On July 18th in Boston, I had the opportunity to attend G2 Intelligence’s Lab Leadership Summit: Designing, Implementing & Managing a High-Profit Lab Outreach Program. This conference consisted of a variety of attendees from hospital lab directors and outreach managers, to consultants and industry partners, all connecting with the common goal of discovering how to maximize operational efficiency, improve customer service, boost sales, build revenue, and increase the profitability of the hospital outreach lab. There were some wonderful discussions and topics led by various outreach lab experts and fortunately, I had the privilege of presenting as well. My presentation, "Take Control of Your Laboratory Outreach RCM: How to Gain Visibility and Improve Profitability," focused on three key areas detailed below.
Complexities and Challenges of Lab RCM on Enterprise System
When a lab’s revenue cycle management is being run with an enterprise system, there are a plethora of issues that are likely to arise. In regard to laboratory management, without the expertise of a revenue cycle management system that is specific to lab, and thresholds for automated write-offs, you can almost guarantee a high dollar inpatient and outpatient claim focus. Beyond the management side, your client services and support will be limited as well. This is due to limited fee schedules, lack of/or inflexible client billing options and a scarcity of online outreach client support tools such as invoice delivery and payment, and price inquiry, just to name a few.
While all of this is alarming, one of the biggest challenges labs will face is lack of visibility into specific reporting and key performance indicators. As shown in the diagrams below, the majority of labs are not seriously prioritizing data management, performance measurement, and analyzation. If you don’t have the proper technology specific to lab, this can be a recipe for disaster.
Industry, Regulatory, and Payor Trends Impacting Lab RCM
If you follow XIFIN's Beyond Billing Blog, you know that we have covered this topic extensively. Among the disruptors in the laboratory industry impacting RCM, the most impactful is PAMA. From the amendments to the definition of applicable labs that have drastically expanded the number of reporting labs, to projected cuts on individual test payment rates as high as 15%, it is no secret that labs need ways to mitigate these effects. To gain visibility into how these factors will continue to impact your profits, you must have the proper technology in place that is supported with the right expertise.
Key Performance Indicators to Monitor
Before labs can improve profitability, they must identify the root causes that are inhibiting profits. This can only be done by accurately analyzing data that has the integrity to uncover the true drivers of profitability. For most, this requires a commitment to learning and discussing financials, not just billing, and viewing your lab as a revenue center. Once you are thinking like a business, you can start to drive down costs. Until you have data integrity and analytics in place, what will affect your margins most will be a lack of information.
Ultimately, profitable labs are aware of their key performance indicators. KPI’s for outreach labs include:
In closing, I encouraged the lab directors and outreach managers in attendance to think like a business and ultimately to challenge their current outreach lab RCM situation, particularly if using an enterprise RCM system with enterprise revenue cycle staff.
Ask the question: Do I have access to key performance indicators and the level of visibility needed to optimize my outreach lab business?
Want more information on how to improve your laboratory? Read our white paper, "Diagnostics and Market Disruption: The New Normal" for tips on how to manage your laboratory in today's complex environment.