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Why We Need Both David and Goliath

The story of David and Goliath illustrates how “the little guy” can vanquish a giant. It’s a powerful tale. But what if we were to cast this well-known narrative in a new light: What if David and Goliath were to shake hands and work together?

Market dominance is a common theme in today’s healthcare environment. Hospitals, health systems and vendors all are striving to survive through M&A activity and other growth tactics. This has given rise to many “Goliath” companies, including several within the revenue cycle management (RCM) space. Often, they deliver much-needed economies of scale. Sometimes, they seem to promise they can do everything for everyone.

Yet with various specialties each making up just a small piece of the whole hospital-based picture, this approach may lose sight of the more intricate challenges of coding and billing for some complex specialties. While “Goliath” RCM companies might be able to handle volumes of claims across multiple service lines, hospitals and health systems should consider letting an experienced, focused “David” optimize specialty-specific coding and billing in certain areas, such as anesthesia.

This is the story of what happens when David and Goliath trade the slingshot for a complementary relationship — to everyone’s mutual benefit.


The key to any successful working relationship is the ability to identify and leverage the distinct advantages of each partner. In most cases, large multi-specialty RCM companies offer two crucial benefits for hospitals and health systems:

  • Capacity. They’re likely to have the resources necessary to handle high claims volumes, as well as to scale over time.
  • Convenience. A one-stop-shop for the RCM of multiple service lines can ease a hospital’s administrative oversight burdens.

Along with these benefits, however, comes a drawback. Specialty revenue might be negatively impacted by a vendor that’s a jack-of-all-trades but master of none. Fortunately, that’s where smaller, specialty-specific RCM partners shine.

These companies don’t try to keep up with every service line. Rather, they’re laser-focused on staying on top of evolving specialty markets — especially in complex hospital-based specialties. For instance, they scrutinize:

  • Countless federal and state rules and regulations. Anesthesia “provision/supervision” coding and billing requirements offer a prime example of a target with numerous variations.
  • Fast-changing, payer-specific rules, regulations and policies. Small, but crucial, nuances such as changes in bundled payment edits might fly under the radar in a large RCM company.
  • Multiple contract parameters. Even within the same payer, hospitals and health systems may have multiple contracts they must follow for different departments or even different specialties, each with their own specific parameters.

Furthermore, with the deep expertise afforded by specialty-specific companies, hospitals can conduct periodic reviews of policies, procedures and staffing models to improve efficiencies within high-revenue generators such as the OR. Larger companies might not have the willingness or ability to help evaluate the financial ramifications of employed vs. contracted anesthesia staffing models, for example.

Indeed, much is open to interpretation in RCM — especially in complex hospital-based specialties. Coding and billing are often as much “art” as “science.” That’s why it’s essential that hospitals and health systems are guided by experts who understand all of the rules and regulations within the big picture; the black-and-white as well as the gray areas.

Nuanced coding and billing knowledge enables hospitals and health systems to capture all reimbursement to which they’re legally entitled. Given continued declines in hospital operating margins, it’s especially important to raise clean-claim and collection rates, to lower denials and cost-to-collect, and to improve overall billing and collections turnaround for better cash flow. Partners must understand not only what’s happening from an RCM perspective but also why — and how – to compliantly address it all. That’s how hospitals protect both reimbursement and compliance integrity to ensure they keep that reimbursement.

Why David and Goliath together make sense

There’s a lot of uncertainty in healthcare right now. New reimbursement and care delivery models, continued consolidation trends and declining margins make headlines every day. True partners are those who help hospitals overcome these challenges with teamwork.

“Goliath” RCM vendors may allow hospitals to achieve broad-spectrum RCM proficiency and some ability to scale, but “David” companies can give hospitals the expertise and guidance needed to optimize specialty operations, minimize compliance exposure, and maximize specialty revenue. In the end, when David and Goliath work together, hospitals and health systems have the benefit of multiple perspectives to uncover new RCM opportunities and optimize existing ones. There’s plenty of room for everyone to contribute their talents and insights; collaboration strengthens us all.



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abeo Management Corporation (abeo) serves as a leading source of revenue cycle management and practice management with a specialization in anesthesia. The company leverages its people, processes, and software to serve independent practices, surgery centers, hospitals and healthcare systems with a scope of services that include billing, coding, transcription, practice management, and business consulting.

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