The California Sutter Health Approach - Research Paper Example

The California Sutter Health Approach Introduction Sutter health provider is a non profit network found in Northern California based on community health care services. This network however, decided to introduce an effective interface within their accounting system with an aim of enhancing revenue collection of the provider especially from their self pay patients. This was after the network had realized that limitations were within their revenue collection accounting system that hindered effective performance, measures and this fragmented centers of service provision within the network. The office of account and its representatives had limited access to accurate information and hence; the service provider had to develop a concrete program and deploy it within its system to gear up and converge the prevailing limitations. Objective The United States of America healthcare system network has huge revenue collection within its patients. However, the payment system has laid down proper measures, targeting revenue collection procedures to curb problems that have affected the accounts department on the traditional ways they have been using. The main objective of this research is to identify accounting approach and practices California Sutter used in defining and solving its collection problems and giving concrete solution on the based prevailing issue (Rauscher & Wheeler, 2008). Literature review In the year 2006, the Sutter Health service provider committed itself in giving their staff patient financial services with an aim of improving their patient collections. It was at this point that the staff began to work towards the registration process with an aim of transferring all function within financial approach. The payment system has laid down proper measures, targeting revenue collection procedures to curb problems that have affected the accounts department on the traditional ways they have been using. This research however, it is going to analyze the reasons, meetings that were held, discussion laid down, steps and results that Sutter health engaged to provide quality services within the states of America (Souza & McCarty, 2007). Background Information Sutter Health service provider is a non-profit organization found in Sacramento States, CA based on the hospital system and healthcare practices. In the line of duty, the firm faced a major problem since within the Sutter family that comprises 48, 000 physicians, employees and volunteers, they were overwhelmed on providing services of more than 100 northern California cities and towns. Form the data that were collected by Souza and McCarty, it was found that Sutter Healthcare system was among the largest health service provider in Northern California and this triggered the management of Sutter health service provider to implement new strategies on how to increase collections within this towns and cities (Solomon, 2011). There was a need on when and how to collect its payments due; a reason that the Sutter Health provider considered in maneuvering and instituting new management skills. The introduction of Accounts receivable (AR) however, dominated this issue on regards to revenue collection. The introduction of Accounts receivable was an outstanding solution, though the Accounts receivable department had to work hand in hand to provide and solve a problem that arose during the deployment of these new strategies. The problem behind this system was that, each facility within Sutter Health provider acted as an independent factor on delivering information on revenue collection. There were numerous operating and accounting systems that were employed, making the exercise impossible in obtaining reports for every location. The practices however, differed within the prevailing organizations (Trans Union, 2007). Key problems and Issues Sutter health encountered When dealing with any patient, you need have clear information about the patient before providing any service to him. This is a scenario and problem that the upfront payment department had in Sutter Health care system since; they were supposed to have clear and complete information about the client before they could serve him or her. During the traditional form of revenue collection, Sutter Health care service provider encountered a major problem that saw payment information being processed in the back end. During this time, the PFS staff had to wait back end section to process the information of the customer so that they could provide payments breakdown for the customer, one of the issues that slowed down the whole processes within the Sutter Healthcare system hence; consuming time. Traditional way of revenue collection portrayed inefficiency within accounting department, resulting into low quality services as well as leading to low revenue collection (McKenzie, 2010). It took most of the time for the managers and the entire staff to provide breakdown on revenue collection hence hindering the identification of benchmarks on time. This however, forced the entire community of Sutter Healthcare System to find programmers for the purpose of providing suitable and real time revenue collection system empowered with high sensitivity in regards to accounting section. Solutions that were employed by Sutter Health to curb these problems Sutter attempted to overcome the mentioned challenge by implementing changes in their system for efficient operation. These implementations include; transfer of back end task to the front desk, provision of accurate and complete information to managers, provision of effective evaluation performance and integration of all data within the revenue collection system. The implementations however, enabled the Sutter health care provider to establish staff performance index and various primary benchmarks. Some of the benchmarks include; Unbilled A/R days, Gross A/R days, Major payer A/R days, Cash Collection, Billed A/R days and Percentage of A/R over 90, 180 and 360 days which triggered the aspect of performance contract within Sutter Health care staff for the purpose of time management (Sutter, 1974). Other solutions were the empowerment of PFS members on regards to responsibility that were directed on the service provider’s accounts. In addition, front end collection strategy was introduced so overcome the prevailing problem and this led to training program that were designed henceforth to the existing PFS members as well as the entire staff. The training included the staff being trained on the communication skills that articulates autonomy, effectiveness and motivation to the entire Sutter Health employee (Daniels, 2006). Accounting Practices Used The identification and solutions used by Sutter Health on the prevailing problems in regards to accounting practices were accountability and transparency. People handling revenue collection had to go evaluation processes and this enable Sutter to identify the prevailing problems henceforth encouraging responsibility and accountability among their employees. Cost reduction was also another accounting practice that Sutter healthcare system adopted. This included the increase of profits that could only be triggered when margins are increased and cost reduced. In addition, efficiency in the available resources was another accounting practice that could trigger optimal output amount within Sutter healthcare system. The approach that was used by Sutter Health was effective and positive. This is because the approach addressed the concerns raised by the network and the entire community of California State. Sutter health was concerned with the self-pay patient’s health and the growing number as well as the thinning amount of revenue collected. The need to increase the amount of collecting from this section of market was the primary objective of developing this strategy and improvement could be prevailed to curb the situation. The valuation can be realized by how well the strategy Sutter health is able to deliver on regards to the set goals and the success at large.. When it comes to Sutter Health it is estimated that revenue collection from the self- pay patients increased by $78 million after the health system implemented this strategy. Alternative Solution The strategies that Sutter Healthcare employed in its system were in regards to the improvement of accountability and autonomy of the entire staff so that the total revenue collection could be enhanced. In its operation, Sutter healthcare only set their solutions on the benchmarks and staff empowerment. In this observation, the alternative solution Sutter Healthcare service provider could employ was to reduce the size of amount payable which include money owed to the institutions and also the service provider could reduce the full cycle that refers to the amount of time patients takes to settle their dept. Conclusion In conclusion, Sutter health provider is a non profit network found in Northern California based on community health care services. This network however, decided to introduce an effective interface within their accounting system with an aim of enhancing revenue collection of the provider especially from their self pay patients. This was after the network had realized that limitations were within their revenue collection accounting system that hindered effective performance, measures and this fragmented centers of service provision within the network. The office of account and its representatives had limited access to accurate information and hence; the service provider had to develop a concrete program and deploy it within its system to gear up and converge the prevailing limitations. Sutter attempted to overcome the mentioned challenge by implementing changes in their system for efficient operation. These implementations include; transfer of back end task to the front desk, provision of accurate and complete information to managers, provision of effective evaluation performance and integration of all data within the revenue collection system. The implementations however, enabled the Sutter health care provider to establish staff performance index and various primary benchmarks. Some of the benchmarks include; Unbilled A/R days, Gross A/R days, Major payer A/R days, Cash Collection, Billed A/R days and Percentage of A/R over 90, 180 and 360 days which triggered the aspect of performance contract within Sutter Health care staff for the purpose of time management. Other solutions were the empowerment of PFS members on regards to responsibility that were directed on the service provider’s accounts. In addition, front end collection strategy was introduced so overcome the prevailing problem and this led to training program that were designed henceforth to the existing PFS members as well as the entire staff. During the traditional form of revenue collection, Sutter Health care service provider encountered a major problem that saw payment information being processed in the back end. During this time, the PFS staff had to wait back end section to process the information of the customer so that they could provide payments breakdown for the customer, one of the issues that slowed down the whole processes within the Sutter Healthcare system hence; consuming time. Traditional way of revenue collection portrayed inefficiency within accounting department, resulting into low quality services as well as leading to low revenue collection. Other additional benefits were also realized due to the deployed new system. Raising revenue was however the major concern but other issue like implementation of the program translated to other additional benefits were reported. These benefits include improved quality of care for the patient. In regards to the solutions identified by Sutter health, the idea was to bring the health customers onboard. The system did this by factoring the customer needs into the system making it customer friendly by delivering quality and efficient services. The customers now spend less time processing payment while at them time, they get to know of the cost they will incur before receiving the services. The system has also reduced the number of patients being denied treatment as result of streamlined inventory system within Sutter healthcare system. In its operation, Sutter healthcare only set their solutions on the benchmarks and staff empowerment. In this observation, the alternative solution Sutter Healthcare service provider could employ was to reduce the size of amount payable which include money owed to the institutions and also the service provider could reduce the full cycle that refers to the amount of time patients takes to settle their dept. The need to increase the amount of collecting from this section of market was the primary objective of developing this strategy and improvement could be prevailed to curb the situation. The valuation can be realized by how well the strategy Sutter health is able to deliver on regards to the set goals and the success at large.. When it comes to Sutter Health it is estimated that revenue collection from the self- pay patients increased by $78 million after the health system implemented this strategy. References Daniels, B. (2006).Movie Money: Understanding Hollywoods (Creative) Accounting Practices, 2nd ed. [Paperback]: Washington: Silman-James Press; 2 edition McKenzie, D. (2010).California Real Estate Principles [Paperback]. United Kingdom: South- Western Educational Pub; 9 edition. Rauscher S. & Wheeler J. (2008). Effective Hospital Revenue Cycle Management. Journal of Healthcare Management Souza, M. & McCarty, B. (2007). From bottom to top: How one provider retooled its collections [electronic version]. Healthcare Financial Management. 61(9). 67-73. Sutter, J. (1974).Landslide and subsidence liability (California practice book) [Paperback].USA: California Continuing Education of the Bar. Solomon P. (2011). The State of Health Care Revenue Cycle. July 28, 2011. Retrieved Trans Union (2007). Healthcare Collections: How Full Cycle Improvements Reduce Bad Debt. July 28, 2011. Retrieved from http://www.transunion.com/docs/healthcare/businessneeds/healthcareCollectionsWP.pdf Read More