An Interview with David Kirshner
During our conversation with David Kirshner, former CFO of Boston Children’s Hospital, we gained valuable insights into what pediatric hospitals should be doing to position themselves for success in the revenue cycle. With his extensive experience in financial leadership within the healthcare industry, Kirshner sheds light on the strategies and approaches that can help pediatric hospitals navigate the evolving landscape and optimize their revenue generation.
According to Fitch Ratings1 there has been a significant decline in cash flow metrics for children’s hospitals in 2023 – can you explain why this is?
Fitch’s recent rating commentary highlights the significant emphasis on the decline in cash flow, further exacerbating the financial stressors faced by children’s hospitals. The increasing costs of doing business, including escalating labor and supply expenses, are outpacing negotiated rate increases. In this challenging economic environment, revenue cycle leaders must leverage the power of artificial intelligence (AI) and automation to alleviate some of these stressors. Automation can streamline labor-intensive tasks, minimize errors, and optimize revenue generation. AI-powered algorithms can identify patterns and trends in data to better manage the workforce and to level the playing field with payers. With automation and AI as strategic solutions, children’s hospitals can navigate the current and future economic landscape more effectively and safeguard their financial stability.
How does this decrease compare to other hospitals with a broader patient mix and the challenges they have been facing over the last few years?
On average, children’s hospitals face a payer mix where nearly 50% is comprised of state Medicaid. Unfortunately, Medicaid historically offers minimal or no rate increases for both inpatient and outpatient care. Additionally, there are concerns about how Medicaid Managed Care Organizations (MCOs) manage access to procedures. A recent report by the Office of Inspector General revealed that Medicaid MCOs denied over 12% of prior authorization requests2. Therefore, besides the concerns about rate increases, there are also delays in access and overall slowdowns in the revenue cycle, which significantly impact many pediatric hospitals.
Describe some of the unique characteristics of children’s hospitals that present different challenges in managing the revenue cycle operations than other health systems.
Children’s hospitals have unique characteristics that present challenges in managing revenue cycle operations compared to other health systems. These hospitals provide innovative care to critically ill children on a regional or national scale. However, due to the necessity of specialized physicians, clinicians, and supplies, even lower acuity care can be expensive. This leads to heightened scrutiny from payers and additional financial pressure on health systems. Children’s hospitals must engage in time-consuming negotiations with payers to ensure widespread acceptance and utilization of procedures and clinical techniques. They also face potential inflated denials or patient reclassification, such as shifting from inpatient to observation status.
In what ways can technology be leveraged to streamline and enhance the revenue cycle management processes in a children’s hospital?
Children’s hospitals are increasingly turning to technology, specifically AI, to optimize their revenue cycle management processes. One key technology being utilized is process mining, which allows hospitals to gain insights into their revenue cycle workflow processes. By employing process mining, hospitals can identify bottlenecks and gaps in workflows, enabling managers to prioritize and address problem areas promptly. This technology also helps hospitals allocate resources more effectively, ensuring optimal productivity and revenue generation.
In addition to process mining, the integration of AI-powered tools can streamline operational efficiency in revenue cycle management. Automation of tasks such as claim submission and follow-up reduces manual errors, saves time for staff, and accelerates reimbursement. By leveraging technology-driven solutions, children’s hospitals can enhance their financial outcomes while improving patient care through more efficient resource allocation.
Overall, the adoption of technology in revenue cycle management represents a significant opportunity for children’s hospitals to improve their operations and drive positive changes in the healthcare industry.
What would you recommend to a financial leader in a children’s hospital who is looking to incorporate technology into their revenue cycle – what should they be looking for from a partner and what are crucial questions they should be asking?
Incorporating technology into the revenue cycle of an organization can be challenging, especially when it comes to fully utilizing the functionalities of Epic’s software. When selecting a vendor, it is important to find one that not only integrates with Epic but also acts as an advisor to the hospital. They should have the expertise to augment existing Epic functionality and determine when additional solutions may surpass native EMR capabilities.
For example, while many hospitals leverage Epic work-queue scoring, there are additional ranking tools available that offer greater granularity for claim ranking and seamlessly integrate into Epic workstreams. Implementing such an integrated solution enables teams to prioritize work in more effective ways. It is crucial to choose a vendor that understands the intricacies of Epic and can provide guidance on these nuances.
Epic integration plays a vital role in preserving native workflows and maximizing the utilization of specific software functionalities tailored to the hospital’s operations. Financial leaders should prioritize technology vendors with a track record of successfully working with other health systems that use Epic.
Additionally, the selected vendor should be able to advise on how to onboard solutions in a manner that aligns with the hospital’s existing IT bandwidth. They should also offer guidance on key data requirements throughout the implementation process. By carefully selecting a vendor that integrates effectively with Epic, acts as an advisor, and understands the hospital’s unique needs, financial leaders can overcome challenges and optimize the revenue cycle management with technology.
If you have a crystal ball – what would you predict is on the horizon for RCM managers over the next 3-5 years and how would you advise a pediatric hospital to prepare for changes?
- Develop a roadmap: Audit your current revenue cycle operations and identify pain points. Create a 3-5 year roadmap that outlines priorities and non-negotiables. Determine which technologies cannot be delayed, enabling your team to perform at their best.
- Find internal champions: Seek advocates in the c-suite who understand how AI and automation can enhance existing systems. Help executives recognize AI’s potential to assist revenue cycle workers, similar to its support for clinical decision-making.
- Research potential vendors: Look for vendors who understand both Epic and revenue cycle operations. Qualify vendors to ensure they have revenue cycle expertise and can address the unique challenges facing pediatric hospitals.
- Define ROI and implementation: Prioritize technology investments based on clear metrics of success. Outline implementation details and collaborate with your IT counterparts to ensure a smooth onboarding process. Ask critical questions upfront to establish clear expectations for timeline and deliverables.
- Prep your teams: Involve your teams in the process, making them feel recognized and heard. Help them understand that technology solutions will not replace their work but enhance its impact. By getting your team onboard early, you can prevent any potential setbacks downstream.
By embracing AI and automation technology, hospitals can improve efficiency, enhance revenue generation, reduce claims denials, and maximize their existing workforce. It’s time for revenue cycle leaders to lean into automation and AI as a solution that can positively impact their organizations.
- 2023 Median Ratios for Not-for-Profit Children’s Hospitals, https://www.fitchratings.com/research/us-public-finance/2023-median-ratios-for-not-for-profit-children-hospitals-10-07-2023
- High Rates of Prior Authorization Denials by Some Plans and Limited State Oversight Raise Concerns About Access to Care in Medicaid Managed Care, https://oig.hhs.gov/oei/reports/OEI-09-19-00350.asp