The discussion around using a niche revenue cycle vendor or one-stop-shop solution has been a hot topic for years. As larger companies expand and look to fill gaps in their service offerings, they may acquire some of the smaller niche players in an effort to be ‘all things to all people.’
This may work for some, however it has been demonstrated too often that it doesn’t work for all.
Hospitals are going through an especially challenging time as a result of COVID-19—it is as important as ever that they partner with companies they can depend on, companies who are going to provide services that are reliable and thorough, and companies that deliver on their promised results and level of service.
Open communication and a give and take relationship will make for a successful and valuable partnership.
Let’s highlight a few of the pros and cons of using a niche revenue cycle vendor versus a one-stop-shop solution.
Advantages of a Niche Revenue Cycle Vendor
- Expertise- to be able to say, ‘this is all we do’ instills a sense of credibility, experience, and confidence that a business partner will invest all of their energy into providing that solution and should yield better results
- Flexibility- it is important to be able to pivot or adjust processes on short notice as needs change
- Results and Service- using a specialized niche vendor will likely lead to overall better results and quality of service—the company is full of subject matter experts (SMEs) and not so many generalists.
Let me share a personal example.
About four years ago, I hired a contractor to paint my house. My house has a wrap-around porch. As we were evaluating the work, we discovered there were parts of the railing that needed to be replaced.
The painter said his crew did a lot of carpentry work also. I wasn’t confident with the response, but reluctantly let them complete the work that was needed.
Now, almost four years later, a lot of the railing that was replaced needs to be replaced AGAIN. It is apparent now that they didn’t use the appropriate materials for the work, and their work didn’t hold up to the elements.
Needless to say, I won’t be using that painter again. I didn’t ask enough questions to ensure that the work would be done properly. While the contractor said they could complete the task—in reality—it wasn’t something they did a lot of or did particularly well. In the rush to get the work done, I didn’t shop around for the best solution.
This happens in healthcare also when it comes to selecting an outsourcing partner. It is important to fully discuss the scope of the work and what the expectations are for both parties to ensure a successful engagement.
Disadvantages of a Niche Revenue Cycle Vendor
- Size- a niche vendor may have fewer resources due to size
- Acquisition- small players may be acquired by larger organizations that are trying to expand their market share, possibly resulting in a reduction in quality. I’ve often heard hospitals say that a company just isn’t the same or doesn’t offer the same level of service post acquisition—they lose some of what made them unique.
Advantages of a One-Stop-Shop
- Single point of contact- some providers prefer not to deal with multiple vendors, having the assumption that a single vendor is more manageable
- Minimal file extracts- from an IT perspective, there may be less effort required
Disadvantages of a One-Stop-Shop
- All your eggs are in one basket- I’ve seen this too many times, especially as the industry sees an increase in the amount of consolidation—both on the provider side and the vendor side. The risk is that the company responsible for the work today is not the company responsible for the work tomorrow—they can have an entirely different philosophy and approach.
- Unwinding a one-stop-shop engagement can be challenging and time consuming
- Generalists, not specialists- it is important to be sure that there are no holes or weaknesses in the process that might fall short of expectation
As you can see, a case can be made for either option. It really comes down to the needs and the expectations of your organization. Take the time to understand the marketplace and ask for references.
Hospitals are challenged now more than ever to manage their costs while chasing a decreasing level of reimbursement.
Know what you’re good at and what you can confidently leave up to those business partners who make it their business and risk their reputation.
There are a lot of good companies out there—you might never know what you’re missing until you take a closer look and talk with them about what they can do for you.
Remember this quote :
“If you continue to do what you’ve always done, you’ll always get what you’ve always gotten.”Jessie Potter
Stay well and keep on growing!
Bill Eikost, FHFMA has spent the last 30 years helping hospitals identify ways to improve cash flow and accelerate collections from all available sources. He is a Fellow in the Healthcare Financial Management Association (HFMA) and a recent Past President of the Georgia Chapter of HFMA. During his time at Nemadji, he has been an invaluable asset responsible for forging and maintaining long-term client relationships and national accounts, as well as strengthening strategic partnerships.
Posted Jul 8, 2020