Revenue Cycle Trends 2023

For hospitals, healthcare systems, and even mid to large physician practices, 2022 was the worst financial year in decades. Healthcare providers already reeling under the impact of the long period of adversity due to COVID-19 were further impacted by inflationary impact and increasing cost of healthcare supplies.

Protecting the revenue and doing more with fewer resources are the central themes on the minds of RCM leaders. The impact of the great resignation has left them short of both administrative and clinical workforce.

2023 promises to be a super-charged year with an increasing pace of consolidation, innovation, and adoption of new ways of doing work. We discuss some of the trends impacting healthcare and the revenue cycle.

1.    Getting the basics right: Healthcare is, was, and will be about the patient.

We have seen much debate about no-surprise billing and financial transparency. Patients seek quick and easy access to information about services performed and corresponding charges, the amount expected to be paid by their insurance company, and the out-of-pocket expenses they must bear. We anticipate significant changes in how healthcare providers interact with patients – scheduling, price transparency, and flexible payment options. The patient access and experience area will see innovative solutions and companies emerge.

We also anticipate increasing consumerism leading to branded healthcare chains, especially in urgent care, mental and behavioral health, and dental services.

2.    Wellness and Value-Based Care

The fundamental premise of value-based care is to shift the focus from volume to value. What is value, and how do you define it? Preventive care cannot be the only determinant of value delivered, and that’s what value-based care promises. Yet, the most fundamental shift has come from wellness chains emerging across the US. Americans are now practicing healthier lifestyles and are likely to live longer, which will lead to significant changes in demand for healthcare.

3.    Labor Shortage

The incidence of burnout amongst doctors and nurses surged due to excessive work hours during COVID and then post-pandemic due to the labor shortage. The labor shortage has led to the following trends.

1. Innovation and outsourcing in clinical documentation. Hospitals and healthcare systems have adopted outsourcing of clinical documentation services such as virtual clinical assistants and medical scribes. With outsourced/offshore labor, they are looking to free up clinicians’ time on clinical documentation.

2. Gig-based Nursing Services. Nursing is moving slowly to be a gig economy job, with many nurses choosing to work defined hours at locations of their choice. They are looking to work only 6-9 months a year, given the strain of nursing jobs. Traveling nurses are one of the indicators of this nationwide phenomenon.

3. Fight for clinical and administrative talent. The fight for clinical and administrative talent is likely to intensify in 2023. We saw as much as 30% of the top executives in RCM and healthcare finance roles switch jobs in 2022, roles traditionally considered highly stable. In 2023, healthcare human resources leaders must work with the finance and clinical teams to ensure the required staffing level.

4.    Remote work and outsourcing

While COVID-19 forced the adoption of remote working lifestyles and technologies across the industry, healthcare decision-makers got the message late. Initially, they let go of their administrative teams, especially the revenue cycle workforce, and when they tried to re-hire, the labor was in short supply. Compounding this problem was that a significant percentage clinical and administrative workforce moved to other gig economy jobs or moved closer to their family members after COVID. The labor shortage is only going to intensify during the next decade.

Healthcare leaders must adopt secure remote technology and outsourcing/offshoring strategies to combat the labor shortage and find the right resources for their clinical and administrative functions.

5.    Financial efficiency

With headwinds of inflation, escalating supply costs, and declining reimbursements, healthcare finance leaders must achieve profitability and find the money to invest in innovative technologies. Below are a few strategies that they are likely to adopt:

1. Defend the revenue. Providers must shift focus to denial prevention to earn the income they deserve for the medical services provided.

2. Arrest revenue leakage. Billing compliance requires close collaboration between coding, revenue cycle, and clinical staff. Effective clinical documentation can reduce denials and curb DNFB issues (Discharges not finally billed) to unlock additional cash. Improved accuracy in billing and coding can yield up to 20% additional revenues for a hospital or a healthcare system.

3. Do more with less. Healthcare providers must pay more attention to many workflow and edit functionalities available in their software. These functionalities can yield additional revenue with less effort and drive focus on reducing aged A/R. Appropriate configuration of available tools can help them equip their workforce to do more and extract the maximum yield from their revenue cycle.

6.    Process automation – AI, ML, RPA, and Autonomous coding

Powerful new-age technologies will help healthcare systems automate monotonous, repetitive billing and coding tasks. Autonomous coding technologies are now ready for practical use. Healthcare leaders must evaluate available options to build or buy automation technologies to drive business outcomes.

7.    Healthcare investments flowing into consolidation and niche capabilities

Private equity players are investing in the following themes which will redefine healthcare of the future:

Healthcare provider space

• Consolidation of large healthcare systems as a response to the rising consumerism and increasing demand for a consistently high-quality workforce

• Home care and DME services as a response to the aging population and increasing demand for remote patient monitoring devices as well as services

• Consolidation of urgent care chains, behavioral and mental health clinics, physical therapy clinics, and

• Value-based care providers and solutions enabling the shift from reactive care to long-term wellness

Healthcare Service provider space

• The emergence of large-scale providers of revenue cycle through consolidation

• Providers of niche solutions such as clinical documentation improvement, utilization management, and analytics

8.    Cybersecurity

With the rise of rogue nation-states and increasing cybercrimes, businesses across industries must invest in cybersecurity. Healthcare is seeing increased adoption of remote working, remote patient monitoring, telehealth, and telemedicine, which make it even more vulnerable to cyber threats. We anticipate healthcare firms investing more in cybersecurity over the next few years. Progressive healthcare RCM service providers have invested in certifications such as ISO27001 to ensure a robust information security management system.

9.    Big tech companies investing in healthcare

All the major technology companies are trying to solve the healthcare cost and quality puzzle in their respective way. Amazon, Google, Microsoft, Oracle, and Apple are all investing in healthcare - developing cloud platforms, investing in niche technologies, developing wearable devices, or promoting telehealth platforms. We anticipate their healthcare investments to amplify, and over the next decade, we see big tech companies playing a very active role in healthcare.

Conclusion

Each of these trends will significantly impact how healthcare is delivered, the careers of people in the industry, how the revenue cycle is managed, and how new companies emerge to solve different aspects of the puzzle.

We hope that by knowing what’s coming, you are better prepared and make suitable investments to prepare your revenue cycle for the future.

We would love to hear from you what you think of this article. Leave a comment or write to us at info@medicalbillingwholesalers.com.

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