Focus Search Partners’ three-part series, Revenue-Generating Insights, has explained Why Managed Care and Revenue Cycle Management Strategies Are Top PE Priorities and outlined Seven Essential Traits of Today’s Chief Managed Care Officer. It concludes by providing actionable advice to PE-backed healthcare services platforms about how to find and attract an experienced RCM leader.
As every PE firm knows, a healthcare services platform that doesn’t perfect revenue cycle management (RCM) drags down value creation and dampens future expansion plans. In the worst-case scenario, a platform’s ample promise can be extinguished before it ever takes hold when it is incapable of effectively integrating the revenue cycle function of acquired practices after a period of rapid expansion.
In fact, successfully establishing a sophisticated and seamlessly integrable RCM function, complete with AI-driven data analytics, has become so important to investors that RCM leadership now often resides at the C-level. But a problem remains: How to find an experienced director of RCM or a chief revenue officer (CRO) given the relatively recent strategic elevation of this role from its more tactical history.
In our experience over the last several years placing CROs as well as VPs of RCM, we’ve found that the following strategies significantly increase a client’s ability to find and attract ideal candidates to lead this all-important function for their platforms.
1. Be Open to Remote Work
Given the already-thin candidate pool, healthcare services platform CEOs and CFOs simply don’t have the luxury of further limiting their choices by requiring an on-site CRO. This is especially true in more obscure locations where few, if any, viable candidates with even the minimum criteria live, and the chance of convincing anyone to relocate there is slim to none.
Truthfully, other requirements like a significant multi-site, multi-state healthcare background are far more important than being in the office five days a week. With today’s cloud-based analytics and communications tools, trust that the right CRO who fits all your other criteria can effectively do their job remotely.
2. Capture the Role’s Elevated Status in Your Job Description
You can’t rely on outdated job descriptions for a role that has changed so much. If you want to attract a top-notch candidate who reflects the current importance of RCM, make sure to craft a job description worthy of its elevated status. In addition to requiring a significant RCM background, including experience with things like payor contracts and relationships, data analytics, and regulatory reimbursement requirements, the posting should prioritize critical leadership attributes, such as emotional intelligence, business judgment, team-building, decision-making, problem solving, and interpersonal communications with all levels inside and outside the organization.
3. Invest in a Clean Revenue Cycle
Do you want to stop leaking millions from your revenue cycle?
Then be prepared: RCM leadership candidates can command much higher compensation levels than ever before because the role has changed so much, and the qualified talent pool is still relatively small. In fact, we just placed a VP of RCM who received a bigger compensation package than some CFO searches. It’s also not unheard of for these rising leaders to be offered equity as part of their deal.
Furthermore, candidates want assurances that the PE firm backing the platform is willing to invest in the AI-driven tech tools that will enable the RCM function to unlock every cent of previously unbilled, uncollected, or untapped revenue. So, yes it’s going to cost money to stop the leakage. But our experience with private equity indicates that this investment can quickly return millions, with the results paying for the RCM leader’s compensation multiple times over.
4. Consider the Consulting Profile
We understand why clients ask us to find CRO and VP of RCM candidates out of other PE-backed healthcare services platforms. It’s the most logical hire. But there is another option worthy of your consideration, especially given the limits of your preferred candidate pool.
As the pendulum shifts from outsourcing the RCM function to bringing it back in-house, it is sometimes easier to find a talented resource from a third-party RCM service provider with a similar level of management and leadership experience. Many of these candidates possess a comparably in-depth knowledge of the bill-to-pay cycle. And because they think like consultants, they know the importance of a well-established RCM infrastructure and understand how to pull insights out of the latest tech tools.
5. Think Beyond RCM
What better way to attract top RCM leadership talent than to present them with an even more expansive and influential role. Here are a few ways we’ve seen other PE firms succeed with this recruitment strategy:
- Making the CRO an integral member of acquisition deal teams with a significant role in due diligence and a valuable voice about which practices are worth pursuing
- Having the CRO report directly to the CEO instead of the CFO
- Putting the CRO in charge of establishing revenue cycle mapping and analyzing referral patterns so they can help drive critical business decisions
- Creating a hybrid role that combines the leadership of RCM with managed care
RCM Is at the Heart of Getting a Healthcare Services Platform Right
Of all the post-deal priorities, few are as high on the list as understanding an acquisition’s actual revenue potential and getting it through the door and to your bottom line. The best way to tackle that priority is finding an RCM leader who can strategically establish and orchestrate a highly accurate and seamless revenue cycle for your platform. Then, no matter how many practices you acquire or how quickly you do it, you’ll stop losing valuable dollars to unnecessary revenue leakage.
Focus Search Partners’ healthcare practice has successfully found such leaders for other PE-backed healthcare platforms, and we’re ready to do the same for you.
Looking for your next director of revenue cycle, CRO, or VP of RCM? Contact Focus Search Partners today.