A large health system with 25 days in accounts receivable can be burning $10 million a month on work that never generates a dollar. By traditional metrics, such a practice may appear healthy, but the reality is far from it. Matt Seefeld, CEO of revenue cycle technology company MedEvolve, calls the gap between these metrics and reality the “touch tax”: the mountain of staff work that goes into claims without ever producing revenue.
The Problem with Traditional Metrics
Practices have long tracked denial rates, days in AR, and collections, but these metrics are lagging indicators that don’t tell the whole story. According to Seefeld, these metrics are subjective and only show where a practice has been, not where it’s headed. He believes that the industry’s reliance on these metrics is misleading and can lead to practices appearing healthier than they actually are.
Seefeld has 27 years of experience in the revenue cycle industry, having started his career in consulting at Stockamp & Associates, PricewaterhouseCoopers, and Deloitte before building software companies. He argues that the traditional metrics used in the industry are outdated and don’t account for the complexities of modern healthcare, such as physician compensation models.
The Touch Tax
The touch tax refers to the enormous amount of work that goes into getting claims paid, without actually driving revenue. Seefeld explains that the practice management and EMR companies were never designed to measure every touch it takes to get a claim paid, from the time a patient enters the healthcare continuum to the time a claim is paid.
MedEvolve has developed proprietary leading indicators that can help practices identify where they’re headed, rather than just looking at where they’ve been. These indicators include the percentage of avoidable touches and the first touch payment rate. Seefeld believes that by focusing on these leading indicators, practices can improve their revenue cycle and reduce waste.
Avoidable Touches
Avoidable touches are a major problem in the revenue cycle industry. Seefeld defines avoidable touches as those that don’t drive revenue.
The Impact on Physicians
The revenue cycle crisis is having a significant impact on physicians. Seefeld believes that physicians need to be on the offensive and challenge companies that claim to have solutions to the revenue cycle crisis. They need to ask tough questions, such as how these companies train their models on payments and ensure that physicians get paid.
Related: Indonesian Journal Of Pharmacy
In the middle of this crisis, it’s worth noting that the revenue cycle industry is not alone in its struggles. Other industries, such as finance and banking, have also had to adapt to changing regulations and technologies.
The Role of Automation
Automation is often touted as a solution to the revenue cycle crisis, but Seefeld believes that it’s not a silver bullet. He argues that automation can actually make the problem worse, by taking humans out of the process without ensuring that payments are made.
MedEvolve is working to address this issue, and Seefeld believes that automation needs to be done carefully, with a focus on training models on payments and ensuring that physicians get paid, similar to how sustainable luxury is promoted.
As the revenue cycle crisis continues to affect healthcare providers, it’s clear that something needs to change. Seefeld believes that by focusing on leading indicators and reducing avoidable touches, practices can improve their financial health and provide better care to their patients.
It’s a complex problem.
But one that can be solved with the right approach and a willingness to adapt to changing circumstances.
