From Outsourcing to Automation, Innovative Strategies to Boost Patient Experience

Updated on January 21, 2023
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Before the COVID-19 pandemic, the health care industry was aware of its inconsistencies regarding reimbursement, patient experience, access to care and more. The pandemic accelerated these issues, requiring these challenges to be addressed more immediately. As a result, the industry made a 180-degree turn to implement telemedicine capabilities and strategize additional methods to stay connected to its patients.

However, despite progress in virtual patient outreach and other areas of overall experience, since March 2020, shrinking margins, increased wage pressures and labor issues have continued to plague the industry at a time when the patient experience is more fragile than ever.

How can a health care organization succeed in providing a great experience for patients on small margins? How can a health care organization grow in an industry that continues to see new disruptors and challenges (including new marketplace competitors, slim reimbursements, higher costs, etc.)? Some leading health care executives, operators and investors are focusing on efficiencies, partnerships, clinical outcomes, technology and more to boost the overall patient experience.

Margin improvement by outsourcing

According to Kaufman Hall, as of October, the median hospital operating margin index was -0.5% (with more than 4% a year earlier). In 2022, high inflation and rising interest rates made it more difficult for organizations to borrow money and to cover rising costs. Services that were once offered in an inpatient setting are now shifting to outpatient (in some specialties), resulting in lower revenues. In addition, organizations that have been receiving government funding over the past few years as pandemic support will no longer receive this aid in 2023.

So how can an organization improve its margin? One successful trend has been outsourcing services. Instead of hiring or paying staff internally, organizations are contracting with external organizations to run their technology and human resources operations, for example, to help reduce costs.

Some health care organizations can also improve their margins by collaborating or partnering with other organizations. According to a recent Forbes article referencing a survey from Market Research Future, the health care outsourcing market is projected to reach nearly $450 billion worldwide by 2023. And a recent survey of more than 500 hospitals and inpatient organizations found that 90% of health care executives are exploring cost savings through relationships with third-party vendors, according to this same article.

Instead of hiring or creating a new service internally that could be costly, health care organizations can collaborate with other competing organizations or third-party vendors to address gaps and inefficiencies. When the collaboration is successful, organizations can streamline operations, reduce overall costs and improve efficiencies, all contributing to patient experience satisfaction.

A clinical team focused on patient outcomes

Along with slimming margins, many health care organizations continue to struggle with hiring and retaining staff. Competition in the industry and additional disruptors have caused nurses and hospital staff to retire, move to another organization, or require higher compensation. With a short staff, many health care organizations have difficulty driving revenue from their current fee-for-service payment model, as it requires them to see many patients. Another issue with short staff is patients are not able to be discharged in a timely manner, which increases the length of stay; this doesn’t translate into additional revenue, and it’s harder to get new patients in the door.

To address these challenges, organizations must assess their current services and review their patient population. Different patients will require different services, so focusing on a common area like primary care will allow an organization to build up a clinical team to help support more patients and build out personalized care plans that will direct each patient to the appropriate services.

Health management is also key to improving patient experience. In a Kaufman Hall report this year on health care consumerism, a key finding was that a “disconnect exists between consumers’ health management activity and their health care providers.” Survey results in the report show 70% of more than 3,500 respondents wanted providers to support health management activities more actively in areas such as nutrition and exercise. This focus moves organizations away from transactional care and more to overall patient outcomes—addressing the whole patient in wellness, care needs and more.

Organizations should work toward structuring a payment model that is less transactional (fee-for-service) and more like a value-based-care model where the focus is on patient outcomes and not patient volume. Patients may respond well when they have a trusted provider and the provider is not just one person, but rather a whole clinical team.

To work toward a value-based-care model, organizations should continue to invest in tools that will help improve scheduling efficiencies and services to connect with patients more regularly and timely. This personalizes the experience for the patient and builds trust with the clinical team.

Adoption of technology and automation

Providers continue to cope with repetitive tasks like collecting patient data, distributing prescriptions, billing, patient onboarding, claims management, and much more every single day. These are critical operational tasks that can be tedious and time consuming. Medical services continue to rise and it’s challenging to maintain the necessary pace of manual tasks for the demand, putting patients and institutions at risk.

The adoption of technology and automation offers a chance to improve patient outcomes by ensuring processes become more effective and efficient. While many industries already use automation, the health care industry has been somewhat slower to adopt. Automated care (from administrative tasks to operational jobs) offers the benefits of reduced costs, lower risk of non-compliance, better quality of care and improved patient experience. Organizations that are slower to adopt technology and automation are more likely to see their patient load remain overwhelming, especially with labor shortages. Enhancing an organization’s clinical team with strong technology and automation will help improve the overall patient experience, reduce redundancies that lead to unnecessary costs and encourage a stronger focus on the quality of care.

While there are often limited funds to purchase new technologies, an effective budget and an understanding of the return-on-investment of technology and automation are keys to success.

Looking forward

The health care landscape continues to evolve. Traditional services and ideals of how patients receive care and how organizations are reimbursed are facing increased challenges. The adoption of technology will remain critical as health care organizations strategize how to increase their slimming margins and fill in the gaps where human capital doesn’t exist. If patients are not getting discharged in an efficient and timely manner and emergency departments don’t have capacity to admit patients, patients will look to seek care elsewhere.

Despite ongoing challenges, however, this is also a time of great opportunity for health care organizations to realign their strategies and think through what type of service provider they want to be going forward. Innovation, partnerships and more are all key for long-term patient experience success.

haas michael
Michael Haas
Health Care Senior Analyst at RSM US LLP

Michael Haas is a technology management consulting manager in RSM US LLP’s health care industry practice. In 2022, he was selected for the firm’s Industry Eminence Program as a senior analyst covering the health care industry, working alongside the firm’s chief economist and other program participants to analyze the trends and themes affecting the nonprofit and education industry and shaping middle market businesses. Michael is based out of RSM’s New York City office.