Delivering
quality of care while maintaining patient experience has exponentially become
more difficult for healthcare providers. Parallon, a subsidiary of Hospital
Corporation of America (HCA), allows healthcare facilities to focus on patient
care by providing facilities with a full revenue cycle service. Parallon assist
hospitals and facilities alike by improving their financial bottom line and
providing services including; insurance eligibility, medical coding, accounts
receivable reduction, business-to-business customization, and denial
management. Parallon’s technology, work processes, and experience are a few of
the offerings that another healthcare provider can benefit from. Parallon will
allow healthcare leaders to place patient care and advocacy on the forefront,
while back-office operations become more efficient and effective, leading to
higher revenues and payor reimbursement.

Revenue
cycle management (RCM) has experienced a surge in the market place. With
patients expecting a more retail like experience, more hospitals are turning to
outsourcing rather than keeping their business offices in house.  Within the next six years, RCM is expected to
hit 38 billion dollars within the United States and experience 11% growth
(Rajagopal, 2017). While the market is expanding more healthcare providers are
going to have to make a decision on if they prefer partial or full revenue
cycle services. Once that is determined, the hospital will have to decide which
company they prefer to use and which best meets their needs. Within a red ocean
industry and over 160 plus companies offering services, how can a healthcare
provider determine which company has a competitive advantage and can deliver
the most value (Dyrda, 2017)?

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While
there are several complex areas of revenue cycling, some of the key competing
factors include: insurance eligibility, self-pay service, small dollar
insurance resolution, third party liability, extended business office (EBO),
scaling, and technology enhancements. Each service is critical to the revenue
cycle and can be beneficial for any healthcare facility. Insurance eligibility
and advocacy plays a critical role in hospital’s net revenue and income
statement. According to NBC News in quarter four of 2017, the percentage of
uninsured individuals came in at 12.2% (Sarlin, 2018). With the Affordable Care
Act (ACA) in limbo, uninsured and uncompensated care is a hot topic within the healthcare
sector. Having a revenue cycle service that is able to capitalize on uninsured
patients and raise the facility’s Medicaid enrollment numbers means higher
reimbursement on the back end. Not only by investing in a revenue cycle service
is the bottom line increasing, but patient satisfaction is also rising. Patients
are experiencing a facility that truly cares about their financial health and a
facility that shows that the patient does come first.

Through
the ACA millions of individuals were able to enroll in healthcare plans;
however, consequently, high deductibles and medical bills also followed.
Parallon feels it is imperative to offer healthcare providers a catered
self-pay and early out service (Wright, n.d.) Per the Consumer Financial
Protection Bureau, roughly forty-three million Americans carried medical debt
on their credit score in 2014 (Andrews, 2017). By setting up effective payment
plans and providing price transparency at point of care, revenue cycle companies
can help provide patient education.

Once the patient has been treated
and discharged from the facility, RCM becomes even more critical. Reducing
accounts receivable is a top priority for healthcare executives. The quicker
accounts can be resolved, the healthier the bottom-line (Sandborn, 2017). How
revenue cycle companies aid and tackle this challenge varies. Some companies
have decided to turn their focus more on small dollar accounts where money is potentially
left lingering on the facility’s balance sheet. While this strategy may not be
attractive or cost-efficient for some, revenue cycle companies feel this is
great win in reducing accounts receivable.

Payor contracts are becoming more
convoluted and complex by the day. Healthcare providers do not have the time to
specialize in learning how certain auto insurance or worker comp claims need
resolved. Billing and coding measures are changing daily and follow up
procedures require a specialized knowledge level. RCM companies understand that
these claims could take two to three years to resolve depending on litigation
and other issues arising (Bustamante, 2017). This specialized knowledge is a
competing factor when selecting a revenue cycle company. Despite these claims
only accounting for appropriately three percent of gross billings, the dollar
amount is near ten billion industry wide. (Bustamante, 2017)

RCM provides great benefits to
healthcare providers, but some healthcare leaders are resistant to outsourcing
their financials and prefer to keep it in house. However, this creates more risk
for the hospital due to strict government guidelines and Medicare regulations (Johnson,
2017). By offering an extended business office and providing as much or as
little assistance a facility needs revenue cycle companies are flexible and
customer orientated. Some RCM companies offer a full service from when the patient
enters the hospital until the account balance is at zero, while others focus on
specific issues such as coding or billing. Of the 5,564 total hospitals across
the country, 952 are owned by the top ten hospital chains (Gooch, 2017). The
ability to scale a revenue cycle company and analyze big data quickly, plays
well when marketing to customers. Scalability does not occur without sufficient
technology. Technology allows revenue cycle companies to trend issues and stay
on top of new billing and payment resolution guidelines. While technology has
been significantly impactful for a clinical standpoint, it has been crucial in
driving back office metrics and key performance indicators.

                While this
industry is operating in a red ocean, there are opportunities to create new
demand, thus a blue ocean in this healthcare sector. Revenue cycling exist due
to the complex rules and regulations governed by our country; however, revenue
cycle is limited in other countries. Places similar to Canada that offer universal
healthcare as an alternative option still accomplish the goals of patient
experience and delivering quality care. Nonetheless, with the growth of this
market in the United States revenue cycle services are safe and attractive to
many providers. Parallon, McKesson, Nagivent, and Conifer Health Solutions all
strive to increase cash collection as an overall goal and help facilities hit
key metrics related to their income statement and patient experience (Valli,
2017) These revenue cycle companies focus on marketing to healthcare executives
of different hospitals in order to gain new business. In this industry, the
buyer group is primarily hospitals, however targeting clinics and urgent cares
could create a new demand and unlocked new customers.

                Hospital
spending can determine if hospitals are profitable and sustainable year after
year. Location and payor mixes can control several financial factors, therefore
if there is an opportunity to minimize cost in another area healthcare
executives are eager to listen. Before revenue cycling is outsourced facilities
mostly have business offices and employees working on site. The manual labor, training,
costs, and inefficient use of time are trade-offs occurring. Once facilities
make the decision to outsource, control is a significant pain point for
customers. RCM is a rational and analytical approach to healthcare, but emotion
and trust could lead to additional sales. Through constant communication and building
strong relationships more business could result. By analyzing this pain point,
what other services could a revenue cycle company offer in order to help reduce
the trust and control factor upfront? 
Revenue cycle companies could start looking into offering the selling of
medical supplies in addition to help reduce expenses for the hospitals. While
this is outside the normal scope of a traditional revenue cycle company, the
new offering could unlock a blue ocean for revenue cycling companies. 

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