5 Benefits of Outsourcing Your Hospital's Accounts Receivable
Accounts receivable is an area not often considered when purchased services is brought up. This is likely due to the fact that the potential savings hospitals could realize from outsourcing this service is not well understood.
For healthcare organizations with an inefficient A/R infrastructure, billing is often delayed or can be inaccurate. This can lead to a reduced bottom line alongside worsening your patients relationship with your hospital when inefficiencies occur. Without the appropriate A/R structure, administrative issues and redundancies may exist that can have a serious impact on the efficiency of your hospital.
Optimizing your spend management structure can lead to a greater cash flow that is collected faster and at a steadier rate, all the while maintaining a higher standard of service with your patients. There are five primary benefits to outsourcing A/R duties within hospitals:
1. More Advanced Billing & Payment Processes
Outsourcing your accounts receivable department can streamline your billing processes in several ways. Dedicated automatic payment services may be available that can free up your employees time and increase efficiency. There may also be other types of electronic communication options that can increase the diversity of your customer outreach as a supplement to traditional mailing options. Discounted credit card service fees are often offered by outsourced firms, saving your hospital money with each transaction and increasing the overall payment processing speed.
2. Reduced Administrative Overhead
By outsourcing the labor associated with accounting fees, you can significantly reduce your expenses for both your IT and HR departments. Decreasing training costs of employees as well as mitigating costs usually associated with up-front investment can add up in terms of administrative overhead.
3. Bypass the Need for Dedicated Document Management
Document management is an area not often considered when outsourcing is brought up, but seeing savings on warehouse storage fees and rent is a definite upside to having your billing handled by an outside firm. Storage, shredding, printing and scanning are all areas where overhead can be reduced by having dedicated firms with developed infrastructure do the heavy lifting for you.
4. Customizable Solutions
Outside A/R firms can work for you in other ways aside from the typical accounting practices. With experience and systems dedicated to the management and consolidation of documents, data can be collected and reported to give a customized view of your hospitals needs. These reports can be generated to give comprehensive data on your hospital that may require a prohibitive amount of manpower to conduct on your own time.
5. Integrated Collection Services
Part of the infrastructure often utilized by outside A/R firms involves efficient methods of billing and revenue collection. This can make it easier for hospitals to optimize spend management and collect revenue more quickly and may lead to an increase in payments from overdue accounts. It may also have the added benefit of minimizing the damage that overdue accounts can cause to the hospital/patient relationship by having the messy details handled by a third-party.
Maximizing Healthcare Efficiency
By streamlining the A/R process with a dedicated infrastructure, outsourcing can provide a multitude of advantages compared to performing the work in-house. This infrastructure often takes a large amount of time and expense to instigate and is not always possible for smaller healthcare organizations. The increased efficiency offered by this infrastructure means that redundancies can be eliminated, problems are handled more effectively, and cash flow is maximized for the benefit of both your hospital and your patients.
When you think about purchased services, the best-in-class organizations are constantly evaluating whether they should do the service in-house or outsource it. Although this is a cyclical business, we are in a time where outsourcing as much as you can to the experts in that industry typically makes sense financially. The ability to move the insurance requirements for employees to a third party can be reason enough sometimes.