Revenue Cycle Management - Hype
As per me Revenue cycle management is another hype created by general purpose MBA consultants who have no idea about Healthcare. Its another hype just like HIPAA.
Healthcare system is focused on clinical, lab, rad operational issues. The IT and Consulting budget of a hospital cant be more than 10% of the total outlay; this mostly falls short for the core IT issues such as HIS/EMR/EHRS and clinical, lab, rad operational issues. Who has the budget for Revenue cycle management? Besides RCM doesn't make sense in Healthcare at all, because of the nature of the business.
How can you control the number of consumables used by the surgeon? Should he be counting the consumables or counting the minutes he has to get the patient back? Even the most experienced cardiac surgeon can't accurately predict the length of stent required in stent angioplasty. Even the most experienced orthopedic surgeon cant accurately predict the number of holes plate required for surgical reduction of bone fracture. So who pays for the stents or plates that were opened but not used/wasted in the surgery? Till date there is no way to exactly predict Disease outbreaks, then how can you ever predict the required medications? When you cant predict the variables, then how can you strictly monitor the cost and manage the revenue cycle?
How can you make surgeons use the most economical material and not allow him to decide his best way of doing surgery? Innovation in healthcare happens in the doctors office and surgeons theatre, and not in a lab environment like other industries.
I can go on with examples of why RCM doesn't make any sense in healthcare. But I feel its high time the generalist MBA consultants realize that Healthcare is different. Its time for Healthcare professionals to stop listening to generalist MBA consultants who bring ideas from other industries and then blindly try to force it on Healthcare.
Bottom line, you cant control something that you cant predict. Therefore dont apply the revenue cycle management techniques blindly taken from services, FMCG or manufacturing business.
Healthcare system is focused on clinical, lab, rad operational issues. The IT and Consulting budget of a hospital cant be more than 10% of the total outlay; this mostly falls short for the core IT issues such as HIS/EMR/EHRS and clinical, lab, rad operational issues. Who has the budget for Revenue cycle management? Besides RCM doesn't make sense in Healthcare at all, because of the nature of the business.
How can you control the number of consumables used by the surgeon? Should he be counting the consumables or counting the minutes he has to get the patient back? Even the most experienced cardiac surgeon can't accurately predict the length of stent required in stent angioplasty. Even the most experienced orthopedic surgeon cant accurately predict the number of holes plate required for surgical reduction of bone fracture. So who pays for the stents or plates that were opened but not used/wasted in the surgery? Till date there is no way to exactly predict Disease outbreaks, then how can you ever predict the required medications? When you cant predict the variables, then how can you strictly monitor the cost and manage the revenue cycle?
How can you make surgeons use the most economical material and not allow him to decide his best way of doing surgery? Innovation in healthcare happens in the doctors office and surgeons theatre, and not in a lab environment like other industries.
I can go on with examples of why RCM doesn't make any sense in healthcare. But I feel its high time the generalist MBA consultants realize that Healthcare is different. Its time for Healthcare professionals to stop listening to generalist MBA consultants who bring ideas from other industries and then blindly try to force it on Healthcare.
Bottom line, you cant control something that you cant predict. Therefore dont apply the revenue cycle management techniques blindly taken from services, FMCG or manufacturing business.
posted by robusthealth at
12:35 AM
4 Comments:
Well, what you posted couldn't be further way from the truth!!
Probably because your idea of what Revenue Cycle Management constitutes is flawed.
RCM is a term of tremendous industry relevance in the US. As a very simplistic example, you walk into a hospital, pay your co-pay, swipe you insurance card, get treated and walk out. The hospital them jumps through a zillion hoops before it collects the money from the insurance carrier. So since the point of adjudication is not the point of service, Cash Flows are always under tremendous pressures in a hospital. So you hear about hospitals going belly up all the time in the US.
The umbrella for all of activities performed to collect the revenue is collectively called RCM. There is no department more important to a hospitals's finacial stability that the RCM dept.
This is not the case in India where insurance is actually reimbursement. The point of adjudication is almost always the point of service. Insurance itself is very nascent at <2% ( although picking up).
So, i completely fail to undersatnd why you would call RCM a hype????
( You can choose not to post this)
~Bhaskar
By
Anonymous, At
August 21, 2008 at 2:47 AM
I think neither the govt nor the insurance companies bear the cost.
In the first case, it's tax dollars and in the second, it's insurance premiums.
By
Anonymous, At
August 21, 2008 at 2:55 AM
Dr. Gupta....Revenue Cycle Management is exactly that...managing the Revenue Cycle. What you are actually talking about is the Supply Chain Management side of the transaction.
Book the revenue and the receivable at the point of Adjudication. That's about as complete a picture of the Revenue that the hospital will be able to portray (not withstanding what the payment cycle or the percentage of uncollectibles will be - which could be built into the model).
What the Hospital could do, based on historical data, is create statistical models for each of the procedures that had been performed. That data is ALREADY there, and it's 100% accurate. That's where you create a "reasonable" prediction of what any given procedure will benefit/cost the hospital.
As far as budgetary concerns go...a budget is simply a SWAG. Administrators should only use this as a tool to understand what potentials are, not actuals. Administrators can't predict the number of patients that will be seen...but they can predict how much $$ the hospital has to generate in order to stay alive. This is where they must lean on their doctors to drive additional procedures out of the indications they see in their patients.
To me...this is where we as Healthcare IT folks, have the ability to help these administrators predict revenue/costs with our statistical modeling....that's if you want to squeeze as much work out of the information you control as you can.
By
Anonymous, At
October 7, 2008 at 3:24 AM
Thank you for the info. It sounds pretty user friendly. I guess I’ll pick one up for fun. thank u
Revenue Cycle Management
By
Unknown, At
January 9, 2012 at 1:06 PM
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