Over the years, St. Clair Hospital (SCH) has implemented several revenue cycle technologies and processes to address rising costs, increased complexity of reimbursement rules and the rise of self-pay and consumer-directed healthcare, which have generated higher co-payments, deductibles and out-of-pocket charges for patients.

However, like most facilities, the 329-bed hospital had mapped technology and subsequent upgrades by bolting them onto pre-existing workflows instead of leveraging information technology to eliminate waste and inefficient workflows. This made revenue cycle management increasingly challenging, which SCH realized after identifying revenue cycle leakage with denials, bad debt, charge capture and underpayments in 2006.

By applying Guiding Project Strategy (GPS) and lean production methods made famous by Toyota Corporation to analyze the loss, SCH concluded it needed to redesign technology and processes from the ground up. For example, it determined it had to integrate and streamline financial reporting to the charge capture process. It also had to correct errors, denials and rework resulting from inaccurate or missing patient demographic and insurance data earlier, rather than later, in the revenue cycle. Billers averaged 10 minutes to identify, research and rectify denials, costing SCH more than $45,000 annually. SCH ascertained that if it collected and verified patient data at the scheduling and registration stages instead of billing, it would save $10 for every dollar it invested. Consequently, it began performing these processes prior to delivering care.

The presenters will describe how SCH used lean production methods to transform its revenue cycle, assess and redesign existing information systems, identify technology gaps, and overhaul workflows from the ground up. They also will discuss how they leveraged these methods to create a self-diagnosing, self-improving and self-correcting culture in which employees and the organization continuously strive to enhance efficiency, cash flow and patient and referring physician satisfaction.

SCH reconfigured its network, interfaces and redesigned electronic patient access and accounting functions related to scheduling, charge capture, claims clearance, insurance eligibility, billing, discharge not final billed, collections and denials management. It upgraded to web-based software in registration that enabled the organization to increase productivity.

As is the case whenever technology and work processes are introduced, staff resisted the changes. A lack of understanding by employees about how their job affected peers in other departments also contributed to the resistance.

To secure buy-in, SCH trained super users for Account Management Patient Financial Management functionality related to revenue cycle processes. These super users trained nearly 110 employees. SCH educated and adopted an open door policy to spur communication. SCH encouraged employees to share recommendations and concerns. Management promptly reviewed, resolved and communicated decisions to staff. The policy, along with ongoing analysis and reporting of performance metrics, allows the hospital to rapidly identify and correct revenue cycle performance problems at individual and enterprise levels.

Since beginning the redesign of its revenue cycle system and processes in 2007, SCH has reaped immediate and steadily accelerating ROI. For fiscal year ended June 30, 2008, SCH:

 Increased net revenue by $1.8 million.
 Slashed accounts receivable (AR) from 32.4 days to 29.3 days.
 Cut outstanding unbilled revenue from 5.7 to 4.5 days of outstanding unbilled revenue.
 Boosted self-pay collection by 36.5 percent or $1.9 million.
 Decreased bad debt from 1.0 to 0.8 percent of gross revenue.
 Reduced denial rate from 1.8 percent to 1.0 percent.

Additional improvements continued into FY 2009, as AR days dropped to 28.7 and denials declined to 0.4 percent. SCH anticipates further gains due to the recent deployment of a scheduling call center, which enables it to schedule, pre-register and collect co-pays with one call.