Rural Critical Access Hospitals Experiment with Business Office Outsourcing - Results may set a new trend in healthcare.

The 21st Century Rural Hospital Business Office

by Phil Campbell, FACHE

After 20 years in rural hospital administration, including one stint as a division President with eight rural hospitals, I've experienced nothing less than revolutionary change in healthcare delivery.

Early in my career, hospital administrators focused almost exclusively on the "care' aspect of healthcare. As reimbursement tightened, successful hospital administrators entered a new learning curve and discovered ways to reduce costs and improve services.

Initially, hospitals began outsourcing emergency physician contracts. The results were positive. Administrators shed a major time-consuming problem area, improved service, and saved money. ED physician outsourcing is almost universal now in urban and rural hospitals.

Based on the success of ED physician outsourcing, administrators began looking at opportunities in other areas. Food Services became the next successful area for outsourcing.

Food Service outsourcing vendors were attracted to hospitals with large volumes, and this became an effective quality improvement strategy. However, many rural hospitals were left out of this outsourcing opportunity. Food Service outsourcing vendors penalized rural hospitals for low volumes and required additional stipends.

The next area to be outsourced is easy to predict. The hospital business office will be the next non-clinical area to be outsourced during the 21-Century. As a rural hospital administrator, I've sought vendors for "complete' business office outsourcing. However, until recently, no companies offered these services to rural hospitals.

I looked for a company that emphasized the importance of accurate and timely billing, efficient collecting and managing the business office in a productive and professional manner just as I emphasized the importance of providing high quality hands-on care for patients. But none existed.

Today, things have changed. There's at least one company that specializes in complete business office outsourcing. Finally, there is an independent source for removing one of the biggest headaches for rural hospital administrators. And there's no penalties for low volume.

Healthcare Management Resources (HMR) has become the business office for many hospitals. Clients range in size from rural CAH hospitals with $6 million in annual revenue to large urban hospitals with $150 million in revenue.

I've talked with several administrators who decided to use HMR to improve efficiency, increase cash, and cut headaches. It's almost unbelievable, but I've seen the reports and every HMR hospital client has increased cash from the business office by 10%. And this is over and above HMR fees.

Why will the hospital business office become the next universal outsourcing trend? When a single decision by a hospital administrator will remove one of their biggest headaches, and improve cash by 10%, the decision is not "if," but "when do I get started."

Just like ED physician outsourcing, it's easy to predict that business office outsourcing will become universal for rural hospitals.

See the results of Miller County Hospital's outsourcing experiment at http://www.cashforhospitals.com/miller.html

Results for Putnam General Hospital Http://www.cashforhospitals.com/putnam.html

Phil Campbell, FACHE is a rural healthcare consultant, author, former division President of an eight hospital group