A Lot of LUV

Tim Coan

The financial results for Southwest Airlines are legendary. In the airline industry, where bankruptcy is common, Southwest has strung together an impressive 42 consecutive years of profitability. Southwest has also made $12 billion over the past 15 years, whereas the big legacy carriers have lost a collective $17 billion. With numbers like these it’s no wonder that the LUV stock has risen over 650% since 2011.

To have achieved such results, Southwest made a number of brilliant strategic decisions, ones that ran counter to conventional industry thinking. Flying only one model of plane to simplify everything from pilot training to ground operations to maintenance, and avoiding high cost primary airports by basing out of cheaper secondary locations, are just two of the unique strategies that propelled Southwest’s success. Interestingly though, as innovative and important as these strategies were, they were not the only reason why the company prevailed when so many others did not. There’s actually much more to the story. The most important distinctive facet of Southwest is, and always has been, their culture. It would be easy to say that Southwest created a magical place that captured the personality of its straight-talking, whiskey-drinking founder, Herb Kelleher, and embedded his essence into the DNA of employees over the years. But it would be too simplistic.

No doubt, their culture is powerful. When a company goes above and beyond to demonstrate caring for its employees as Southwest has done, it’s a lot more likely that those employees will create a fun, quirky flying experience for customers that stands out from the competition. There are many companies who famously compete on culture, but culture does not exist in a vacuum. To work, the culture must match the needs of the business and give life to the execution of its strategy. And that’s why Southwest has been successful – its culture supports its strategy and together they deliver a differentiated experience that customers LUV!

When applying this culture/strategy concept to the healthcare industry a number of advantages come to light. For example, the advantages a physician practice can gain by outsourcing RCM. The first advantage that comes to mind is having the scale to invest in technology and specialized resources. Good outsourcing providers build a culture specifically designed to enable RCM performance, which is different from the culture necessary to build a great physician practice. This is an important issue in your RCM decision, but it generally gets little consideration.

A great physician practice needs a culture centered on two key concepts.  First, it must deliver a face-to-face customer experience like a best-in-class retailer.  Second, it must support providers who face a slightly different task with every patient. This is a ‘people-centric’ culture built around the patient and the physician. It is experience-oriented, geared to adjust on the fly many times a day.

The culture required to deliver good RCM performance could not be more different.

The revenue cycle is more like manufacturing. Thousands of transactions get handled every day, which requires a ‘process-centric’ culture that values predictability and standardization. Adjusting on the fly is not the goal; repeatable reliability is.

It is virtually impossible for an organization to have two cultures, one on the clinical side of the house and another on the administrative side.  Values, beliefs, rewards, communication styles and decision making processes are not contained inside a department, but flow across the organization. This is why it may make sense to outsource RCM.

Having a specific culture is key in attracting and retaining top talent.  High performing organizations rely on having the right leaders. As an outsourcer, ALN recruits highly qualified people who have a process orientation; who naturally use technology and data to drive process improvement; who create value by building a system of work that others execute. We retain our employees because they know their skills are central to our business, not just a support function for a clinical business.

Culture attracts the right people and the right people create the culture.  This reinforcing cycle results in distinguished performance over time.

If your practice is growing to meet the new demands of the evolving healthcare industry, it might be time to reconsider how you manage your revenue cycle and find a partner with the necessary scale to invest in the technology, specialized talent and culture that you need to reach your goals.

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