HFMA Executive Roundtable: Implementing a Combined Business Office: Exploring the Challenges and Opportunities

HFMA Executive Roundtable

For many healthcare organizations, centralizing hospital and physician business offices presents opportunities to increase operational efficiencies, drive patient satisfaction, and realize other critical financial benefits. In this roundtable, sponsored by GE Healthcare, participants discuss the advantages and challenges of a combined approach and also debate strategies for successfully navigating the integration process.

What industry drivers are compelling organizations to move toward a combined business office (CBO)?

Ralph Lawson: The business model that healthcare organizations have traditionally followed is rapidly becoming obsolete as revenue sources diminish. As an industry, we must find ways to become more efficient at collecting money, and, at the same time, ensure we collect all to which we are entitled. Basically, we can’t leave any stone unturned, and although we have become much more streamlined than in the past, we have a long way to go. At Baptist Health, we’re constantly looking for ways to optimize the revenue cycle making it cost less to collect more and consolidating operations is one effective strategy.

Bryan Marcotte: The patient experience has also become much more important in recent years, and this is a big driver for centralizing operations at Baystate Health. Having multiple, divergent billing and registration systems can negatively affect a patient’s experience with a healthcare system. For instance, patients may have to make a number of phone calls to get questions answered, or they may receive numerous bills and statements, resulting in frustration and confusion. Even though a physician group may not necessarily want updates from a hospital group and vice versa and so may not be enthusiastic about consolidating having both sides operate independently is not helpful to the patient, and, thus, is not a good model going forward.

Dennis Dahlen: I think centralizing revenue cycle offices is a necessary and useful first step to whatever the next business evolution is. Depending on the organization, this could be working with outside business partners, or pursuing various reimbursement models, or leveraging certain technology solutions. It may be dipping into population health or better applying data analytics. When you have a combined business office, you can solve some of your issues once for multiple organizations as opposed to dealing with each organization separately, which can be time-consuming and expensive not to mention potentially redundant. By combining operations, you lay a stronger foundation that allows you to be more nimble as the industry evolves.

How do you think a CBO would address these drivers?

Marcotte: A CBO can help from an efficiency standpoint. We’ve seen economies of scale since we’ve consolidated our different hospital billing groups into a centralized business office. We expect similar efficiencies on the physician side. The patient experience should also be a bit cleaner with a consolidated effort, eliminating a degree of confusion and duplication.

Dahlen: Unfortunately, you can never quite eliminate the multiple bill issue for patients. A CBO can certainly move an organization in that direction, but it won’t completely solve the problem. A patient will still have physician bills and specialist bills that are outside the network and the consolidated business office. I would say, however, that a CBO gets an organization at least 50 percent of the way.

David Wurcel: In general, I believe that a CBO can also help providers get a faster response from payers, vendors, and other entities.

Dahlen: In addition to all the other things mentioned, a CBO can better facilitate regulatory compliance. It’s easier to manage compliance issues in one place rather than by separate facility. Banner Health has a combination of large urban hospitals and small critical access hospitals, and it has been beneficial to have regulatory oversight in one place to make sure nothing slips through the cracks.

Shiv Gopalkrishnan: I would add one more thing: Centralization also helps organizations better utilize their networks, especially when they centralize billing and front office operations. This can allow organizations to more efficiently manage patient flow and ensure individuals end up at the right care location.

What are some of the challenges associated with a CBO?

Wurcel: In my opinion, the biggest issue a CBO faces is poor documentation. The reality is if physicians and staff document exactly what is going on with a patient, the health system will be able to process claims more effectively. However, if documentation is lacking, it leads to denials, less optimal reimbursement, and slower cash flow.

Jack Bishop: Provider buy-in can be a challenge, as providers can be skeptical regarding the benefits of consolidation. Organizations need to do a good job of demonstrating and communicating the benefits broadly to all stakeholders.

Lawson: Another challenge is making sure that small dollar amounts don’t get lost in the shuffle. We have a CBO for our hospital facilities and a second one for our physician offices. Everything falls under the same senior leadership team, but the units operate separately. One of the reasons is that our hospitals tend to chase after the big dollars, which is appropriate for them given the types of care they provide. However, that approach isn’t ideal for physicians because their reimbursement often comes in smaller increments. If we didn’t separate the two business streams, opportunities to retrieve the smaller dollar amounts could get overlooked or pushed aside, and we would have terrible collection results for our physician practices. Not only would that be financially unwise, it could also frustrate and demoralize the physician side of the house.

Billing is also different for hospitals versus physicians. On the professional side, you’re billing in the context of a relationship, whereas the hospitals are billing for specific encounters. There is different expertise required, and there are even different forms. It can be difficult and sometimes impossible to find staff with both types of expertise. That’s another reason why we keep our two sides separate but still within the same leadership structure.

Margaret Johnson: I agree. Hospital billers and physician practice billers have distinct skill sets. Having to learn the two methods can be difficult for people, and they might be concerned about whether they’re up to the challenge. If an organization is going to ask its billing staff to handle both physician and hospital billing, it should be aware of the hurdles and staff concerns and make sure to have deep education so that the individuals feel comfortable with both options.

Bishop: When combining business offices, you also need to be prepared for larger volumes, particularly on the physician side. If you’re acclimated to the facility world, you’re going to notice that in the physician world, you could have three or four or five different invoices associated with a single outpatient or inpatient encounter. As such, your volumes are going to jump substantially as you incorporate physician billing. Be sure that you are ready to handle the increase in volume.

Roderick Walker: A centralized approach also allows an organization to generate a consolidated statement for the patient, which can be quite beneficial in terms of the patient experience. However, this is not always easy to do. Although Virginia Commonwealth University (VCU) Health System has made progress in this area, we are not at the place where we can generate a single statement yet. We have worked to clean up our physician and hospitals statements and make sure the patient can recognize the differences between the two. We also have consolidated customer service, so if patients have any questions, they can call one place to get answers on either of the two statements.

Wurcel: Regarding statements, hospitals and health systems also have to eliminate all of the extraneous verbiage found in these bills that confuse patients. For instance, we shouldn’t include every detailed charge on the final bill, but instead adopt language that says, “This is your bill, this is what your insurance is paying, and this is what you owe.” That’s it. Otherwise, you truly risk confusing the patient.

What are the best strategies for rolling out the CBO configuration? Do you have any tips or suggestions for managing the culture change, new workflow implementation, etc.?

Marcotte: For us, step one is bringing together the cultures of the various organizations we’re trying to combine. For instance, if we are folding a community hospital into our large academic teaching health system, there are going to be significant cultural differences, especially regarding how the entities do business. Even though each integration is unique, a key part is being transparent, including all players in the transition and working through the process so the stakeholders are involved and comfortable.

Wurcel: Before you can truly get another organization on board, you have to understand and respect their culture, appreciate where they’re coming from, and respond to their needs. For example, you may be dealing with people who now must travel 50 to 60 miles to go into the central business office. What can you do to help them ease this transition? How can you make their lives easier? Can they work from home some days? Can they take advantage of off-peak hours to avoid traffic?

Lawson: Having a common technology platform can make it easier to combine operations. We recently converted to a single system, and it has been helpful in streamlining the centralization effort. That said, we still have a long way to go. It remains difficult, for example, to generate detailed reports that capture both physician and hospital information.

Marcotte: Standardizing workflows can also be a good idea when combining offices, although there are challenges with that, particularly if an organization is not accustomed to this idea. We recently went live after incorporating a community hospital into our business office, and we had to shift them to more standardized operations. Basically, we want everything to appear the same for the patient. No matter where an individual enters our 120-site system, we want them to have the same experience on the front end, meaning scheduling, registration, and so on. As we tried to shift the community hospital to our standardized processes, it brought to light some issues, and it was quite a culture shock for them. We strived to overcome that by providing significant training and shadowing. We brought in people from the academic teaching hospital to serve as guides, spending two weeks with the community hospital staff and getting them up to speed.

Lawson: As part of appreciating the culture, it is also critical to get the physicians on board because they are essential to the reimbursement process. You want to communicate effectively with doctors in terms that they understand and value. For instance, saying that your organization must standardize workflow will probably not resonate with physicians, but if an organization is able to communicate the message that by doing certain things every time, the entity will collect more money and that will be reflected in the physicians’ pay, the doctors then start to get the picture that standardization is important. Physicians can be a point of resistance if they are not properly brought into the work, but they can be pivotal in making things happen if they are committed to the process.

Bishop: I would say that communication in general is key whether that’s with physicians, nurses, business office staff, administrators, and so on. It’s imperative to make all stakeholders part of the team and avoid inadvertently ostracizing anyone, but instead help them appreciate the benefits and what the end results could be.

What are some strategies around getting the most out of your workforce as you’re building and consolidating the CBO?

Wurcel: Being genuine is the most important approach. The workforce understands people who speak in clear and realistic ways even if they’re giving bad news. You also need to be consistent and reward and recognize people for their accomplishments rather than punish them for their mistakes. Also, make sure to give your team the right tools to get their jobs done effectively and accurately. If you are expecting staff to perform at a certain level, but you don’t give them the tools, you won’t be successful. As you begin to consolidate, use data to figure out which of your employees are resisting change and work more closely with them to understand the reasons behind their hesitation and what the organization can do to ease the transition. In some cases, you can identify issues you didn’t see before. Ultimately, if you have a workforce that feels you have their backs, they will do their best for you.

One specific way to engender positive feelings is to have leaders walk around and meet with staff on a regular basis asking them questions about their jobs, what can be done better, what’s going on in their lives, and so on. Our organization leaders embrace this concept, and, as a result, they block three to four hours a week to walk around and talk with employees, helping them to feel valued and give them a sense of belonging.

Walker: Rewarding performance can take a number of forms not just financial compensation. For example, at VCU, we instituted a program where staff could wear jeans on Fridays. It was a no-cost initiative for us, but it was a huge hit with staff.

Bishop: Saying “thank you” can also have a significant effect. Although this may seem obvious, it’s amazing how many organizations don’t do it. Single people out; say thank you to a staff person in front of his or her peers and use specific examples. Recognizing people in this way lets them know you notice and care.

What are key lessons learned you would share with others looking to combine business offices?

Lawson: As you start to consolidate, make sure your employees feel secure about their jobs. This is a big change, and people are going to be nervous which is totally normal. However, people are a lot more productive when they feel secure versus when they are worried whether their job is going to be there tomorrow. So, it’s essential to provide that sense of permanence as you change the configuration of the business office.

Wurcel: There is a phrase in this business, “Once you’ve converted one hospital, you’ve converted one hospital,” meaning that every organization’s conversion is going to be different. Although you can certainly learn things from one conversion to the next and apply those things when relevant, there will always be something new or unexpected. Be sure to keep an open mind during the transition and remember the goals of combining business offices are to make operations more efficient, effective, and patient-friendly.

Gopalkrishnan: These are exciting times that are full of learning. In the end, I think a CBO has the potential to give organizations scale from a cost standpoint and utilization from the whole ecosystem standpoint. Most importantly, it allows organizations to better meet patients’ needs, letting them access their full health history and finances.

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Participants in the HFMA Executive Roundtable

Jack Bishop is program director for Indiana University Health in Indianapolis.

Dennis Dahlen is former CFO and senior vice president for Banner Health in Phoenix.

Shiv Gopalkrishnan is vice president and general manager for GE Healthcare in Seattle.

Margaret Johnson is manager of government payers and special billing for VCU Health System in Richmond, Va.

Ralph Lawson is executive vice president and CFO for Baptist Health in Miami.

Bryan Marcotte is director of revenue cycle operations for Baystate Health in Springfield, Mass.

Roderick Walker is director of hospital billing for VCU Health System in Richmond, Va.

David Wurcel is vice president of corporate business services at Yale New Haven Health System in New Haven, Conn.

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About GE Healthcare

GE Healthcare provides transformational medical technologies and services to meet the demand for increased access, enhanced quality, and more affordable health care around the world. From medical imaging, software and IT, patient monitoring and diagnostics to drug discovery, biopharmaceutical manufacturing technologies, and performance-improvement solutions, GE Healthcare helps medical professionals deliver great health care to their patients. For more information about GE Healthcare, visit our website at www.gehealthcare.com.