61 percent of hospital chief financial officers (CFOs) and business managers in “struggling” hospitals expect to be fired by 2016 due to outdated revenue cycle management solutions, according to a recent Black Book report. The report reveals hospital CFOs could potentially lose their jobs because their outdated revenue cycle management software, staff, and solutions were powerlessly stuck in fee for service mode too long. CFOs self identified as “struggling financially” believe they must leverage new best of breed revenue cycle management solutions including software and outsourced services in order to keep their organizations financially solvent.
“Most hospital CFOs have no choice but to leverage next generation RCM solutions in order to keep their organizations solvent. Increased self-pay volumes, lack of pricing transparency, no patient financial responsibility/estimation technology, and other reimbursement challenges are driving many marginally performing healthcare organizations to the brink. The reimbursement challenges ahead to get paid may require several new RCM applications… failing RCM systems will close marginally performing hospitals for good and will get CFOs fired. Hospital viability has never been more thoroughly secured to a single organizational venture as revenue cycle management transformation,” said Doug Brown, Managing Partner of Black Book.
Hospital CFOs are also concerned the industry trend of replacing chief executives from outside the healthcare ranks will also affect their tenure if their hospital continues to struggle financially.
The report, 2014 State of the Revenue Cycle Management industry features insights from over 2,300 respective hospital CFOs, CIOs, business office managers, technology and financial staffers conducted between June and October 2014. 590 hospital and inpatient organizations from 45 states were represented in the survey.
EHR Implementations Deplete Hospital Cash Reserves
Continued meaningful use expenses for EHR, HIE, analytics, portals and mobile apps are hitting hospitals hard as changes in payment models based on patient compliance, pricing transparency, and population health demand even more capital. 94 percent of surveyed hospital CFOs self-identified as “struggling”, reported that delayed or failed EHR implementations have drastically impacted the organization’s financial position. The depleted cash reserves have forced almost half to postpone revenue cycle management software transformations until 2016. Without adequate capital to purchase the best of breed RCM solutions, CFOs feel making the wrong RCM solution is a threat to their long term job stability.
The revenue cycle software and services grew 13 percent since Q3 2013 reaching $2.3 billion dollars primarily due to business shifts, reimbursement and payment reforms, accountable care participation, ICD-10 coding challenges, physician practice acquisitions, pricing transparency, self-pay collection issues, and overall declining margins.
Other key hospital CFO and financial manager findings include:
– 84% of “negative margin hospitals” are investing in population health, analytics, complex pricing estimation solutions, and RCM “on hold” until at least 2016, in order to fund improvements in surgical and diagnostic patient services, as well as complete patient engagement and EHR implementations.
– 47% of hospital (under 250 beds) CFOs do not intend to let the facility’s legacy clinical system have bearing on their RCM product/system buying decision. 93% of large hospital CFOs do not consider their clinical system vendor to have any influence or advantage over other RCM vendors in the vendor selection process.
– 28% of small and community hospital CFOs feel they will lose their jobs in 2016 regardless of the RCM choices they make in the next 12 months. 11% of CFOs in hospitals and academic medical centers over 250 beds also agree with that prophecy.
– 87% of small and community hospitals anticipate declining-to-negative profitability through 2015 due to diminishing reimbursements, unrecovered collections, and underutilized or inefficient billing and records technology. 21% of large hospitals and hospital systems share these concerns.
– With 57% of surveyed hospital’s bad debt currently coming from outstanding patient balances, 91% of business office managers are on the hunt for complex patient estimation software that involves insurance verification, covered services, covered providers, benefit structures, and pricing transparency.
– 99% of hospital business office managers surveyed agree that determining and collecting patient liability not only affects the hospital’s financial soundness, it also positively impacts patient satisfaction.
For more information on this report, visit http://blackbookmarketresearch.com/