It’s no secret that, as health system margins have shrunk post-pandemic and payer relationships have worsened, revenue cycle teams have felt the pressure. The Health Management Academy in partnership with R1 set out to understand what challenges Leading Health Systems face within revenue cycle management and how technology investments can alleviate workforce burdens. Here are some of the major takeaways we learned:
CXOs acknowledge the strain of revenue cycle-related duties on their workforce. Complicated payer relationships, combined with rising staffing and technology costs, are tightening margins for health systems. While certain financial metrics are improving, margins are not likely to reach pre-pandemic levels in the foreseeable future. These challenges create significant strain on both workforce and operational efficiency, particularly in revenue cycle management.
CXOs agree that denial and preauthorization challenges from payers continue to plague their revenue cycle. One commonality felt by all CXOs across clinical, tech, and finance roles surrounded payer relationships, as this rose to the top as the largest revenue cycle challenge area and the most urgent challenge to solve. The strain from these payer relationships is directly linked to administrative burden and workforce pressures.
CXOs prioritize addressing administrative burden to tackle payer issues and labor constraints. Administrative tasks, often tied to payer requirements (e.g., coding, preauthorization), add significant workload, regardless of functional area (clinical, tech, or finance). With 57% of CXOs ranking administrative burden among their top three concerns and 23% placing it as their top priority, resolving these challenges is critical. Labor shortages across IT, revenue cycle, and clinical teams exacerbate administrative challenges, and CXOs anticipate this challenge to persist.
CXOs prioritize investments in automation / AI solutions for revenue capture and workflow efficiency, guided by complexity, priority, and willingness to partner. Investment in automation / AI for revenue cycle management is primarily driven by the goals of maximizing revenue capture, with 33% of all CXOs ranking this as their top priority, and improving workflows and efficiencies, with 23% of CXOs selecting as top priority. Despite alignment on prioritization, sequencing of investment in technology solutions varies based on perceived complexity and the health system’s willingness to build, buy, or look externally.
Unfulfilled potential of automation / AI continues, as adoption lags the widespread interest for revenue cycle management. There is growing confidence in the ability of automation / AI to alleviate burdens in revenue cycle management, especially in mid-cycle and front-end areas. However, adoption remains slow due to concerns over costs, integration, and unclear effectiveness. While CXOs acknowledge the potential of automation / AI to reduce workforce burdens, only 8% report active use, and less than a quarter of all CXOs find these solutions effective.
High costs, integration challenges, and varying awareness of effectiveness among CXOs highlight the need for clear success metrics and targeted investments. CXOs are looking to external vendors for support, but there is hesitation to make capital allocations without clearer success metrics and alignment on an investment strategy. Moreover, over half of CXOs are concerned about the interoperability of new solutions with existing systems, highlighting the need for seamless integration to ensure successful implementation and minimize disruption to daily operations.