High staffing costs and shortages continue to drag on hospital and health system finances, prompting many healthcare executives to rethink their organizations’ approaches to revenue cycle management (RCM).
Contract labor expenses for hospitals grew 258% from 2019 to 2022, according to the American Hospital Association, amid rising demand for workers and increasing competition with other industries. Rising labor costs create financial challenges for hospitals, as labor (60%) accounts for the largest percentage of hospital expenses, far exceeding supplies (13%) and pharmaceuticals (8%).
Patient Experience Staffing: Limited supply, escalating costs
Among the greatest challenges facing health systems looking to staff up RCM patient experience operations are limited supplies of local labor and intense competition among employers for that labor. When trying to attract qualified candidates, health systems often must go toe-to-toe with multinational corporate behemoths that have far higher labor budgets. In addition, training and retraining staff requires a heavy investment of time, effort, and money. With high staff turnover, the problem is exacerbated and may lead to inadequate service levels.
Staffing shortages can also result in negative healthcare experiences for patients, including longer in-person wait times, longer call hold times, less appointment availability, and delays in receiving care. If left unresolved, these shortages may inevitably lead to lower patient satisfaction scores and reduced patient demand, further harming finances.
These staffing issues and consequences have led health systems to seek out new ways to combine people, processes, and technology to improve scheduling, billing, financial counseling, and revenue management.
Relief through globalization and automation
To overcome staffing challenges, many health systems are looking to outside partners with a combination of U.S. and global workforces to manage specific functions that do not require face to face contact. Experienced, empathetic call agents who understand financial aid, payment options, charity care, and other personalized services are capable of meeting patients’ specific needs. This approach enables hospitals to escape the limitations of their local labor markets by tapping into the expertise of experienced partners offering the potential to lower costs. It also delivers the added benefit of allowing valuable front-line workers to specialize in functions that require face-to-face interactions with patients where they can focus on driving higher-quality care and higher patient satisfaction.
However, call centers that involve a mix of both in-house teams and outsourced vendors sometimes create a fragmented patient experience due to technological limitations and workforce challenges. In contrast, fully outsourced payment partners can boost efficiency, ensuring that all call center agents and information systems have the same, up-to-date patient information, creating more consistency across the organization.
Separately, health systems may lack the funding or technological expertise to maintain pace with the speed of technological innovation in RCM given the need to prioritize clinical areas to remain competitive. This is particularly relevant given the growing use of artificial intelligence (AI) and automation that requires significant investment to develop and implement effectively. In contrast, RCM vendors focus exclusively on the RCM discipline, enabling them to invest heavily in new systems and technologies.
Revenue cycle teams incorporating fully outsourced partners can then take advantage of the AI and automation those partners have developed. By adding AI and automation in this way, health systems gain the ability to direct their limited number of staff towards the specific tasks that require human intervention and decision-making, reducing manual work for these employees.
RCM staffing challenges are likely to persist for health systems amidst increasing competition for labor. These challenges cause issues that can trickle down to patients, resulting in delays to care and payment and diminishing patient satisfaction. Fortunately, many of these problems can be alleviated by single-source RCM vendors, which possess the technology, experience, and skill to streamline and improve the Patient Experience.
Laurence Harris
Laurence Harris is Senior Vice President of Client Delivery for R1. He joined R1 following the acquisition of Cloudmed where he served as Vice President of Operations. Laurence has over two decades of leadership experience in revenue cycle management consulting with a focus on identifying systemic issues that lead to higher costs and lost revenue. Prior to joining Cloudmed, Laurence held leadership roles at Triage Consulting Group focused on delivering best in market client services. He has extensive experience in hospital and physician reimbursement models, RCM operations, payer performance and client relationship management.
