Gradual RCM Outsourcing: Solution to Layoffs and Low Margins for Health Systems?

Posted by Willam Smith on June 20th, 2023

According to a Fitch Ratings survey, “last year was the worst operating year” in healthcare. Low patient volumes, capital expenditures, and rising operational costs, have had significant impact on health care systems’ bottom lines.

With 2023 expected to be a “deciding year” on whether this trend is going to continue, decision-makers at health systems are doing their best to find ways to minimize the impact on their profit margins.

Therefore, in this article, we’ll explore whether gradual outsourcing of revenue cycle management processes could be the solution to increasing layoffs and thinning operating margins, along with its impact on the Health System billing process.

The Current Scenario

Layoffs are not showing any signs of slowing down even in 2023. Over the past nine months, a survey has found over 60 hospitals that reported job-cuts, laying-off close to 4,000 employees.

Although margins have improved slightly, a large number of health systems are trying to deal with the current challenges by cutting down on services and shutting down departments.

These measures are unsustainable. Continuous job-cuts are bound to short-staff hospitals to an extent that their day-to-day operational functions will be significantly compromised.

Could Gradual Outsourcing of Health System Revenue Cycle Processes be the Solution?

Health systems being large organizations with numerous hospitals, medical groups and clinics under their network, it is a no-brainer that outsourcing RCM for every member at once would bring about unimaginable disruption.

But since, outsourcing is the best option available to deal with the current challenges, it is crucial to acknowledge that this is bound to happen soon, if not now.

And since, there is no better option currently available, it is definitely not foolish to start off by outsourcing operations with low to medium level of complexity. Such a venture can also produce a beneficial effect on the Health System billing process.

The benefits of gradual outsourcing of health systems’ revenue cycle management

Let’s discuss the benefits of gradually outsourcing revenue cycle functions for health systems:

1. Reduction of costs: Outsourcing revenue cycle functions is often a less expensive option when compared to employing an in-house operations team.
2. Reduction of operational errors: Partnering with a trusted RCM company will help pass on the benefits of employing a certified professional billing and coding team.
3. Access to expertise: An RCM company that has rich and extensive industry experience can provide subject matter expertise on a range of areas like billing, insurance, reimbursements, and denial management.
4. Improved cash-flow: Providers can expectlower operational costs, and optimized reimbursements to translate into improved cash flow for their organization.
5. Focus on patient care: Freeing up resources from operational functions can help providers focus more on providing patient care.
6. 24/7 operations: Most trusted RCM companies offer operational support round the clock, allowing health systems to reach out for guidance or clarity any time of the day.

Some Last Words

The current economic and operational challenges are one-of-a-kind requiring solutions that are out-of-the-box. Outsourcing operations can cause unwanted disruption and so a better and more cautious way to approach it would be outsourcing revenue cycle processes gradually.

Sunknowledge Services Inc. has been helping health systems across the US to optimize their revenue cycle processes and Health System billing & coding processes for nearly two decades now. For more information on how Sunknowledge can help your organization beat staff shortages and margin pressure, please feel free to contact us.