Managing the Revenue Cycle During the Health Crisis: One Financial Leader’s Perspective
For patient care organizations across the U.S., the pandemic has certainly tested the ability of many health system executive leaders to stave off financial disaster. Indeed, the analyses and projections regarding the impact that the public health emergency has and, and ultimately will have, on healthcare system operating margins remain bleak.
Late last month, for instance, as Healthcare Innovation’s Mark Hagland wrote, “a report by the Chicago-based Kaufman Hall consulting firm confirmed what has been understood anecdotally and experientially across the U.S. healthcare system: the COVID-19 pandemic had a devastating impact on hospital operating margins this spring.”
Kaufman Hall’s August 2020 “National Hospital Flash Report,” based on July data from over 800 hospitals, found that hospital operating margins have plunged 96 percent since the start of 2020 in comparison with the first seven months of 2019 as uncertainty and volatility continue in the wake of the COVID-19 pandemic. Notably, the report’s findings do not include federal funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. “Even with that aid, however, operating margins are down 28 percent year-to-date compared to January-July 2019.
Now that in-person visits are getting back on track, the hope is that hospitals will be able to recoup some of the losses that have plagued them for much of 2020. But revenue cycle leaders will need to become strategic and innovative in more ways than ever before. Recently, one such executive, Rick Childs, vice president of revenue cycle at Floyd Health, a three-hospital patient care institution based in Rome, Ga., spoke with Managing Editor Rajiv Leventhal about the pandemic's impact on the revenue cycle, how the organization has stayed afloat and more. Below are excerpts of that conversation.
Financial losses from the COVID-19 pandemic will undoubtedly have lasting effects on providers, though each situation is of course different. How have things unfolded for Floyd Health?
From a pure revenue standpoint, when the pandemic first [hit], cancellations, elective surgeries and even ER volume all really fell off, and that definitely has had an impact that takes time to get over. Back in May, we started ramping back up with elective surgeries, and by July we were pretty much running our normal volumes for elective surgeries. That part has recovered, but ER volume has not. We are not back to our normal volumes, and that will be a new trend—ER volumes will stay down with the increased usage of people going to the actual right place for care, like an urgent care setting and also with telemedicine. Telemedicine is easy and convenient, and people will stick with that when they can.
What strategies have your organization implemented to cut some of those losses down by as much as possible?
We are fortunate that we did not do layoffs or furloughs. We were actually in the midst of our best financial year in our 75-year [history]. Things were going very well when the bottom dropped out. We ended up finishing the fiscal year in the black, so we had a good recovery. A big change for us was that about 75 to 80 percent of people who used to work in the office are now working from home, and that has worked really well.
What are the challenges that arise when your team works remotely and how will this look moving forward?
The big challenge was that we had to adjust very quickly. Most people had desktops [in the office] instead of laptops. So our IT department was able to shift fairly quickly and outfit people with laptops and specialty-type phones if they were call center people that were tied in through their computer, as well as with extra monitors and wireless keyboards. Within two weeks we got everyone home who needed to be home, so that worked out well for us.
How do we change that in the future? We have some people who will stay at home 100 percent of the time. A fair potion of our folks will alternate with another employee, one week in, one week out. We will share desk space and decrease that footprint. We’re creating what we’re calling ‘hoteling space,’ so we have about 350 employees working remotely. Sometimes you do need to come into the office, and people will be able to reserve cubes so they have a landing space when they come in. And you can do those reservations online.
With so many people becoming newly unemployed an uninsured, what has changed in the area of patient billings and collections?
There hasn’t been a drastic change for us, and one reason why is due to what I call our ‘self-paid collections’ or ‘after insurance collections’—so what the patient is responsible for. We already had a program in place for about three years with CarePayment, a [patient financial engagement company] that handles our payment plans and most of our patient collections. They were able to react to what was going on in our environment. When we had folks who were already on a payment plan, for example—maybe they lost their job and need more time—CarePayment was able to shift and gave them an extended period of time to pay their bills. That was already in place and it just kind of fit right in [with the pandemic]. We do see more people asking for payment plans, just because of the financial conditions, and we can react to that since it’s already in place. Our community is aware of that ability, too.
We also have a smaller call center that takes inbound calls, and before we were using CarePayment we struggled to not abandon calls. But now they have very few that ever get abandoned. Yes, there are complaints, but those are [unavoidable], and in the last six months, it’s only been about 0.4 complaints per month, and they are usually handled within 24 hours.
Has federal funding helped?
It absolutely has. When you lose your elective surgeries, that will have a drastic impact. So the funding helped, but it didn’t solve everything since we still lost with that business not being there. If we hadn’t been in such a good financial position [to begin with], maybe that story would have been different. Hospitals that are running on extremely tight margins, and that had the same type of situation with so much volume going away, might have had a more detrimental [outcome].
What advice could you give to healthcare financial leaders as they look to stabilize the revenue cycle?
I am sure everyone is looking at this, but a remote workforce gives you a lot of advantages. You have folks that have children who are home from school, so how do you get around that? When you are remote, you aren’t set to regular office hours. We have people who get up very early and put in several hours and then take a break to handle children who are doing remote schooling. Then they work into the evening, so the eight hour workday might be spread over a 12-hour period. They are dealing with the issues [at home] and keep their employment. That was one way we didn’t have to lay people off and still keep things going. If you’re not looking at remote work, you really need to. We also have people who are over an hour drive away who can work remotely, so that’s a satisfier not having to drive that far every day. And that also gives you an opportunity to hire from a wider market area. We are rural; the biggest closest big city to us is Atlanta, which is 90 mins away.
The other piece of advice would be to stay on top of the regulation changes. Lots of new codes have come out around telemedicine because of COVID, so make sure you are up-to-date with all those changes so that you are billing correctly, and don’t get delays or denials in your payment. You want to keep your cash flow as normal as possible through this event.
