Revenue cycle transformation – A must for healthcare organisations

Creating a blueprint to build a future-ready healthcare sector, the theme of Healthcare Senate 2017, cannot be achieved without  aspects of cost and revenue. The private hospitals have a tall task of ensuring equitable access to quality healthcare at affordable costs.  This, in turn, necessitates a turnaround of the revenue cycles and streams by eliminating flaws, plugging loopholes and deploying efficient systems aided by technology. Therefore, the second panel discussion on the third day of the event centered around the topic, ‘Revenue cycle transformation – A must for healthcare organisations’.

The eminent panel for this session comprised Joy Chakraborty, COO, Hinduja Hospital; Latesh Sen, GM, Costing and Business Analysis with Radiant Life Care; Johar Sabuwala, CFO, HN Reliance Hospital; Anurag Yadav, Group CFO, Gleneagles Global Hospital, and Krishnakumar Dharmaraj, MD & Head, Commercial Clients Sales, South Asia, Standard Chartered Bank.

Moderated by Anurag Yadav, Group CFO, Gleneagles Global Hospital, the experts discussed on improving crucial functions and operations like increasing net revenue, accelerating cash flow, and reducing costs by addressing people, process, and technology components throughout the revenue cycle. He informed the audience and the panelists that the discussion will revolve around the revenue considerations from the phase when the hospital begins operations. The pertinent questions and valid points raised by him helped gain valuable insights from the panelists and raised the level of the discussion.

Chakraborty pointed out that in order to improve revenue cycles, the first step would be putting better protocols in place as far as operations are concerned. He recommended implementation of more standardised systems across the private healthcare sector with similar pricing structure for similar services and healthcare procedures across hospitals. He also advocated the need to be more transparent in terms of operations and data sharing between hospitals to disseminate learnings. He also highlighted that as regulations becoming more stringent and patients become more informed, these measures would prove to be very important to create trust and credibility for a hospital and ensure a steady stream of revenue.

Key takeaways

• Documentation and audits of hospital will bring down wastage of resources and thereby help reduce costs.
• It is important to control important cost drivers in hospitals _  manpower cost, machine cost, and material costs to manage the revenue cycle
• Fintech could be key to effective revenue cycle management

Sen, who represented Radiant Lifecare, an organisation which has received an award for enabling hospitals manage their costs efficiently, shared a lot of invaluable insights on how to achieve financial sustainability without compromising on quality. She highlighted that the government recommends cost audits of hospitals but as a sector we haven’t learned to tackle this activity well. She urged the healthcare leaders to proactively engage in proper documentation of their activities to gain clarity on cost drivers and manage them in a more effective manner. She also suggested the adoption of measures such as an itemized bill for patients, so that they clearly know the cost of their treatment to the hospital. This would also help in negating the accusation of profiteering that is often leveled at private healthcare providers and safeguard the faith of patients.

Sabuwala spoke on the three ‘Ms’ which are important cost drivers in hospitals _  manpower cost, machine cost, and material costs. He also elaborated on the importance of tabulating these costs properly and push for improved efficiency in acquiring and managing each of these factors to efficaciously manage the hospitals’ revenue cycle. He spoke on the need to tighten and modify some of the current mechanisms in the hospitals such as billing and insurance. He pointed out that if the time on these claims are reduced then probably time and thereby cost can be reduced. He gave the call for well-defined and simplified processes with the help of partnerships with organisations like Standard Chartered bank and IT players to gain savings and streamline the revenue cycle.

Krishnakumar gave a very fresh perspective and approached the topic from the position of a partner who can bring in significant benefits to the healthcare business. He explained how his organisation has studied the sector for a considerable time and found a lot of scope to add value to an important sector which plays a pivotal role in the country’s progress. The study also identified pain points and are working on ways to mitigate them. He said that financial institutions, with the help of digital platforms, can help hospitals enable faster realisation of cash, reduce the cost of collection, and ensure better application of funds through faster reconciliation, thereby the flow and utilisation of revenue.

All the panelists urged hospitals to be completely informed about changing regulations and ensuring compliance to avoid legal hassles, take proactive measures to negate factors which adversely affect the efficiency of operations, ensure transparency in operations and regularly measuring performance outcomes to evolve into a future-ready healthcare organisation.