better achieved through improved internal processes. Also, particular care should be taken to ensure the arrangement best meets the desired objectives and supports the organization’s quality and service goals. What’s more, ongoing monitoring of the arrangement is important to ensure performance improvements are sustained.

Key Considerations When Seeking Outside Assistance

Whether bringing in a one-time consultant to provide a fresh eye to an ongoing problem, such as inefficient scheduling processes, or calling on a vendor to completely oversee a particular function on an ongoing basis, such as medical necessity review or collections of aged receivables, revenue cycle leadership should assess level of need and carefully consider the organization’s goals, options, project scope, and potential effects—financial and other. Here are just a few initial questions when determining whether to seek external assistance:


  • What barriers are the hospital encountering to achieving its objectives? How would an external consultant address these barriers differently or more effectively?
  • What are the anticipated financial benefits and true costs of outsourcing the function?
  • What are the key benefits to be achieved? (For example, is the organization anticipating access to lower-cost computer capabilities, greater expertise, or lower labor costs?) How will these benefits be realized?
  • What impact would outsourcing the function or bringing in a consultant have on hospital employees? Would the strategy be viewed as a positive step or one that has to be “sold” within the organization?
  • What effect would outsourcing the function have on patient service and satisfaction? 

Such considerations, as well as a thorough cost-benefit analysis, are key to recognizing strategy feasibility. If the organization decides to pursue external assistance, then it should use standard vetting processes and contractual review. As is done when outsourcing any other function, vendors should be put through a rigorous selection process based on criteria, such as level of service offerings, cost, track record of performance, reputation in the industry, satisfaction of past customers, and transitional support. The organization’s legal team should carefully review the structure and execution of arrangements, giving attention to such issues as performance expectations, compensation, contract length, and opt-out protections.



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