“I have no idea what happened here, and now we’re in a position where I don’t think anyone can help us. We need to sell all seven hospitals, and we need to do it quickly.”

This comment was made by a board member and interim CEO of a community health system who faced a devastating but common reality: they were not collecting enough revenue to keep their facilities open and operating.

With nearly 900 hospitals at risk for closure today, healthcare deserts are becoming more prevalent across the U.S, especially in rural communities. The average distance between rural healthcare facilities has increased more than 700% since 2014 – with facilities now being more than 45 miles apart and only one ICU bed per 10,000 people on average.

The simple answer is that the math is not adding up. Operating expenses are up nearly 30% compared to last year, and inflation is at a 40-year high. These rising costs are far outpacing the reimbursement from commercial and government payors, which is only expected to increase by 2% 3% each year.

In addition to rising costs and stagnant revenue, hospitals are spending more money trying to collect what they owe – and are having a harder time doing it successfully. On average, 1 in 10 claims submitted for payment by a hospital is denied by a payor, causing cash flow issues, costly rework and lost revenue.

Adding to the complexity are the hundreds of thousands of regulatory updates and payor policy changes that occur each year, which hospitals are expected to translate and operationalize to avoid audits, fines or rescinded reimbursement.

While hospitals can’t control payor reimbursement rates, they can control the amount of owed revenue they’re collecting and at what cost.

At Ensemble Health Partners, our revenue cycle operators have partnered with more than 40 healthcare organizations to identify ways to improve financial performance and prevent loss. Through thorough revenue cycle assessments, we have uncovered more than $1 billion in uncollected revenue across those organizations.

Here are specific tips for healthcare leaders to avoid the biggest preventable issues impacting revenue:

Learn more about how we are partnering with healthcare providers across the country to improve financial performance and keep communities healthy.

Shannon White, Chief Operating Officer of Ensemble Health Partners, is a senior revenue cycle operations and business development executive with over 25 years of healthcare experience and a proven history of building successful teams and implementing strategies that improve financial performance.

Ensemble Health Partners is a leading provider of technology-enabled revenue cycle management solutions for health systems, including hospitals and affiliated physician groups. Ensemble offers end-to-end revenue cycle outsourcing, patented technology and targeted revenue cycle management solutions to clients across the country.

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