Since the mid 90’s, Zimmerman has used revenue cycle management hype cycles to characterize the market’s enthusiasm or “hype” and subsequent adoption cycles of leading best practices in revenue cycle management. Over the last decade, it is clear from our research that revenue cycle reform has taken on consistent themes around key revenue leakage areas among the majority of hospitals nationally. The following is a high level summary of these key leakage themes: 

Mid to Late 1990s

Accounts Receivable Management: Delayed payments were between 70-100 days revenue outstanding for many hospitals.  As a result, reengineering efforts focused on reducing work in process (WIP).  For many hospitals, opportunities existed to reduce active A/R by 15-35% in an effort to be in the mid 40’s days revenue outstanding.

Early 2000s

Payment Discrepancies: Although payment was received faster post A/R improvement efforts, third party payers began denying and underpaying claims for most hospitals.  As a result, efforts shifted to improving processes around payment discrepancies.  Most hospitals were able to see 1-3% improvements in net revenue yield through the adoption of best practices in this key leakage area.

Service Documentation: In almost a parallel effort with payment discrepancies, providers also turned to efforts around improving process related to clinical documentation, charge capture, comparative rate modeling, and CDM maintenance.  Adopting best practices in this area resulted in an additional 1-4% of net revenue yield for hospitals nationally.

Current Hype Cycle

Patient Payment: Currently, patient payment (both Pure and Residual Self-Pay) stands alone as the most compelling (economic and strategic) initiative, when compared to any alternative revenue cycle initiative, yet often Patient Payment does not get prioritized as such.  On average, the patient payment opportunity reflects more than 55% of the total net revenue opportunity for a Hospital, leading to significant and ongoing net revenue lift.  Learn more about Zimmerman’s Patient Payment Blueprint™ and Patient Payment Pathfinder™ research initiatives.

Our research team is currently working on hype cycles that are on the horizon.  Please help us by including your insights on a brief survey.