How Saint Joseph s Hospital of Atlanta Uses Better Management and Reporting to Improve Productivity and Relations with Third-Party Vendors

Transcription

1 How Saint Joseph s Hospital of Atlanta Uses Better Management and Reporting to Improve Productivity and Relations with Third-Party Vendors February 2012

2 Agenda What is Outsourcing Management St. Joseph s Hospital of Atlanta Experience Self-Diagnostic

3 Clear Logic to Outsourcing Among the reasons for outsourced solutions include Vendors have scale to invest in purpose-built technology Vendors are specialists in unique aspects of healthcare, e.g. self-pay, MVA, Work Comp, Vendors can have tailored HR infrastructure Providers can cost effectively access specialized resources Providers can reduce fixed investment and convert to a variable cost structure Providers can seek out best-in-class performers Providers have a check on internal efficiency, effectiveness

4 Typical Outsourcing Management To many, outsourcing management is A one time contract negotiation Excel-based tools Spot-checking account reconciliation A one time hand off, out of sight Win-Lose proposition Spot checking vendor activity Spot-checking vendor invoices Relying only on vendor reports

5 Typical Outsourcing Management Current cash at risk is outpacing typical approach More Work Comp and MVA Cash at Risk Eligibility volume Rising uninsured Run-up in BAI Volume of Small Balance MC Follow-up 1990

6 Increasing Financial Pressures Given broader operating trends, hospitals must improve cash and cost 27% Anticipated Medicare Cuts 21% Annual PPO Deductible Increase % 5% 4% 3% 2% 1% 0% Hospital Operating Profit Margins Sourcss: The Kaiser Family Foundation and Health Research & Educational Trust Employer Health Benefit Survey; Thomson Reuters Action OI data, March 2011; Health Leaders Media, December 8, 2011

7 New View of Outsourcing Management Outsourcing management Management effort to systematically improve performance Combines people, process and technology Unlocks significant value Cash gains of 10-30% Resource efficiencies Compliance improvements Reduced breakdowns, process hiccups

8 Agenda What is Outsourcing Management St. Joseph s Hospital of Atlanta Experience Self-Diagnostic

9 St. Joseph s Hospital of Atlanta Atlanta s oldest hospital - Founded by the Sisters of Mercy in bed acute-care facility Leader in cardiac, neurologic, vascular, gastrointestinal, respiratory, orthopedic and cancer care 750 physicians Top 50 hospital for clinical excellence and patient safety Current transition from Catholic Health East to Emory Healthcare Currently use IDX

10 Change Catalyst Outsourced operations were good but knew there was more Network of self-pay and insurance outsourcers Electronic connections Each unique with unique maintenance Little information passed back to SJHA Mostly administration Reliant on vendor reports, limited ability to do independent account-level analysis Invoice review and inventory management were spot checks Exceptional requests via fax, , phone and no sense of volume or trends Spending millions in vendor fees without visibility. Big expense Early Out Agencies Collection Agencies SJHA Managed Care Follow-Up Eligibility Agents No real value add No ability to really diagnose root causes No independent understanding of SJHA vendor vs. Market/Peers Improvement meant changing vendors

11 New Technology Platform Deployed Connance Agency Manager platform to empower SJHA resources and streamline day-to-day operations Connance Agency Manager SJHA-Specific Business Rules Early Out Agencies Collection Agencies SJHA Database of Placed SJHA Inventory Hospital Communications Portal Managed Care Follow-Up Reporting Suite Eligibility Agents Single IT connection for SJHA, via Web moving vendor connectivity to Connance Platform takes on account placement, recall, reconciliation and tracking Rule-driven, executes and monitors hospitalspecific policy and procedures, flag issues Comprehensive reporting: recoveries, agency activity, exceptional issues 3 rd party commissioning calculations Integrated work queue communication to track hand-offs and special requests Handled virtually any vendor type and could be changed over time

12 Accounts No Longer Falling Through the Cracks SJHA employees could manage account recalls and see if any were stalled or if trends were positive or negative over time SJHA Recall Activity (Period XX to YY) Stop / Recall Reason Closures Summary Subsequently Placed to Next Agency Closed Never Replaced Bankrupt (Recalled) 10 $10, $1, $9, Placement period expired (Recalled) 3938 $5,081, $1,458, $3,622, Cease and desist (Recalled) Deceased no asset (Recalled) Account handling code update (Recalled) Hospital request (Recalled) 2 $1, $2, $4, $88, $ $ $ $ $1, $2, $4, $88, Recall automation set to SJHA specifics Selected reasons automatic Hospitall billing insurance (Recalled) Charity eligibility (Recalled) Credit balance (Recalled) 5 $1, $20, ($752,535.26) 0 $ $ $ $1, $20, ($752,535.26) Selected reasons prompt SJHA employee review

13 Identifying Accounts Without Recent Activity Accounts without recent letter activity were identified and SJHA-vendor reviews were data driven to understand why and what could be changed Agency ABC Days Since Last Call or Days Since Last Letter Activity Type Days Since Placement Placement Date Range # Open Placements # w/o Calls or # w/o Letters Letters Letters Letters Letters Letters Letters 91+ 9/8/2011 ~ 9/22/2011 8/24/2011 ~ 9/7/2011 8/9/2011 ~ 8/23/2011 7/25/2011 ~ 8/8/2011 7/10/2011 ~ 7/24/2011 1/5/2011 ~ 7/9/2011 1, , , Total 6, ,883 1,973 1,

14 Identifying Accounts Without Recent Activity Accounts without recent calling activity were identified and SJHA-vendor reviews were data driven to understand why and what could be changed Agency XYZ Days Since Last Call or Days Since Last Letter Activity Type Days Since Placement Placement Date Range # Open Placements # w/o Calls or # w/o Letters Calls Calls Calls Calls Calls Calls 91+ 9/15/2011 ~ 9/29/2011 8/31/2011 ~ 9/14/2011 8/16/2011 ~ 8/30/2011 8/1/2011 ~ 8/15/2011 7/17/2011 ~ 7/31/2011 7/1/2011 ~ 7/16/ Total 2,301 1,

15 Outsourcing Network Performance Transformed SJHA employees with data and technology now work with vendors for more and better activity Category More of the Right Activity Better Reporting Integrity Description of Source of Value Heightened vendor activity Spot accounts falling through the cracks (e.g., failed to load at vendor; no activity at vendor) Increase outbound effort Improved vendor monthly reviews SJHA no longer dependent on vendor provided data Agency v Peer analysis to put performance into industry context Transparent discussions about opportunities for improvement Compliance Ensure letters and calls done per policy Eliminating risk of accounts placed with multiple agencies Eliminating inappropriate activity after closure Delivered account-level report of activity history for accounts listed on Medicare cost report Auditors 100% approved all accounts in efficient and speedy process Greater Network Flexibility Control of Vendor Expenses Seamlessly replaced insurance follow-up vendor Reduced SJHA IT work to add new category of vendors Agency RFP included vendors based on performance data across Connance network Policy and process changes reduced cost-to-collect 15% 3 rd party based calculation of fees due to vendors eliminates duplicate payments and incorrect vendor credits

16 Cash Yields Improved Significantly More of the right activity is leading directly to more cash Early-out yield up 6 points on year-over-year basis (20% increase) and Bad Debt yield up across all vendors 40 % Collection Rate on BAI Accounts in Active A/R 30 $ Collected Per BAI Account for Vendor # Q2 Q3 0 Jan-July Aug-Sept

17 Results Summary Hard ROI is over 10:1 with additional benefits in soft areas like compliance Improvement in Activity: Percentage of accounts touched within the last fifteen days increase 25%. Category Cash Yield Source of Value Early-out collections: 2011 yield increased by 6pt over 2010 B/D #1: $5/account increase in collections Annual Cash Value 932,000 26,000 Cash Increase: Gains across both, BAI and uninsured. Performance positively off-trend: 20% improvement in collection rates while others falling more than 10%. Business Office FTE Efficiency IT Support Gains B/D #2: $27/account increase in collections Reconciliation process: Eliminated ~3 days/month of Manager s time Daily vendor liaison tasks (e.g., recall, exception requests): Saved 1 FTE Single point of contact for IT and data issues 1 day / month freed up Efficiency in changing a vendor (if 1 per year) 110,000 60,000 9,000 Total Hard Benefits $1,132,000

18 Agenda What is Outsourcing Management St. Joseph s Hospital Atlanta of Experience Self-Diagnostic

19 There Has To Be a Better Way

20 Sizable Issues Common Inventory issues become sizable with manual review 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Percent of Accounts with Reconciliation Issue 34% 14% 14% 12% 5% 5% 6% Inventory 1 Inventory 2 Inventory 3 Inventory 4 Inventory 5 Inventory 6 Inventory 7 Source: Connance

21 Outsourcing Still Requires Ongoing Support One-off requests can occur on up to 20% of accounts Cancel and recall requests Request for additional charge information Request for settlement outside guidelines Request to consider for charity qualification Request for account activity update Request for copies of letters Some exceptional request Account resolved without special request...and so on

22 Leading Operations Have Common Characteristics Embracing these lowers costs, delivers more cash (20%?!) and improves compliance and control Management Ownership Defined strategy and architecture Articulated up-to-date policies and procedures Ongoing engagement Data Driven Apples to Apples financial and activity reporting Account-level drill-down visibility Rigorous reconciliation processes Technology Enabled Centralized data Rule driven, automated movement and pushing up exceptions

23 Self-Diagnostic: Telltale Signs of Opportunity No improvement plan No recent review of hospital policy/contract Manual inventory reconciliation and invoice review Rely on agency reports and limited drill-in ability Cumbersome administration of dayto-day (hand-offs, s, ) Constant file interface issues Frequent lost accounts No recent changes in vendors or vendor services

24 Contact Information Steven Levin Chief Executive Officer Connance, Inc. Rebecca Black VP, Revenue Cycle Saint Joseph s Hospital of Atlanta BBlack@sjha.org