Beyond Boundaries - The New Era of Healthcare Efficiency

Are you in search of a dependable ally for your healthcare practice? Someone with deep expertise in managing healthcare operations, who can ensure enhanced efficiency and better revenue collection?

Navigating the healthcare sector is challenging due to its complexity and constant evolution. As technological, medical, and administrative innovations emerge, they coincide with significant shifts in global and domestic economies.

Employing business process outsourcing (BPO) within the healthcare domain can significantly refine your operational processes. Healthcare BPO serves as a strategic approach to alleviate your administrative concerns and shields you from the fluctuations of an erratic economy.

This comprehensive guide delves into the intricacies of healthcare business process outsourcing. It encapsulates the advantages and key aspects you must be aware of.

Understanding Healthcare Business Process Outsourcing

When a healthcare establishment, like a hospital, clinic, or laboratory, chooses to assign certain tasks to an external entity, that's healthcare BPO. This entity might be a specialized service provider, a third-party entity, a medical billing enterprise, or a dedicated BPO firm.

A healthcare BPO provider is adept at handling both front-office and back-office functions, which include:

• Operations related to the revenue cycle
• Human resource management and staff training
• Patient and client engagement
• Financial management and accounting
• Logistics and supply chain oversight
• Processing of insurance claims
• Technological and information systems management

Healthcare Entities Benefiting from Outsourcing

Outsourcing is advantageous for all types of medical institutions, ranging from dental practices to ambulatory care centers. Tasks like IT, insurance claim processing, and revenue cycle management are more efficiently executed by specialized external services.

The organizations that particularly stand to benefit from BPO include:

• Residential care homes and facilities providing assisted living services. These establishments face the task of safeguarding confidential patient and resident information, a task made easier with the help of a BPO provider.
• Specialty medical practices. Fields such as orthopedics and oncology depend on BPO for seamless payment processes, billing updates, appointment scheduling, and handling insurance matters.
• General practitioners' offices. For these clinics, external teams efficiently transcribe recorded medical reports into written documents.
• Large hospital systems. These healthcare providers often outsource their IT needs to ensure robust and secure IT infrastructure management, which encompasses hardware, software, data management, networking, and cybersecurity systems.

Healthcare Business Process Outsourcing: Market Analysis and Outlook

The healthcare BPO sector stands resilient, poised for growth even amid economic challenges brought on by a worldwide pandemic.

A forecast from Research and Markets suggests a promising trajectory for the healthcare BPO industry, projecting its value to surge from approximately $312 billion in 2022 to nearly $442 billion by 2026. This reflects a compound annual growth rate (CAGR) of 9.3%. The U.S. market is expected to command a substantial portion, potentially reaching $168 billion by 2026, while China is anticipated to experience the most rapid growth at a CAGR of 10.6% during the forecast period.

Several factors contribute to this optimistic outlook:

• Intensified demands for cost reduction in healthcare delivery and the need for system integration
• Rigorous implementation of governmental mandates like the Patient Protection and Affordable Care Act (PPACA)
• The compulsory adoption of the International Classification of Diseases, 10th Revision (ICD-10), which significantly impacts growth in the U.S. market

The report also highlights the innovative strategies employed by healthcare BPO firms. These range from offering integrated service models associated with insurance underwriting to providing modernized claims processing, analytical services, and alternative payment methods.

Deciding on Outsourced Healthcare Services

Here are ten non-primary operations that healthcare establishments could consider outsourcing for improved efficiency.

1. Revenue Cycle Management (RCM)

Delegating RCM involves enlisting a BPO agency to take on fully or partially the intricate administrative duties that comprise:

• Denial Management: A critical task of BPO specialists in this field involves dissecting the reasons behind claim rejections and discerning patterns to circumvent future refusals.
• Eligibility Verification: By ensuring only clean claims are submitted to insurance companies, the resubmission rate is decreased, and payment collection is streamlined, thereby reducing rejections.
• Medical Coding Optimization: Medical personnel translate clinical narratives into numerical and alphanumeric codes—a crucial step to secure appropriate insurance reimbursement for services provided.
• Charge Capture and Billing: Medical entities document services provided to patients and then proceed with payment requests. BPO teams ensure these records are meticulous and liaise with the billing department for precise invoicing.
• Accounts Receivable Follow-ups: Healthcare groups manage refuted claims and modify them to retrieve full payment from insurers.
• Patient Collections: Insurers often cover part of the patient's medical expenses. The medical institution notifies the patient of the outstanding balance they are responsible for each appointment.
• Claims Review and Submission: "Scrubbing" claims entails verifying data accuracy, amending rejections, and editing claims prior to their dispatch to insurance carriers.

2. Medical Coding

Medical coding is the process of translating healthcare diagnosis, procedures, medical services, and equipment into universal medical alphanumeric codes. The coding professionals extract these details from documentation such as physician's notes and laboratory results.

Every patient visit results in detailed notes by the healthcare provider, which the medical coder then translates into standardized codes. To maintain accuracy and compliance, coders must be knowledgeable about current coding practices, regulatory requirements, and industry guidelines.

Medical coders collaborate closely with healthcare providers to accurately represent the patient care provided. They meticulously review documents from surgeries and other medical procedures to assign correct coding.

Healthcare providers utilize several coding systems, including:

• Current Procedural Terminology (CPT): These codes, comprising numbers or alphanumeric characters (e.g., L4386, E0118, and 90387), are allocated to each diagnostic, therapeutic, and surgical service. They are used by insurance companies to determine the payout for services rendered to a healthcare facility or patient.
• International Classification of Diseases (ICD): Distributed by the WHO, these diagnostic codes are essential for disease classification. The ICD is periodically revised, with ICD-11 being the latest iteration as of January 2022.
• Diagnosis Related Group (DRG): Employed by both public insurers like Medicare and Medicaid, as well as private insurers, DRGs categorize hospitalization expenses and assist in the calculation of the costs that an insurer will cover for a patient's use of medical services and facilities.
• Healthcare Common Procedure Coding System (HCPCS): This set of codes specifies the services, procedures, supplies, and products available to health insurance beneficiaries.

3. Medical Billing

Medical establishments use specialized software to create superbills and file insurance claims. The task involves sending these claims to insurance entities and governmental bodies to secure compensation for services rendered to patients.

Due to the intricate and meticulous nature of medical billing regulations and policies, billers need to continually adapt billing practices to avoid mistakes and adhere to the latest changes.

By outsourcing medical billing, healthcare institutions leverage the proficiency of BPO providers. These providers are entrusted with accessing patient information, filing claims with insurance bodies, and ensuring the follow-through of payments until dues are fully cleared. Outsourcing simplifies the reimbursement process, mitigates the risk of non-payment or rejections, and generally improves the efficiency of the billing cycle.

The duration of the billing cycle can vary from a few days to multiple months, contingent on the efficacy with which a BPO firm processes claims and secures payments.

4. Data Entry

Medical facilities often outsource the task of managing extensive medical records for data entry, ensuring continuous oversight and current information. BPO companies handle the input and processing of this data into their digital systems.

Key categories of medical information include:

• Health insurance details, which cover the total or a portion of the patient's healthcare expenses.
• Clinical history records, encompassing a patient's health journey, prescribed treatments, test outcomes, and medical evaluations.
• Patient testing information, which documents all testing conducted from admission to discharge.
• Lab reports and requests, which involve analyses of biological samples such as blood, urine, or tissue.
• Medication inventories and prescriptions, which track pharmaceutical supplies, including the status of medications whether intact or in use.
• Nursing logs and progress reports, offering comprehensive overviews of patient care, treatments administered, and recovery status.
• Patient evaluation documents, used to assess patients and ascertain their likely diagnoses and treatment plans.

5. Medical Transcription

For more efficient record-keeping, healthcare providers opt for text documentation over voice recordings. Transcription, however, can be a laborious task that detracts from patient care.

To alleviate this strain, medical organizations often outsource transcription to BPO services. These providers convert audio files into written documents, allowing healthcare practitioners to concentrate on direct patient care.

6. IT Functions

Healthcare entities frequently engage third-party service providers for their information technology needs. These BPO firms offer teams of IT professionals skilled in digitalization and technical support.

Managed IT services by BPOs encompass a variety of areas, including:

• Management of electronic medical records
• Maintenance of patient database systems
• Administration of electronic billing and payment infrastructures
• Implementation and support of cloud computing solutions
• Overseeing coding and billing software systems

For healthcare facilities to remain competitive and ensure superior patient care, adopting advanced technology is essential. IT outsourcing professionals specialize in areas such as cybersecurity, network administration, and technical support services.

7. Supply Chain Management

In outsourcing supply chain management, healthcare providers entrust the logistical aspects of their supply chain to BPO experts. This process encompasses:

• Sourcing necessary materials and products
• Procuring the right resources
• Managing logistics
• Ensuring timely delivery to consumers or healthcare professionals

Given the expansive and intricate nature of the healthcare supply chain, a BPO partner effectively orchestrates the supply-demand balance among various parties involved.

8. Finance and Accounting

Healthcare organizations often outsource finance and accounting to specialized service providers capable of managing a range of fiscal tasks. This allows healthcare entities to access expertise in various financial operations without maintaining an extensive in-house team. The roles filled by a BPO firm in this domain typically include:

• Accountants who manage and examine financial records
• Financial analysts who evaluate financial data and trends to support business decisions
• Data analysts who scrutinize financial figures for actionable insights
• Debt collection experts who pursue overdue payments
• Insurance claims processors who handle the submission and follow-up of insurance claims
• Payroll processors who oversee employee compensation
• Tax auditors who ensure compliance with tax laws
• Accounts receivable specialists who track and manage money owed to the healthcare provider
• Budget planners who devise and maintain financial plans

By outsourcing these functions, healthcare providers can improve their financial operations, increase revenue, and stay current with the latest financial technologies and practices.

9. HR and Personnel

Healthcare institutions may also outsource human resources tasks to third-party companies. Outsourced HR services can encompass a variety of responsibilities, such as:

• Conducting the recruitment process, including screening, interviewing, and hiring
• Managing employee work schedules and payroll
• Administering benefits and compensation packages
• Ensuring compliance with legal and regulatory workforce requirements

The HR tasks that are outsourced often involve routine, process-driven work. By delegating these duties, healthcare organizations can leverage the expertise and technology of BPO firms to enhance their HR functions.

10. Customer Relationship Management (CRM)

CRM in healthcare involves managing interactions with current and potential patients to provide accurate information, support, and insights to enhance patient care and service. Healthcare providers often partner with external customer service specialists to attract new patients and improve communication with existing ones, which is crucial for maintaining and expanding their patient base.

A BPO company employs healthcare CRM software that complies with industry security standards. Such technology enables the healthcare provider to:

• Securely store and organize various types of patient information
• Automate marketing and sales efforts
• Improve patient acquisition, service, and engagement

Outsourcing CRM allows healthcare organizations to focus on their core services while BPO firms handle the complex and critical task of patient relationship management.

Advantages of Business Process Outsourcing for Healthcare

1. Scalable Operations: Healthcare organizations can benefit from the scalable solutions that BPO providers offer. This scalability allows practices to adjust their staffing needs in response to patient volume and workload, thus optimizing costs. For example, during peak periods, a BPO can supply additional resources to handle increased patient visits and billing tasks. Conversely, they can scale down when demand is low, helping to manage expenses effectively.
2. Reduced Billing Errors: With specialized training and expertise, BPO professionals can enhance the accuracy of medical billing. This reduction in errors minimizes claims rejections and delays, which can be financially detrimental to healthcare organizations. By ensuring that claims are processed correctly the first time, BPOs help avoid patient frustration and the costs associated with correcting billing mistakes.
3. Cost Savings: Outsourcing can lead to significant cost reductions by eliminating the need for investment in infrastructure, technology, and training that an in-house team would require. Healthcare providers can save on the overhead costs associated with additional office space, equipment, and insurance. These savings can then be redirected towards other areas within the organization that directly impact patient care.
4. Assured Compliance: The complexity of medical coding and billing compliance, with ever-evolving regulations and policies, can be managed more effectively by a BPO provider. They have the resources and focus to stay up-to-date with the latest changes, ensuring that healthcare organizations avoid penalties and fines associated with non-compliance.
5. Various Communication Channels: A seasoned BPO firm can offer multiple communication channels to cater to patients' preferences, ranging from traditional phone calls and SMS to email, VoIP, live chat, social media, and self-service portals. This multichannel approach can improve patient satisfaction by providing them with the convenience of choosing their preferred method of communication.
6. Improved Revenue Collection: BPO companies that specialize in handling insurance claims and patient payments can enhance revenue collection. By diligently pursuing outstanding claims and ensuring that billing is done accurately, these firms can improve cash flow and minimize delays in payment, contributing to a healthier financial status for the healthcare provider.
7. Increased Focus on Patient Care and Service: Delegating non-core functions to a BPO allows healthcare providers to concentrate on their primary mission: delivering high-quality patient care. This shift in focus can lead to better patient outcomes, increased satisfaction, and loyalty, ultimately contributing to the growth and competitiveness of the healthcare practice.

Potential Pitfalls of Outsourcing in Healthcare

There are several challenges that can arise with the decision to outsource in the healthcare industry, and we’ve pinpointed three primary concerns:

1. Diminished Oversight:

Entrusting tasks to an external organization results in a transfer of operational control to achieve mutual objectives. There’s a chance that the external partner may not adhere to your internal protocols and instead, apply their methodologies.

The ability to maintain your desired level of management is compromised when the workforce is remote; direct training and monitoring are not feasible.

In comparison, an in-house group is within arm's reach, allowing for swift and direct resolution of any arising matters.

2. Unanticipated Expenses:

Certain outsourcing vendors may not be upfront about all costs initially, or they might withhold detailed information about their pricing structures and additional fees.

These unforeseen expenses are tricky to predict and can encompass a range of issues from termination charges to unexpected legal fees, which can strain your budget and strain the partnership with your outsourcing service.

Providers might also claim a cut of the revenue. The greater their success in recouping funds on your behalf, the larger the slice they might claim. Start-up fees for activities like report generation and early termination penalties are other possible concealed charges.

3. Security Concerns:

Safeguarding sensitive patient data is paramount when engaging a third party for healthcare operations.

Integrating your systems with an external provider increases the risk of data breaches or cyber incidents, a prevalent threat for businesses across all sectors.

Furthermore, privacy and confidentiality take on heightened significance in healthcare due to the handling of personal and sensitive patient details. Without rigorous security measures from the provider, data leakage and theft pose significant risks.

Concluding Thoughts

Despite these potential drawbacks, the advantages of outsourcing in the healthcare field often surpass the risks. A growing number of healthcare institutions are seeking out BPO services to bolster patient care and services.

As the healthcare outsourcing market flourishes, it is critical to choose wisely. Opt for a well-established firm, well-versed in your operational needs and focused on aligning with your goals.

Atento, a premier customer service outsourcing firm, specializes in assisting businesses in automating their customer service operations, enhancing efficiency, and cutting costs. Reach out to our experts to explore how we can assist you.

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