If you’re like me, you quickly grew tired of the phrase “new normal” in 2020. While this largely referred to changes we made in our everyday lives to stop the spread of COVID-19, the unfortunate reality is that many healthcare organizations are now facing their own new normal. That is, already thin margins have shrunk even further. In fact, last year was the worst year financially for hospitals and health systems since the start of the pandemic. So how can your organization reach and maintain financial stability to support high-quality patient care?
It may seem counterintuitive to offer technology adoption as a cost-saving solution, but artificial intelligence (AI) is becoming a valuable tool in the business office. Here’s why it might be the right time for your organization to make the leap.
Outside forces versus your bottom line
As many healthcare organizations are still rebounding financially from the pandemic, there are other market influences making this even more difficult. According to data from Definitive Healthcare, average medical and surgical supply costs for hospitals increased by 10.1% from 2020 to 2021, and total hospital costs increased 8.5%. Similarly, pharmaceutical spending rose 7.7% in that same period, and the cost of more than 1,200 drugs exceeded the inflation rate from July 2021 to July 2022.
Additionally, staffing shortages that predated COVID-19 reached a boiling point during the height of the pandemic, and much of the fallout remains. Many healthcare organizations relied on costly contract labor to fill staffing gaps. In fact, the American Hospital Association (AHA) estimates that total contract labor expenses increased 257.9% from 2019 to 2022.
With these external factors cutting into margins, healthcare organizations need to look for internal, controllable ways to drive down costs and increase revenue. And the business office is a great place to start.
Better, faster, stronger financial performance
When discussing AI in healthcare, the conversation often focuses on how it will transform clinical practice in the future. However, the revenue cycle presents an opportunity to make incremental yet impactful changes today.
Consider technology like robotic process automation (RPA), a software bot that leverages AI and machine learning (ML) to automate repetitive, rules-based tasks. Revenue cycle management (RCM) involves many of these types of tasks, such as claim processing, insurance verification and denial management. With automated solutions like RPA, staff members can be alerted to potential errors before claims are submitted, which reduces denials, increases speed to revenue and saves time that would otherwise be spent correcting a claim.
In addition to greater efficiency in the revenue cycle, AI can help improve staff satisfaction. The workforce shortage has not only affected the clinical side of healthcare, but also the administrative side, which often translates to challenging workloads for the people on staff.
By automating some of the more tedious tasks, organizations can help lighten the load for the human workforce. Additionally, this enables staff members to dedicate more time and attention to more demanding tasks that require human intervention, such as correcting complex claims. Given how much it costs to lose employees and then find and onboard new ones, improving staff satisfaction can make a real difference.
Leveraging AI will not dissolve financial straits overnight, but it does provide organizations an opportunity to make small changes that add up to substantial results. And in this constantly changing industry, that potential is priceless.