Finance
A. Improving Cash-on-Hand with Accounts Payable Management
What’s the scoop?
When the vultures are circling to consult the hospital into bankruptcy with exorbitant pricing or buy the hospital for $1, finding cash is the only real lifeline for the local community.
Solutions leadership found the cash in every-day accounts payable operations for a medium-sized hospital that needed to maintain payroll integrity.
Are there some details?
As with many financially troubled organizations, this hospital had experienced some gaps in finance leadership that remained unfilled. When that happens, important things can start slipping through the cracks. Solutions was brought in to take charge of accounts payable.
With immediate close oversight of outgoing vendor payments, Solutions leadership reduced monthly expenses by $1 million in just a few weeks. This level of savings was maintained over the entire Solutions tenure.
Given that $1 saved is $1 earned, this accounts payable management represented real money the hospital could retain and use for other priorities in stabilizing its financial situation.
Conclusion
Solutions leadership ultimately renegotiated vendor contracts and established internal structures to maintain accounts payable integrity for the long-term. The improved cash situation allowed the hospital to work through its lender issues.
When the vultures are circling to consult the hospital into bankruptcy with exorbitant pricing or buy the hospital for $1, finding cash is the only real lifeline for the local community.
Solutions leadership found the cash in every-day accounts payable operations for a medium-sized hospital that needed to maintain payroll integrity.
Are there some details?
As with many financially troubled organizations, this hospital had experienced some gaps in finance leadership that remained unfilled. When that happens, important things can start slipping through the cracks. Solutions was brought in to take charge of accounts payable.
With immediate close oversight of outgoing vendor payments, Solutions leadership reduced monthly expenses by $1 million in just a few weeks. This level of savings was maintained over the entire Solutions tenure.
Given that $1 saved is $1 earned, this accounts payable management represented real money the hospital could retain and use for other priorities in stabilizing its financial situation.
Conclusion
Solutions leadership ultimately renegotiated vendor contracts and established internal structures to maintain accounts payable integrity for the long-term. The improved cash situation allowed the hospital to work through its lender issues.
B. Billing Management to Increase Cash-on-Hand
What happened here?
A community hospital had major financial losses and needed to improve its cash position for completion of negotiations for affiliation with another organization.
Solutions leadership quickly improved billing processes, known in total as revenue cycle processes, to create a positive bottom line for the first time in months.
How did that happen?
Unfortunately, billing staff was not guided by claim data analysis. Plus, medical coding personnel had not had the opportunity to update training.
Staff from Solutions established a relationship with the billing staff and began to sort through claims data. Together, billing priorities were implemented and reimbursements increased. Billing staff became enthusiastic about the results and became more effective with the Solutions partnership.
Solutions also recommended the medical coding staff be supported by outside coding experts. Again, the positive and supportive approach led to increased enthusiasm and effectiveness of staff.
Conclusion
Solutions staff often find that client billing and other revenue cycle staff welcome the help and expertise. Virtually everyone in a community hospital wants to be part of making the hospital successful. So billing staff members become excited when they see more effective ways to do their jobs and help the whole community.
A community hospital had major financial losses and needed to improve its cash position for completion of negotiations for affiliation with another organization.
Solutions leadership quickly improved billing processes, known in total as revenue cycle processes, to create a positive bottom line for the first time in months.
How did that happen?
Unfortunately, billing staff was not guided by claim data analysis. Plus, medical coding personnel had not had the opportunity to update training.
Staff from Solutions established a relationship with the billing staff and began to sort through claims data. Together, billing priorities were implemented and reimbursements increased. Billing staff became enthusiastic about the results and became more effective with the Solutions partnership.
Solutions also recommended the medical coding staff be supported by outside coding experts. Again, the positive and supportive approach led to increased enthusiasm and effectiveness of staff.
Conclusion
Solutions staff often find that client billing and other revenue cycle staff welcome the help and expertise. Virtually everyone in a community hospital wants to be part of making the hospital successful. So billing staff members become excited when they see more effective ways to do their jobs and help the whole community.
C. General Financial Improvements
What’s this situation?
A large rural health system had just acquired a large critical access hospital and needed an assessment of financial operations.
Solutions leadership found several opportunities to improve financial performance from updating charges to renegotiating vendor arrangements. Solutions was asked to implement these opportunities resulting in improvements valued at $650K.
What else happened here?
Well, there was a crisis with the anesthesia team. Some were so dissatisfied with the work situation, retention of the team and the general surgeon was threatened.
Lack of anesthesia services would have caused a decline in surgical cases and financial performance for this hospital, as well as four others.
Solutions leadership collaborated with the surgeons, anesthetists, and hospital administrators to resolve anesthesia team issues, maintaining the surgical caseload and revenue stream.
Conclusion
In its assessment, Solutions found that security surrounding the pharmacy was weak. Solutions staff worked with local clinical leadership to implement more effective pharmacy security while balancing the need for adequate clinical use access. The amount of financial savings attributed to this effort is unknown as it’s difficult to know with any accuracy the medication amounts that may have been misappropriated.
A large rural health system had just acquired a large critical access hospital and needed an assessment of financial operations.
Solutions leadership found several opportunities to improve financial performance from updating charges to renegotiating vendor arrangements. Solutions was asked to implement these opportunities resulting in improvements valued at $650K.
What else happened here?
Well, there was a crisis with the anesthesia team. Some were so dissatisfied with the work situation, retention of the team and the general surgeon was threatened.
Lack of anesthesia services would have caused a decline in surgical cases and financial performance for this hospital, as well as four others.
Solutions leadership collaborated with the surgeons, anesthetists, and hospital administrators to resolve anesthesia team issues, maintaining the surgical caseload and revenue stream.
Conclusion
In its assessment, Solutions found that security surrounding the pharmacy was weak. Solutions staff worked with local clinical leadership to implement more effective pharmacy security while balancing the need for adequate clinical use access. The amount of financial savings attributed to this effort is unknown as it’s difficult to know with any accuracy the medication amounts that may have been misappropriated.
D. More Accounts Payable Management
What’s the story?
Another county hospital found itself in financial trouble when the finance leader departed unexpectedly. Solutions was brought in to stabilize the situation.
In this case, Solutions staff found that while the vendor contracts in place had pretty good pricing, the staff had not been trained to use them. As a result, the troubled hospital was paying far more than it could have been for equipment and supplies.
What happened next?
Well, of course, Solutions partnered with the local staff to access the better pricing.
The collaboration and training was so successful, the local staff were soon eagerly steaming ahead on their own acquiring the better pricing.
Anything else to know?
In this case, by re-establishing use of group purchasing arrangements, Solutions saved the hospital $600K per year.
Another county hospital found itself in financial trouble when the finance leader departed unexpectedly. Solutions was brought in to stabilize the situation.
In this case, Solutions staff found that while the vendor contracts in place had pretty good pricing, the staff had not been trained to use them. As a result, the troubled hospital was paying far more than it could have been for equipment and supplies.
What happened next?
Well, of course, Solutions partnered with the local staff to access the better pricing.
The collaboration and training was so successful, the local staff were soon eagerly steaming ahead on their own acquiring the better pricing.
Anything else to know?
In this case, by re-establishing use of group purchasing arrangements, Solutions saved the hospital $600K per year.
E. Reimbursement – The Beginning to the End or Billing to the Cost Report
Whatever does this mean?
Reimbursement in health care, particularly for hospitals, has become extremely complex. Often health care executives and consultants specialize in only specific areas of hospital reimbursement.
For instance, hospital board members think the annual audit by outside auditors gives an indication of how well billing is being done. Unfortunately, the annual audit is focused on a review of the major hospital financial statements and whether they are reasonably accurate given the information provided to the auditor. There is no review of actual billing processes.
Other experts might focus on certain parts of billing like coding or collections. They typically provide no insight on the other steps in billing. The Healthcare Financial Management Association (HFMA) has identified over thirty steps in revenue cycle and many of these individual steps are broken down into even more detail.
So is there a Solutions story here?
In any number of client hospitals, Solutions leadership has assessed the entire revenue stream from beginning to end. Solutions has made immediate improvements in the billing process to increase the inflow of cash. It has also overseen cost report filings and re-openings resulting in positive Medicare reimbursement adjustments of over $1 million.
Conclusion
Along with Solutions expertise in accounts payable management, few other consultants can provide such a complete assessment of a health care organization’s cash flow.
Reimbursement in health care, particularly for hospitals, has become extremely complex. Often health care executives and consultants specialize in only specific areas of hospital reimbursement.
For instance, hospital board members think the annual audit by outside auditors gives an indication of how well billing is being done. Unfortunately, the annual audit is focused on a review of the major hospital financial statements and whether they are reasonably accurate given the information provided to the auditor. There is no review of actual billing processes.
Other experts might focus on certain parts of billing like coding or collections. They typically provide no insight on the other steps in billing. The Healthcare Financial Management Association (HFMA) has identified over thirty steps in revenue cycle and many of these individual steps are broken down into even more detail.
So is there a Solutions story here?
In any number of client hospitals, Solutions leadership has assessed the entire revenue stream from beginning to end. Solutions has made immediate improvements in the billing process to increase the inflow of cash. It has also overseen cost report filings and re-openings resulting in positive Medicare reimbursement adjustments of over $1 million.
Conclusion
Along with Solutions expertise in accounts payable management, few other consultants can provide such a complete assessment of a health care organization’s cash flow.