Summary: To be effective, health system Chief Revenue Officers (CRO) need to have the right mindset to create a culture of growth, to experiment, and to orchestrate transformation across the entire health system. It’s no surprise that many health systems have a former CFO or a budding, emerging CFO do this role. The CRO is the CFOs righthand resource for all things revenue. The CFO is the person who understands the most about where a health system’s vulnerabilities are on the revenue side. For the CFO who is onboard with the concept of a CRO, here are five attributes to consider when promoting or recruiting your best new asset.
Recruiting the right talent for success in the revenue stream
In many health systems, only the CFO gets to see the big picture when looking across the organization’s financial, clinical, and operational performance. Given the scale and complexity of the revenue stream, we believe the CFO needs a new wingman or wing-woman to see that same big picture.
Conway’s Law, an adage named after computer programmer Melvin Conway, supports the idea that an organization’s social boundaries define its technical architecture. Consolidation and cross-functional integration in our health systems are now a fact of life. As multiple institutions come together into large regional systems, CFOs are convening executives and teams working across different projects, systems, and audiences.
The typical health system finance organizational chart is packed with a squad of talented executives focused on their specialized domains, e.g., VP of Revenue Cycle, Director of Patient Accounting, Director of Patient Access, Director of Managed Care Contracting. With such a granular degree of sub-specialization in the revenue cycle, there isn’t anyone below the CFO looking after the whole revenue picture.
When a CFO looks at the organizational structure, they may see they lack the right people and processes to align all of the stakeholders to implement sustainable change. If everyone is not on the same page, even the most operational and far-sighted executives will struggle to transform today’s revenue cycle from one dominated by third-party insurance into one that addresses the empowered consumer.
The three trends driving the CRO requirement include:
1) Optimizing the patient’s financial engagement and the likelihood they will return;
2) Leveraging more advanced analytics to make better decisions and resource allocation;
3) Monitoring the rising cost of the revenue cycle and improving yield.
The Chief Revenue Officer role is one that can go beyond what health systems are doing today. So what are the attributes needed in the health system’s new CRO?
#1 The CRO is the CFO’s transformation engineer
Disruption is a fact of life in the healthcare industry. Whether it’s related to consumerism, the transition to value-based payments, government data policy, or the merging and integration of digital technology, your health system needs a transformation engineer who is going to think strategically about addressing these challenges in the context of how the health system makes and receives revenue. No organization can afford to make tactical decisions in a vacuum.
The newly recruited CRO should be capable of engaging stakeholders outside of the revenue cycle, including finance colleagues, care management, and clinical leadership. For example, increasing transparency for patients regarding cost and liabilities before treatment is expected today and requires collaboration across a number of teams at the health system. A strategic CRO will anticipate the shifts in sites of care from brick and mortar to telehealth. He or she will also become adept with the growth of narrow networks where the health system is directly contracting with large employers.
The newly recruited CRO should be capable of engaging stakeholders outside of the revenue cycle.
Digital care technologies, robotics, and artificial intelligence are already appearing in revenue cycle management. A leading CRO with technology and financial savvy is required to measure and monitor the cost-benefit of these investments or else the cost to collect will continue to climb without a corresponding improvement in yield.
“Change in healthcare, at this point, is your friend and it’s inevitable,” says Dr. Rick Kolsky, a Lecturer at Northwestern University’s Kellogg School of Management. Without the right infrastructure, resources, and software in place, a health system is at risk of getting left behind. As the revenue cycle and patient relationships continue to grow in complexity, health systems stand to lose a lot if they don’t step up to find the right talent to take on this new level of responsibility.
Health systems need to be bold to survive, claims Kolsky. “Learn quickly from the upstarts before the upstarts destroy what you see as your existing business – and constantly experiment. You should be running hundreds of experiments on how you’re going to reinvent healthcare,” he explains.
#2 The CRO is a talent manager and team builder
Central to the CRO mission is the need to integrate disparate teams, processes, and systems into a single, end-to-end patient access and financial experience. Attracting and retaining talent to maintain an excellent experience across the different touchpoints of the health system, particularly on the front end of both hospital and physician services, is fundamental.
The CRO can take a disparate group of people and work to align them.
In a non-healthcare setting, a great CRO is often the person who breaks down all the silos between sales, marketing, and customer relationship management (CRM), plus anything else that might prevent the entire team from working together to create the best possible customer experience. In healthcare, there are just as many silos that need to be broken down or fragments that need to be knit together. The CRO is someone who can take a very disparate group of people, work to align them, involving colleagues who may have compartmentalized perspectives and granular understanding of the overall experience, but not the whole.
With so much money at stake, if a health system’s processes and people are not designed and geared towards servicing the patient-as-payer population, then everything else is at risk. If the organization isn’t responsive to the needs of its customer demographic – the patients driving the revenue into and through the organization – then sustainable transformation won’t be achievable. In this environment, the CRO responsible for the process needs to be charged with change management responsibilities.
#3 The CRO is a savvy technologist
Technology advances are helping many health systems to update registration, telehealth, and financial processes to become more consumer-friendly. Consumer adoption of digital technologies is the key to reaping the benefits. Ease of use by a patient or family will often dictate their activation and continued use of that technology. A platform like VisitPay offers patients a robust set of self-service capabilities, delivered with the clarity and insight into patient concerns.
A CRO makes it easy for patients to engage with the health system and meet their financial obligations.
For most health systems, revenue cycle processes are a far cry from being user-friendly. How easy is it to understand a bill? How sure are you that you have all the information to be able to bill accurately, how easy is it for a patient to even find where to go, and how to navigate your system? Patients (even older ones) expect access capabilities to be available digitally, yet health systems continue to struggle to provide them. These are the kinds of questions a CRO should be investigating and answering.
It is the CRO’s role to not only identify emerging technologies but also ensure these new capabilities address the drivers of convenience, ease of patient access, and a quality, consistent, experience. A CRO’s first success criteria will be making it easy for patients to engage with the health system and meet their financial obligations. For instance, can the patient easily make manageable payments on an estimate they’ve been presented with, in a way that aligns with health system policy?
#4 The CRO is an analytical resource
The devil is in the detail. The entire revenue cycle analytical function is now so much more important than just the bill production process, revenue integrity, cash collection, or registration quality. To manage risk – whether it takes the shape of denial problems in the revenue stream, or understanding the performance of revenue drivers across the cycle, a CFO needs data and root cause analysis from the CRO. If the revenue cycle is being run without data analysis and distillation into clear and actionable reports — on a daily, weekly and monthly basis — the risk for the CFO is enormous.
The CRO measures and understands what’s driving patient satisfaction and loyalty.
Having a CRO who is a quantitative performer is necessary because there is so much more data available about consumers, about how the revenue cycle is functioning throughout the various strata of the organization, across multiple external organizations and partners, as well as the different entities within the system. It is the CRO who has to worry about new metrics in the consumer revenue cycle – to measure and understand what’s driving patient satisfaction and loyalty, for example.
For the best of our health systems, having the right dashboards, looking at trends inpatient experience, and managing large, cross-functional teams are things that go well beyond standard balance sheet metrics tracking A/R performance. Patient account receivable management needs an executive to monitor and report transparently to drive the organization’s focus on what matters to patients and cash flow.
#5 The CRO is a strategic growth manager
Today’s health systems are operating within market conditions where retail clinics are popping up in Walmart stores, and CVS and Aetna are joining forces to become one massive entity offering a range of services, many of which could also be provided by the hospital. These are disruptive and challenging trends in which health systems must now compete. In this environment, the CFO needs an executive in place to look after packaging, pricing, and site of care services. The CRO needs to also be in a position to forecast revenue trends where the patient is the payer.
CROs need a sense of how to look beyond the horizon with an entrepreneurial bent.
The CFO and CRO need to understand where the brand is headed, what the consequences for revenue growth are by looking at demand, and work with marketing teams to track consumer preferences and sentiment in terms of promoter scores across the revenue cycle continuum. CROs need a sense of how to look beyond the horizon with an entrepreneurial bent. Using the insight from the CRO, the CFO can then interpret and articulate what the future investments and return will be, and then educate the leadership team about them.
Tomorrow’s CFO partnership
The CRO is the extension of the CFO. It is the CFO who understands the most about where a health system’s vulnerabilities are on the revenue side. For the CFO who is onboard with this concept, these are five attributes to consider when promoting or recruiting for the position of CRO.
The relationship between the CFO and the CRO is a partnership. The uber CFO has the right balance between being a financial operations leader, an organizational strategist, and a forward-thinking growth manager. It’s the CRO that enables the CFO to rise to the occasion.