More than 40% of medical group leaders say finance and revenue cycle management are their biggest focus areas for 2024, and it’s easy to see why. Across the board, revenue gains are being outpaced by operating costs, leading to higher expenses, tighter margins and less predictable balance sheets. 

Indeed, healthcare organizations today face more revenue roadblocks than ever before. Fortunately, there’s a clear solution: Use technology to combat revenue leakage. 

By doubling down on IT and software investments, healthcare organizations can minimize economic pressures and maximize revenue-generating opportunities. In this step-by-step guide, we’ll explain how to find the right solutions for your organization so you can safeguard your financial health for years to come. 

Step 1: Identify sources of revenue leakage 

Before exploring potential solutions, it’s important to determine what’s putting the most pressure on your revenue cycle. Are uncollected patient payments increasing bad debt? Are no-shows and cancellations hurting your bottom line? Is patient churn driving down provider utilization? 

To find out, establish a working group of key internal stakeholders—administrative personnel, clinical staff and executive leadership—and create a list of your biggest pain points. You’ll likely find two principal sources of revenue leakage: 

• Direct: This is the money you’ve earned but haven’t collected. It primarily includes patient payments—such as copays and balances—that are outstanding or past due, as well as bills that are written off as bad debt. 
• Indirect: This is the money you could have brought in but never had the chance to earn. It primarily includes factors that create schedule gaps, such as poor brand awareness, unused appointment slots and higher-than-normal patient churn. 

Step 2: Establish your goals and priorities 

Now that you’ve identified your root causes of missed revenue, it’s time to decide what to address first. Meet with your working group to determine what you’d like to prioritize, and outline a realistic timeframe for doing so. 

When setting goals, don’t shy away from specifics. Your goals should be actionable and data-driven, and they should consider your organization’s current state (what you’re achieving today), your future state (what you’d like to achieve) and your next steps (what you’ll do to get there). 

Let’s say you work for an organization that wants to reduce no-shows. A well-defined goal for that objective might look something like this: 

• Current state: 90-day rolling no-show rate of 20%. 
• Future state: 90-day rolling no-show rate of 5% or less. 
• Next steps: Send appointment reminders to improve patients’ likelihood of keeping their appointments and automate scheduling to bring them in for care sooner. 

Want to make your goals even more actionable? Consider using the SMART framework to make your objectives specific, measurable, achievable, relevant and time-bound. 

Step 3: Find a trusted partner 

You’ve done your homework. You understand your biggest challenges, and you’ve identified one or more solutions. Now, it’s time to find a technology partner that can help bring your vision to life. 

This is where those “next steps” you outlined in Step 2 come into play. Review them, and then compile a list of vendors that offer relevant solutions. Shortlist the most promising candidates, and critically assess them before signing a contract. 

When vetting potential vendors, you should: 

• Calculate your estimated return: Most technology vendors charge a monthly fee to use their software. Use an online ROI calculator to determine whether the revenue you generate from the vendor’s software will offset its cost. 
• Ask for aggregate results: The vendor you choose should willingly disclose their track record. Request insights from their full client base—or from a segment of their customers that share your size, specialty, location or patient demographic—to approximate the outcomes you might expect to see. 
• Request a free trial: If the software is truly worth it, you should be able to test it before opening your checkbook. Ask your potential vendor for a free trial with no upfront fees for software, training or implementation. 

Looking for more tips to assess potential vendors? Check out our free buyer’s guide to find out what types of questions you should ask. 

Step 4: Measure performance and impact 

You found a match! You’ve selected a vendor, and you’ve had a few months to use their software risk-free. Perhaps you’ve heard great feedback from your staff, and it feels like everything is working as expected. But how do you know for sure? 

If you’re tracking the data, it should be easy. Review your “future state” objectives from Step 2, then look at real-time analytics and reports that detail what your new software has helped you achieve.  

If you’ve met or exceeded your initial goal, it may be time to sign a contract! If you’ve improved but haven’t met your goal, meet with the vendor to see if there’s anything you could do to get more value from their software. And if you haven’t seen the needle move, revisit your shortlist of vendors to see if there are more promising solutions you could try instead. 

In the current economic climate, increasing revenue can seem like an impossible task, especially when many healthcare organizations are strapped for talent. But by establishing actionable goals upfront—and keeping them top of mind while testing solutions—you can protect your organization’s bottom line and deliver a better experience for your patients and staff. 

Learn how Phreesia can help you increase revenue today.