Research from the Alliance for Lifetime Income reveals that 4 million Americans will turn 65 this year, with this trend continuing annually through 2027, largely driven by retiring Baby Boomers. The healthcare sector, in particular, is poised to lose more than 2 million workers by 2029, marking the highest employee loss of any industry. As these retirees exit the workforce, they take with them invaluable expertise and experience, creating significant challenges in finding their replacements.
This issue is especially evident in the insurance claims follow-up process. A survey of over 500 acute care hospitals conducted by healthcare improvement firm Premier revealed that approximately $10.6 billion is wasted “arguing over claims that should have been paid at the time of submission.” This is a highly complex area where employees who understand the intricacies are crucial.
As the retirement wave continues, the generational skills gap is widening, particularly in small and mid-tier communities where talent pools are limited. This gap is putting immense pressure on healthcare systems, with some hospitals closing down due to a lack of resources and rising costs, leaving communities without essential services.
What’s Needed: Evolution or Revolution?
The healthcare industry has long struggled with a frustrating cycle when it comes to insurance claims and payments. A typical scenario involves a provider submitting a claim to an insurer, who will pay part of it but deny a portion. The provider then has to resubmit the claim within a set time frame. If they miss the deadline due to insurer-related obstacles, those funds are lost forever.
There are legitimate reasons why payers deny claims, such as missing patient details, incorrect billing codes, or failure to obtain prior authorization. However, missing a deadline due to payer issues highlights a deeper problem. According to Premier’s survey, 15% of claims submitted were initially denied, many of which had already been pre-approved. Of the claims denied by private payers, 55% were eventually overturned after costly appeals, costing providers around $20 billion annually. This persists even as payers implement advanced technologies like machine learning, natural language processing, and optical character recognition to speed up and improve the accuracy of claim reviews.
Insurance companies have little incentive to move away from this system, as denials are a profitable strategy. This leaves healthcare provider staff struggling to keep up. Unfortunately, these employees are already overburdened, leaving little time to proactively manage claims.
What’s needed is a revolution, and revenue cycle management (RCM) technology is helping turn the tide. RCM technology can bridge generational talent gaps and stem the flow of time and resources wasted on chasing minimal payments. The savings generated can be reinvested into hospitals, leading to improved care quality.
Consider a 150-bed hospital with 30 employees dedicated to claims management. If 10 of the most experienced workers retire within the next three years, it will be tough to find replacements in a smaller talent pool. RCM technology streamlines workflows, boosts collections and strengthens a health system’s financial stability by prioritizing high-value claims. It makes the claims process more intuitive and collaborative, removing the guesswork. RCM not only helps bridge the experience gap but also provides recruiters with more flexibility to meet hiring needs.
RCM covers various tasks, including medical billing, collections, payer contracting, provider enrollment, coding, data analytics, compliance, insurance processing, eligibility verification, and registration. The technology can:
- Create operational efficiencies
- Drive cash flow and enhance revenue capture
- Support regulatory compliance
- Reduce inaccurate submissions to insurers
- Keep stakeholders informed about healthcare regulations
- Improve financial stability and overall performance
- Utilize gamification to motivate, engage, and retain employees
These capabilities maximize the revenue collected by providers, which can then be reinvested into improving patient care. With the RCM market expected to exceed $238 billion by 2030, the number of available solutions is growing as new players enter the market.
The Human Element
Healthcare is complex, and providers face constant challenges related to new regulations, data management, and community wellness issues. A modern RCM system should be designed for simplicity to empower employees and facilitate smooth adoption. Human involvement and oversight are essential, so vendors should provide experienced RCM professionals to supplement a provider’s team and participate in their IT strategy.
These experts should guide your team through the complexities of RCM, offering best practices and workflow strategies. They should work alongside your staff to tackle payer challenges.
As Baby Boomers continue to retire, healthcare providers must prepare for increasing pressure. Delaying action is no longer an option, as these challenges are unfolding right now.
