ECU Health increases margin, reduces costs through revenue cycle alignment

Challenge

ECU Health is a mission-driven, 1,708-bed academic health care system serving more than 1.4 million people in 29 eastern North Carolina counties.  The not-for-profit system encompasses about 14,000 team members, nine hospitals, 1,100 academic and community providers, and 185 primary and specialty clinics across 110 locations. ECU Health Maynard Children’s Hospital and the flagship ECU Health Medical Center, a Level I Trauma Center, serve as the primary teaching hospitals for the Brody School of Medicine at East Carolina University. ECU Health and the Brody School of Medicine share a combined academic mission to improve the health and well-being of eastern North Carolina through patient care, education, and research.

As part of the health system's financial transformation strategy, leaders identified a multi-year trend of increases in accounts receivable (A/R) days and A/R aging percentages, as well as decreases in net collections yield. Leaders knew they needed to transform their revenue cycle approach to improve performance. As a result, the health system initiated a transformational project, which included an engagement with Guidehouse. Project goals were to:

• Develop a culture that values team development, strives to change the constraints mindset to a growth and winning mindset, and enhances psychological safety through empowerment, transparency, and celebrating learning from problem-solving 
  • Rebuild the revenue cycle as an integrated component of operations across the system through investments in people, process, and technology
• Generate better organizational alignment with areas impacting the revenue cycle
• Enhance transparency with key performance indicators (KPIs) and other potential performance opportunities
• Create targeted workstreams
• Leverage technology to accelerate and sustain improvements
• Achieve long-term financial viability
  
   

Approach

The cross-disciplinary initiative began with an in-depth assessment of ECU Health’s revenue cycle and managed care functions. With our guidance, ECU Health leaders assembled a comprehensive plan to improve performance by:

• Creating business cases prioritized by impact and workstream development to support these work efforts
• Developing more efficient project management and return on investment tracking processes
• Addressing individual workstream needs, including revenue integrity, denials, managed care, self-pay improvements, strategic pricing, and reduction in A/R days and uncompensated care
• Developing and implementing new policies, procedures, and training to sustain improvements

An integrated approach

ECU Health leaned on us for support with throughput improvements in A/R, clinical appeals, and interim management, engaging our Advisory and Managed Services teams for enhanced strategic oversight and operational execution. Working together, we realigned their revenue cycle structure toward a future-state vision that included staffing analysis, job description development, and recruiting and onboarding of new revenue cycle leadership to sustain long-term improvements.

The focus included:

• Avoidable write-offs: Task forces conducted root cause analysis on key trends such as authorization procurement, medical necessity, and credentialing.
• Charge capture: By establishing ownership at the clinical level and integrating training with revenue integrity efforts, we supported a charge reconciliation program revamp and identified opportunities to minimize missing charges.
• Point-of-service (POS) collections and patient balance education: A POS program overhaul boosted prepayment collections by providing patient estimates and implementing a patient loan program. Adding a financial assistance vendor significantly increased patient advocacy screenings by 1,000%, leading to an improved patient experience.

Overall, this multifaceted approach allowed ECU Health to be successful in building a new culture to not only optimize revenue cycle processes but also achieve measurable, sustainable improvements across key areas of their financial operations.

Impact

Eighteen months after the project had begun, ECU Health realized a total income statement improvement of more than $93.1 million from improvements in uncompensated care, avoidable write-offs, and hospital charge capture. Cumulative cash acceleration reached almost $113.6 million by and is projected to rise further with the reduction of A/R days by 14.3 days.

Notably, ECU Health achieved these successes while maintaining or improving the patient experience. ECU Health Medical Center has been nationally recognized as a leader in patient experience for the second consecutive year, according to PEP Health’s 2025 rankings.

Other significant improvements included:

• A/R management/cash acceleration: Accelerated $103.4 million in hospital cash and $10.2 million in physician cash.
• Avoidable write-offs: Reduced the hospital avoidable write-off rate by 50% and the professional avoidable write-off rate by 29%.
• Uncompensated care: Reduced the health system’s bad debt rate by 19%.