The way we think about and pay for healthcare services is always shifting. The way we finance and sustain healthcare organizations is too.
Last week, members of the Madaket team attended the Healthcare Financial Management Association (HFMA) Annual Conference, commonly known as HFMA Ani, in Orlando, Fla. We partnered with CapitalOne Healthcare and Canaccord Genuity to host an idea exchange and networking dinner with revenue cycle management leaders to get their insights on trends in healthcare financing.
The M&A’s aren’t just clinical
Hospital and system mergers and acquisitions have been a major topic in healthcare for years, but M&As among healthcare payments companies were also top of mind at HFMA and our dinner. We are seeing more and more traditional financial institutions working with healthcare-focused financial companies to tackle problems in medical payments processes that contribute unnecessarily to overspending in the industry.
An example of this shift that was a particular topic at the conference was the widely publicized acquisition of Instamed by JP Morgan Chase, aimed at addressing bottlenecks and challenges in the healthcare consumer payment experience. We expect more payments players to consolidate in 2019.
Direct payer connections
TripleTree identified a combination of capabilities including payer connectivity by revenue cycle management (RCM) service providers as having the “greatest potential to optimize financial performance for the provider while helping accelerate the industry’s progress toward a more highly automated, ‘frictionless’ environment.” The benefit of this connectivity emerged as a topic of discussion and major differentiator for RCM partners at HFMA. The most innovative RCM players continue to reduce their reliance on trading partners for the purpose of connecting to payers by going direct. We see this ongoing trend as positive for all stakeholders, because it leads to a reduction in redundancies, opportunities for errors and overall friction.
ROI matters but approach varies
RCM service providers are increasingly looking to accelerate their innovation efforts by working with startups via partnership or acquisition. In the first half of 2018 alone, the health IT and RCM space saw $3.3 billion in M&A. However, since RCM technology costs are no longer offset by the financial incentives associated with the Meaningful Use program, there has to be demonstrable ROI for those that the RCM players are looking to partner with.
Fortunately, this ROI can be measured in many ways and can be tailored to the organization’s needs. Reducing cost per transaction, seeing true benefits of buying a solution versus building in-house, and improving provider and customer satisfaction were three of the common ROI measures we heard at HFMA.
We were encouraged by the discussions at our idea exchange event and the HFMA conference as a whole. Those who are investing significant time and money into improving healthcare processes are thinking critically about maximizing the impact of those efforts.
Thanks again to CapitalOne, Canaccord and all of our dinner attendees. We look forward to next year.