Providers Vary When Measuring Return on Investment of RCM Automation
Almost a third of healthcare financial leaders said they calculate the return on investment of revenue cycle management in-house, while 7.4 percent said their vendor calculates it.
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- Healthcare providers vary widely in how, when, and what they measure for return on investment (ROI) of revenue cycle management (RCM) automation, according to a survey from the Healthcare Financial Management Association (HFMA) commissioned by healthcare operations company AKASA.
HFMA surveyed over 550 chief financial officers and revenue cycle leaders at hospitals across the country between July 8 and August 2, 2022 to assess the adoption of revenue cycle automation.
The survey asked healthcare financial leaders if they actively calculate ROI for the tools they use to automate revenue cycle operations.
Nearly a third (32.7 percent) of respondents said they calculate ROI on RCM automation in-house, while 7.4 percent said their RCM automation vendor calculates ROI. Just over half of leaders said they do not calculate ROI and focus on other key performance indicators (KPIs), such as days in accounts receivable.
Eight percent of respondents said they do not measure ROI for RCM automation.
The survey also asked leaders how often ROI on RCM automation is measured. Almost 35 percent said they measure RCM automation ROI monthly, 26.4 percent measure it quarterly, 6.6 percent measure it semi-annually, and 14 percent measure it annually.
Meanwhile, 18 percent of respondents chose the “other – write-in” option, in which they said the frequency of ROI measurement will be determined once automation is fully implemented or conducted on an as-needed basis.
The survey findings highlight how measuring ROI on RCM automation is not a consistent task for healthcare providers. In addition, vendors seem to have little involvement in ROI measurement, despite being a common source for automation.
According to AKASA, vendors should take an active role in ROI measurement to help providers capture the impact of automating revenue cycle operations.
A separate survey from HFMA and AKASA found that using automation for revenue cycle management could lower hospitals’ cost-to-collect by 0.25 percent. Health systems that used automation reported an average cost-to-collect of 3.51 percent, compared to 3.74 percent for those that did not use automation.
Between 2020 and 2021, the number of health systems using automation for revenue cycle operations increased by 12 percent.
Revenue cycle leaders have said that adopting automation is the key to success as RCM processes expand and staffing shortages persist.
In addition, healthcare providers have increasingly started investing in RCM software to help improve revenue integrity, charge capture, and complex claims. Data from KLAS and Bain & Company found that 45 percent of providers increased software investment over the past year.
