Ways to Increase Hospital Profitability
The COVID-19 outbreak from the beginning of 2020 is expected to have resounding effects on healthcare facilities all over the country. Private and public hospitals alike are under pressure to continue providing quality healthcare despite losses in revenue, limited supplies for healthcare workers, shortages in critical medical equipment, sharp increases in operation costs (inflated by the overtime and hazard pay for medical staff), and a massive influx of in-patient and out-patient admissions.
Hospitals must manage their expenditures and generate a reasonable profit margin. While tasked to be of service to the public, hospitals cannot operate at a high standard if it keeps losing money year after year. Consequences like stagnant salaries for medical practitioners and personnel, outdated diagnostic and medical equipment, shortages of medicines and supplies, and reduced patient retention rates will become inevitable.
There are many ways for hospitals to gain funding, but arguably the most important is attracting and retaining patients.
Where to Begin?
Discussions about increasing hospital profitability is a sensitive matter because hospitals cannot simply inflate their medical fees and what they charge to patients with Medicare, Medicaid, and private insurance. To avoid controversy, hospitals must first look inwards and look for areas that they can improve and use to turn a profit — not by increasing fees or cutting salaries, but by improving patient experience and satisfaction.
Here are examples of those key areas.
Patients are in a vulnerable state whenever they go to a hospital for medical treatment. In their emotional state, they are quick to form loyalties to people and institutions that helped and gave them stellar care in their time of need. Similarly, poor reception from hospital staff and mediocre care leave a foul taste in the mouth. It is the previous bad experiences (e.g., unfriendly staff, dismal room accommodations, stressful hospital protocols) that stop patients and their families from returning to a healthcare facility.
Improving patient satisfaction should, therefore, be a hospital’s priority. It won’t do to make assumptions as to what will make patients and their families happy, however. Institutions must get credible data to understand where their patients are coming from and come up with solutions that will genuinely improve their experience.
The best way to get information is by getting real-time patient feedback. This is possible with modern Electronic Health Records (EHR) systems: accessible digital platforms where patients can log in and view their medical records and write feedback on the care they receive anytime.
Revenue Cycle Management
Hospitals can step up on their goal of improving the patient experience by integrating the billing process into their EHR. This assures patients of transparency: they can see how the treatments and care they received translate into the billing statement, and where their private insurance or Medicare/Medicaid benefits apply.
The convenience for patients shouldn’t only happen at the end of the treatment, however, but from the moment they approach the reception desk.
Hospitals can make this happen with a well-planned Revenue Cycle Management (RCM) system. It offers many benefits to patients:
- Streamlines the check-in process for patients
- Shortens, if not eliminates, waiting times
- Facilitates online payment of medical bills
- Compiles EHR and financial records in one convenient platform
- Sends important notices to patients through email and text
- Enables patients without family or companions to process themselves in and out of the hospital
RCM makes a patient’s journey to recovery smooth and stress-free, which is in line with the main goal of generating hospital income by improving patient experience. This is why many consider RCM as a revenue-driving tool; it benefits both sides of the healthcare system. By improving patient experiences through RCM, hospitals can enjoy these benefits:
- Higher patient retention rates
- Positive reviews and a positive reputation
- Accurate financial records
- Automatic billing processing
- Fast receipt of payments (when patients settle their bills online)
- All elective procedures are logged and billed to the patient’s account
- All insurance deductibles are recorded and compiled for a seamless claims processing
In a nutshell, RCM boosts patient experience by simplifying medical billing, making EHR data available, and ensuring transparency. At the same time, it streamlines insurance claims processing and tracks revenue sources. With correct implementation, RCM systems can help hospitals receive payments from patients and insurers fast.
Knowing what to do and having the tools to accomplish them is useless if there are no people capable of doing the legwork. EHR and RCM systems are highly efficient but cannot function on their own. Hospitals need to have trained medical personnel and administrative staff to man these tools and use them to full effect.
Many hospitals in the US have yet to adopt modern practices and are still comfortable with the traditional methods for patient scheduling, patient registration, record-keeping, billing, and so forth. Those that have started to integrate EHR and RCM systems are grappling with understanding the technical sides of these platforms and learning how to use them — all on top of their regular, everyday workloads.
Human error, inaccuracies, and delays become inevitable, as a result, defeating the purpose of these hospital management technologies.
Hospitals must invest not only in medical technology but also on its staff. The cost of training medical and non-medical personnel will soon pay off as their new roles will be crucial in revenue generation.
Even as the world moves on to a “new normal” after the COVID-19 outbreak, revenue generation will still be an important concern for hospitals. The three methods in this article will still apply to medical institutions and private practices post-pandemic.