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6 Predictions for the Healthcare Industry and Revenue Cycle Management in 2020

By Shawn Yates | Jan 14, 2020 | RCM

6 Predictions for the Healthcare Industry and Revenue Cycle Management in 2020
The healthcare industry has seen transformational change in recent years. The ‘20s will bring even more change and uncertainty. Economic, market, and regulatory forces will continue to reshape the landscape, making it even tougher to navigate.
With operating margins declining 21% in 2019 (despite positive gains in 2018), providers are struggling to maintain their footing.
In response, many are taking a hard look at their operations, business model, and growth strategies. They’re also embracing innovation as a means of strengthening their financial health and ability to compete.
“Burdened by expensive fixed assets, redundancy, and inefficient utilization levels, health systems need a major course correction if they are to provide 24/7/365 access, shift care to virtual and lower-cost settings, manage new competitive threats, and meet rising consumer expectations. Becoming 2 to 3 percent more operationally fit each year will not keep pace with the rate of change required.” – Geoff Martin, COO & Managing Principal, GE Healthcare Partners
In light of this increasing complexity and financial strain, providers will need to make a bold move in 2020 to improve their operations. Below, I’ve outlined my specific predictions for 2020 and why now is the time for providers to act.

1. Reimbursements Will Continue to Shrink

Healthcare spending is growing out of control; in fact, it’s growing faster than projected GDP growth. According to the Centers for Medicare and Medicaid Services, our national health expenditure is expected to grow 5.5% annually through 2026 and account for 19.7% of GDP by 2026 (up from 17.9% in 2016).
This growth rate is unsustainable. Unfortunately, the budget cuts required to curb healthcare spending will likely take the form of declining reimbursements—an existing trend that will continue into 2020 and beyond.
In a December 2018 survey of 100 healthcare executives, 62% listed declining reimbursements as their #1 organizational challenge. In 2020, that sentiment will undoubtedly spread as providers feel increasing pressure to reduce operating costs and address weaknesses in their revenue cycle.

2. Commercial Carriers Will Continue to Shift More Costs to Patients

Expect to see continued increases in high-deductible health plans (HDHPs) and growth in insurance premiums for 2020. The percentage of workers covered by an HDHP grew to 30% in 2019—a 1% increase over 2018, but more than double the percentage covered in 2010.  This is a continuation of a trend we’ve seen since 2006; there are no signs of this abating, and this growth will continue in 2020.
Insurance premiums have grown 54% in the last 10 years. The average family now must pay over $6,000 a year for coverage, making it tougher for them to pay for unexpected medical bills. According to a 2018 report, 77% of providers indicated it takes more than a month to collect any payment, and over 80% of providers reported being unable to collect $1,000+ within 30 days.
These trends are readily evident in a 2019 survey of healthcare executives, in which 85% identified consumer self-pay as a concern for their organization (see below). In 2020, consumer self-pay will continue to become more prevalent and more of a challenge for providers already struggling to collect payments.
consumer self-pay, healthcare, RCM, 2020
Source: HFMA-Navigant RCM Survey (2019)

3. Retail Clinics and Telemedicine Will Have a Greater Impact

The growth of retail clinics and telemedicine, which has been a major trend over the past few years, will likely accelerate in 2020. You’ll also see an expanding array of available options for consumers. More and more large employers will set up their own worksite clinics, for example, or create special contracts with certain providers.
retail medicine, healthcare, RCM, 2020
This growth in retail, employer-based, and remote healthcare services reflects employers’ focus on productivity and retention and consumers’ desire for immediacy and ease. But as traditional providers’ patient volumes drop, this will further reduce revenue and margins, creating more of a financial strain on providers and forcing them to make changes.

4. The 2020 Election Will Be a Major Turning Point

Democrats and Republicans have differing opinions on what to do with the Affordable Care Act (ACA). Republicans want to continue to dismantle it, while Democrats would either build it back up or go with another alternative like universal healthcare.
No matter the 2020 election outcome, it will be pivotal for the financial environment in healthcare. Either the uninsured will continue to grow to pre-ACA levels, or an enhanced model/new program will have to be paid for—meaning more reductions in reimbursements.

5. Patient Engagement Will Come Into Sharper Focus

When it comes to adopting new technology, healthcare providers have often lagged behind other customer-facing industries. Consumers want and expect a convenient, personalized experience across all brand encounters, regardless of industry.
The pressure is on for healthcare providers to move beyond traditional letters, phone calls, and portals and provide digital communication options that could help improve treatment outcomes and make it easier for patients to meet their financial obligations. Moving forward, expect to see rapid growth in patient engagement platforms that combine more of these services into one offering for both providers and patients.

6. A/R Collector Productivity Will Become a Top Priority

Over the past few years, healthcare providers have focused on automating as many tasks as possible. Automation is key to achieving optimal efficiency, but the bigger issue (and greater challenge) is managing employees in ways that help them be more productive and effective. This is especially true in RCM, on the back end of the revenue cycle.
In 2020, managing A/R collector performance (whether employees are working remotely or on site) will become an urgent priority across the healthcare industry. Providers will increasingly look for ways to give A/R teams more valuable feedback and tools as a means of controlling labor costs, shortening the revenue cycle, and maximizing revenue recovery.
Are you looking to build an accountable, more effective A/R operation? You’ll find the answers you need in our eBook “The Accountable Collector: Transforming Healthcare A/R with One Simple Fix.” Download your free copy today, and start working toward a more profitable year.

 

Disclaimer: Ontario Systems is a technology company and provides this blog article solely for general informational and marketing purposes. You should not rely on the content of this material for any other purpose or as specific guidance for your company. Ontario Systems’ advice, services, tools and products described herein do not guarantee compliance with any law or industry standard. You are ultimately responsible for your own company’s actions and compliance efforts. Because everyone’s situation is different, you must consult your own attorneys, accountants, and/or other advisors to obtain specific advice on your company’s compliance, legal, tax, regulatory and/or other business needs. Despite Ontario Systems’ efforts to provide current and up-to-date information, you need to recognize that the information contained herein may become outdated quickly and may contain errors and/or other inaccuracies.

© 2020 Ontario Systems, LLC. All rights reserved. Information contained in this document is subject to change. Reproduction of this publication is not permitted without the express permission of Ontario Systems, LLC.

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Posted by Shawn Yates

Shawn Yates serves as Director of Product Management for Ontario Systems, defining the company’s strategy for product and service offerings in the healthcare market. With over 20 years of experience managing self-pay receivables and collection operations for a top 20 healthcare system, Shawn’s background also includes working for a national outsourcing company helping clients manage their insurance and self-pay receivables, and Experian Health, the largest data and analytics company in the country.
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