In 2022, U.S. healthcare spending grew a whopping 4.1 percent. This resulted in the healthcare system worth about 4.5 trillion USD!
Wildly enough, when it came to calculating the nation’s Gross Domestic Product, health spending made up just over 17%. So needless to say, the healthcare industry is not only important when it comes to providing care, but is a lucrative industry as well.
The healthcare revenue cycle consists of both patient care and administrative processes. The entirety of it encompasses the lifespan of a patient account. Starting with scheduling the appointment and verifying insurance, to collecting revenue and more. Any sort of disruption during any of these phases can lead to delayed payments or increased claim denials.
This is why, as a provider, you should not stop delivering outstanding patient care. You must also be sure to keep up to date with and manage your revenue cycle, through every phase.
Striving for efficiency and productivity, while relieving pressure from your administrative staff, is the goal.
Gathering data and leveraging analytics from your administrative processes is key when it comes to collecting your revenue. Tracking your healthcare revenue cycle analytics is an easy and sure-fire way to strengthen your practice’s financial well-being.
By efficiently managing your revenue cycle through analytics, you can:
Enhance employee efficiency.
Improve your financial performance.
Provide better patient care.
By utilizing these clinical data analytics, professionals can collect more revenue from already existing workflows. They can also pinpoint areas in which they need to improve their administrative processes.
Let’s go over the different types of revenue cycle analytics, why they are important to track, and the challenges that come with them.
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Common Healthcare Revenue Cycle Challenges
Before getting into the numbers of it all, let’s talk about the challenges associated with the healthcare revenue cycle. And why we need to pay extra attention to data and analytics in the first place.
First and foremost, adhering to HIPAA compliance requirements should be at the top of your to-do list.
When analyzing data via whatever software you choose, you must also be sure to meet all guidelines to safeguard protected health information (PHI). The last thing you need is for a security breach to disrupt your revenue cycle even further. This could result in costly fines and a halt to all processes.
Make sure your medical coding and billing team is up to date. They should understand the current trends and industry standards. This is a large part of your healthcare revenue cycle.
If left unchecked, it can lead to a revenue bottleneck. One of your main goals should be to reduce your claim denial rate while lessening the load of administrative work for your team. A goal made attainable by tracking analytics, but I’m getting ahead of myself.
Finally, consider these other challenges that may appear in your day-to-day administrative work:
Claims verification and resubmission.
Credentialing.
Value-based reimbursement.
Lack of data-driven insights.
Telehealth adoption.
As I mentioned earlier, revenue cycle analytics often assist clinicians and their staff with identifying potential problems within their revenue cycle. Let’s check out the different types of healthcare revenue cycle analytics and how they can help maximize your financial return.
Types of Healthcare Revenue Cycle Analytics
There are a few different types of healthcare revenue cycle analytics that you should know. Being able to leverage these types of analytics, you can more easily manage your revenue cycle. As well as pinpoint any issues or opportunities to make your process run smoother and strengthen your financial backbone.
The first is contract and payer analytics. This assists you in understanding the financial performance of any payer contracts.
More specifically, these analytics help you identify:
Any problematic contracts.
Any underpayments.
Any trends, to negotiate more favorable terms.
Next, we have predictive analytics, which is pretty much how it sounds.
These analytics utilize algorithms to help identify the likelihood of future outcomes. This prediction comes from historical data trends. An example of this kind of analytics might be taking historical data to predict whether a patient will pay on time or not.
In a similar vein, descriptive analytics deals with historical data to conclude the past.
Like looking at regularly occurring claim denials within the past few months. This is to reduce issues moving forward. Using data to identify common reasons for regular claim denials shows how to address and avoid denials going forward.
If you’re looking for the best way to approach a patient about an unpaid bill, check out this next category of analytics.
Prescriptive analytics help to recommend courses of action when making decisions. Namely, about the process in your revenue cycle management system. It accomplishes this by using different tools and techniques. All of which analyze your data before recommending the best strategy for moving forward.
If you are wondering what caused a certain outcome, then make sure to look into your diagnostic analytics. The “outcome” in this case can be anything from a late payment to a claim denial. Analyzing this data helps identify certain details, such as why certain claims are getting denied monthly.
Real-time analytics involves analyzing data in real-time… pretty self-explanatory, I know. But what does this mean in practice? Take for example when you fill out a new claim, these real-time analytics can flag issues before sending it to the insurer. A great way to preemptively avoid claim denials.
The last analytics type is comparative analytics. This involves comparing an organization’s revenue cycle performance with that of similar companies. This is a great tool that can help identify where your organization can work on improvement.
Why Healthcare Revenue Cycle Analytics are Important
With all this talk about the importance of healthcare analytics, I’m sure you are curious about how using it helps you strengthen your revenue cycle. Why else would you be reading this article… unless you just like to read random articles online for fun? If that’s the case, I’m not here to judge. Anyway, with the use of analytics, we no longer need to rely heavily on manual processes. This of course left room for errors and inefficiencies.
The use of analytics allows for quick checks through large amounts of data. It also offers insights into how your organization is performing.
Important insights to take into account are:
Claim denial rates.
Days in accounts receivable.
Revenue leakage.
With these insights, your staff can better understand the best way to streamline their workflow. This cuts down on wasted time and frustrated employees, thus reducing employee turnover. Having a detailed breakdown of your company’s financial obligations and activities is an underrated tool. Better clarity and perspective on how to handle daily tasks leads to improved revenues.
Identifying areas in your cycle where revenue leakage occurs supports growing your income. Areas of leakage are likely to include coding errors, missed charges, and underpayments. Keep an eye on these threats by tracking your analytics. You can also look to prevent leakage by utilizing predictive analytics, which we touched on at the beginning of this blog.
Another benefit of utilizing analytics includes improved patient satisfaction. When you successfully streamline administrative tasks, you have more time to focus on patient care. Improved patient satisfaction may lead to better patient retention and more timely payments.
Conclusion
It is not only the healthcare industry that takes advantage of data analytics. Organizations of all kinds leverage this helpful tool to increase their profits and streamline daily tasks. Due to the profitability related to the healthcare industry alone, it is no surprise data analysis is at the forefront of everyone’s minds.
Navigating the complexities of the healthcare sector no longer leaves data analytics as simply an option. It is now a necessity for successfully managing your revenue cycle. It is a key feature when it comes to procuring long-term sustainability, as well as business growth.
Utilizing healthcare revenue cycle analytics is the way of the future. Technology is everywhere we look today and constantly evolving. This means the quality of your insights rests heavily on the type of software you use on a day-to-day basis.
Consider investing in a revenue cycle management system through a third-party company. This way, analytics are easily attainable and preemptively sorted for you for quick reference. Again, another tool to save your staff time and help streamline their workload.
