How Outsourcing Revenue Cycle Management (RCM) in Healthcare Can Boost Employee Engagement
How Outsourcing Revenue Cycle Management (RCM) in Healthcare Can Boost Employee Engagement
Outsourcing revenue cycle management (RCM) has become an increasingly popular strategy among healthcare organizations looking to optimize financial operations, reduce costs, and improve overall efficiency. While the economic benefits of outsourcing are well-established, there are concerns about the potential impact on employee morale.
With the ongoing staffing crisis in our industry, the transition to an outsourced RCM healthcare model can raise questions about job security, staff roles, and overall employee engagement. However, when managed effectively, outsourcing can boost operational success, employee engagement, and job satisfaction.
Understanding the Shift to Outsourced RCM
Revenue cycle management is a critical function that encompasses all the administrative tasks necessary to manage the financial processes of a healthcare organization. This includes patient registration, insurance verification, medical coding, charge capture, claims submission, payment collection, and accounts receivable management. Each step is crucial to ensure that healthcare providers are reimbursed appropriately for the services rendered. Accurate and efficient RCM processes are essential for maintaining the financial health of healthcare organizations.
The process begins with patient registration, where key demographic and insurance information is collected, ensuring that the healthcare provider has all the data required to initiate billing. Once a patient is registered, the next step is coding, where medical coders assign specific codes to diagnoses, procedures, and services based on clinical documentation. Accurate coding is essential because it directly influences reimbursement from insurance companies and other payers.
Traditionally, healthcare organizations employ large, dedicated teams responsible for managing each step of this cycle, from patient registration to the final payment collection. These teams ensure that each claim is submitted accurately and on time. However, with the growing complexity of healthcare regulations, frequent updates to billing codes, and the increasing demand for operational efficiency, many healthcare organizations are opting to outsource these functions to third-party partners. Outsourcing allows these organizations to tap into specialized expertise and technologies, freeing up internal resources to focus on patient care and other core functions.
When hospitals and healthcare organizations outsource their RCM processes, they partner with external vendors who manage these tasks on their behalf. This includes everything from patient registration and verification of insurance eligibility to medical coding, claim submission, payment collection, and accounts receivable management. Outsourcing these functions means that the external vendor assumes responsibility for ensuring claims are coded correctly, submitted promptly, and followed up on to ensure timely payment. These third-party vendors often have access to advanced technology, specialized knowledge, and best practices that can improve efficiency, reduce errors, and increase the likelihood of successful reimbursement. In doing so, outsourcing RCM provides healthcare organizations with the benefit of a streamlined revenue cycle while minimizing administrative costs. This allows healthcare providers to focus on their primary mission—delivering high-quality patient care—without sacrificing financial stability.
While the decision to outsource RCM can have significant positive impacts on the bottom line, it has an unfounded reputation for potential disruptions for existing staff. Employees may feel uncertain about their future roles or fear job loss. In such an environment, it’s important for healthcare leaders to take a proactive, employee-centric approach to minimize dissatisfaction and maintain engagement during the transition.
The Link Between Outsourcing RCM and Employee Engagement
Employee engagement includes the emotional investment employees have in their work and their level of enthusiasm for contributing to the organization’s goals. Engaged employees are more likely to be productive, stay with the company long-term, and positively impact patient care and organizational performance.
Outsourcing, when approached strategically, can foster greater employee engagement in several ways:
Allowing Staff to Focus on Higher-Value Tasks
One of the most significant benefits of outsourcing RCM is that it frees up time and resources for in-house staff. Rather than spending time on administrative tasks like billing, coding, and claims follow-up, employees can focus on higher-value work that directly impacts patient care or departmental goals. This shift can increase job satisfaction by allowing staff to concentrate on more meaningful tasks that they find rewarding.
For example, coders and billing specialists can move from performing routine tasks to engaging in more complex coding challenges or quality improvement initiatives, enhancing their professional development and sense of accomplishment. When staff members feel that they are contributing at a higher level, their engagement and job satisfaction are likely to increase.
Enhancing Career Development Opportunities
Outsourcing RCM can also lead to increased career development opportunities for in-house staff. By partnering with outsourcing vendors, healthcare organizations can access specialized training programs, advanced technologies, and new skill-building opportunities that may not have been available internally. This exposure to new practices and technologies can enhance employees’ skills, making them more competitive in the healthcare job market and better positioned for career advancement.
Additionally, outsourcing allows in-house teams to collaborate with external experts, learning best practices and gaining insights that can further improve their performance. This focus on professional growth can increase employee engagement by demonstrating that the organization values their development and is invested in their future success.
Improved Work-Life Balance
The stress and burnout that often accompany in-house RCM operations can negatively impact employee engagement. Outsourcing certain functions can help alleviate this burden, providing employees with a more manageable workload and a healthier work-life balance. This is particularly critical in an industry where employee burnout is a growing concern.
Burnout can lead to coding and billing inaccuracies. In our Coder Mentoring Case Study, the data showed that the client’s inpatient coders undercoded encounters by $60,000 per quarter and overcoded by $55,000 per quarter on average. With the help of additional training, coaching, and Q&A sessions, these inpatient coders’ MS-DRG coding accuracy increased by approximately 13% from 83.5% to 96.4%.
Outsourcing can also allow for more flexible scheduling and reduce the overtime required to meet the demands of a busy revenue cycle department. For example, when one client was struggling to manage a large coding backlog due to lack of experienced staff members, YES consultants stepped in and reduced their backlog by 86%. By helping employees avoid excessive work hours and reduce stress, outsourcing can improve morale, making staff feel more engaged and motivated in their roles.
Managing Employee Transitions During Outsourcing RCM Healthcare Services
While outsourcing RCM can provide substantial benefits, the transition process can be challenging for employees. Staff members may feel uncertain about their future, and there may be resistance to change. However, with a thoughtful, employee-centric approach, healthcare organizations can navigate these challenges and maintain strong engagement throughout the transition.
Communicating Transparently and Early
The key to maintaining employee engagement during an outsourcing transition is clear and transparent communication. Healthcare organizations must ensure that employees understand the reasons for outsourcing, the expected benefits, and how their roles will evolve. Engaging employees early in the decision-making process and offering open lines of communication can help mitigate feelings of uncertainty and insecurity.
Leaders should also explain the long-term vision for the outsourced RCM function, emphasizing how the change will enhance overall operational efficiency and create new opportunities for growth. When employees understand the broader goals and how they fit into the plan, they are more likely to feel engaged and supportive of the transition.
Providing Support and Training
Another important strategy for boosting employee engagement during outsourcing transitions is to provide ongoing support and training. This ensures that staff members have the tools and resources they need to succeed in the new structure. Training can help employees understand how to collaborate effectively with outsourcing vendors and adapt to new processes and technologies.
In addition, healthcare organizations can offer career development programs and mentorship to help employees navigate the transition and explore new opportunities within the organization. Investing in staff development during this time demonstrates a commitment to their future success and helps build loyalty and engagement.
Incentivizing Retention
In some cases, outsourcing may lead to changes in staffing levels or restructuring of teams. To prevent disengagement and ensure retention, organizations can offer incentives such as retention bonuses, job guarantees, or opportunities for employees to transition to new roles within the organization. Recognizing and rewarding employees for their continued commitment during the transition can help reduce turnover and maintain morale.
How Employee Engagement Affects Financial Performance
The impact of employee engagement extends far beyond morale – it can directly influence a healthcare organization’s financial performance. Engaged employees are more productive, more likely to provide quality care, and less likely to leave, reducing turnover and associated costs. They are also more likely to take ownership of their work and strive for continuous improvement, which can lead to better financial outcomes.
Outsourcing revenue cycle management, when done with a focus on your current workforce, can result in improved efficiency, reduced billing errors, and quicker claim processing. These operational improvements directly contribute to the financial health of the organization. Furthermore, a well-engaged workforce is better equipped to adapt to changes in the revenue cycle process, leading to smoother transitions and stronger performance over time.
For healthcare leaders interested in learning more about how outsourcing can impact employee engagement and revenue cycle management, be sure to check out our outsourcing cost comparative analysis. Our consultants are ready to discuss your goals and challenges – fill out the form below to schedule your free consultation.
