How One Provider Retooled Its Collections: The California Sutter Health Approach - Coursework Example

 From Bottom to Top: How One Provider Retooled Its Collections The California Sutter Health Approach Introduction With the costs of medical coverage increasing every day, many American families cannot afford even basic medical facilities. Statistics indicate that as many as 47 million Americans have no medical insurance, but further analysis shows that most of them include middle class families that can afford to pay. It is therefore highly commendable that the Sutter Group, a not-for-profit health system headquartered in Sacramento, North California, has been providing medical services and facilities to patients and their families in more than 100 towns and cities across Northern California. At Sutter Health, many of California’s best doctors, nurses and other medical personnel join hands and pool their expertise to bring healing and comfort to those who need it (Sutter Health website, 2012). Sutter is renowned for its services in the areas of cancer and cardiac care, orthopedic treatment and women and children health care. The group takes its name from John Sutter, one of the earliest European settlers in California and one of its healthcare pioneers. This paper shows how Sutter Health is not only revolutionizing healthcare by providing it where needed but has also managed to change the mindset of consumers who are encouraged to pay for it when they can afford to do so. Summary of the Case and its Importance The case at hand is a good example of how a not-for-profit organization has changed the mindset of the users of its services by asking them to pay for it. While we fully understand that hospitals in the private sector are run for profit, and that Government funded hospitals are usually understaffed and have long wait times, most people are inclined to reach into their pockets for support and donations to not-for-profit institutions who they see doing good work out of a spirit of kindness, caring and benevolence. No doubt, Sutter Health has attracted a large following of good health professionals but it must be remembered that there are costs to be incurred even when running a non-profit organization. Salaries for staff, cost of medicines, lighting, equipment and other costs can be a burden on the best of organizations. Realizing this, it was imperative that Sutter Health had to think out of the box and attempt to ask the patients it serves and their families to pay for their treatment and thereby contribute to the running costs and continuity of the services being provided to one and all. While most Americans are keen to use freely provided healthcare services, it is clear that the amount of services provided at Government run institutions cannot match the demand for them. That is why many people are forced to pay for healthcare at privately run hospitals. By instituting a billing system at its registration desk and training the front desk staff to ask for payment while registering the patients, Sutter Health managed to achieve a turnaround in people’s thinking and they do not usually question the reasonableness of this request. Improving and Changing Accounting Practices & the Use of Financial Information Although Sutter Health already had a fully functioning Accounting System at their Sacramento based head office, and had started training their Patient Financial Services staff members, the system took a leap forward when this training was also given to the staff at their reception front desks. Aging the Accounts Receivable position of patients placed under each PFS staff, getting key statistics and establishing collection and billing benchmarks were all incorporated into the plan. While previously they had to depend on a specially skilled programs to generate MIS reports about Receivables and Cash Collections, they now started a new system with capabilities to show the Gross and Net Accounts Receivable, Cash Collected, Percentages over 90, 180 and 360 days, Major Payer A/R days etc. (Souza & McCarty, 2007, p 68). This enabled a better analysis of the situation. Making POS Collections the Norm for PFS Staff The second part related to the training of the front desk based staff at reception. While those with the Account Manager-type responsibilities had a number of patients under their care, the front desk staff had to assume responsibility for all the patients that were admitted on their watch. Today each person at the Central Business Office has their own customized dashboard to track progress in meeting team and individual targets (Souza & McCarty, 2007, p 69). The new system has made point of sale collections the norm for PFS staff, as we shall see below. Empowering PFS Staff and Managers via Result Indicators and Query System Sutter Health has in effect implemented a high tech customized account reporting system that allow PFS staff to automate and prioritize their work lists, sort accounts in various ways, and also look at their personal position within team rankings and office wide, based on the total of amounts collected versus receivable. Similarly, managers are equipped with their own range of supervisory level tool and reports, enabling them to query any aspect of receivables from time and performance based to individual patient accounts, aging of accounts, reports on dues up to 18 months, problem patient accounts, average daily revenues and even anticipated collections. It is quite likely that this query and results indicator system has revolutionized the entire concept of receivables and collections in the healthcare industry, by bringing in a number of ways to increase operational, billing and collection efficiencies. Anticipating and Dealing with Problem Areas in Registrations and Collections It is a known fact that more than half of the billing elements are encountered at the front desk. Examples include patient registration, payment for OPD visits and various other medical procedures. The balance of these events is encountered as care progresses or complications arise depending on the patient’s condition and response to treatment. Therefore collecting cash at the front desk before the procedures can be instituted is a good opportunity to reduce collections by 50 percent or more. It is important that hospital front desk staff take full advantage of this opportunity. Accordingly the decision support system in place at Sutter Health requires that each patient registration be analyzed by a decision engine to identify potential problems before the patient leaves the registration desk. Comprehensive Training in Billing, Collections and Decision Making In addition to implementing a new system, the most important part of the puzzle is to train the PFS staff effectively and as comprehensively as possible to deal with known problems in the registration, billing and collections process. Workers compensation for accident coverage may not be evident, the patient’s guarantor may be under 18 years of age, the marital status might be widowed with no next of kin information available, they may be over 65 years old with no Medicare insurance plan, the secondary payer questionnaire is missing etc. Another issue regards patients with duplicate medical records, duplicate addresses, returned mail for billing payments and delinquent accounts at the hospital combined with bad ratings for credit card usage. In these cases, a clear plan of action has to be implemented in accordance with office policies. It has simplified the decision process somewhat, yet the bulk of decision making still remains in the hands of the PFS staff. There are always some new situations that crop up now and then. A denials management system has also been instituted, enabling management to recognize the most common and unique problems being encountered and whether a solution can be arranged that can cover some problem areas and increase the rate of admissions and registrations. The training program at Sutter Health concentrates on the problem areas of both CBO and PFS staff. While CBO staff is not reluctant to ask for cash up front, they often are flummoxed by the idea of taking responsibility for individual patient cases. On the other hand, PFS staff is generally not accustomed to ask for cash during the process of registration and admissions. They have to be trained to do so while generally accepting responsibility for patient collections. Getting Patients on Board The final piece of the puzzle is of course to get the patients on board to understand and accept the system. Experience has shown that most patients with worker compensation coverage know and appreciate the billing process. As the PFS staff learned to handle patient queries and give details of billing in advance, the process became easier to implement. In most cases it was simply the reasonableness of the amounts and the anticipated costs that were the causes of concern. Result: Marked Improvements in Collections and Patient Registrations The end result of it all has been a marked improvement in the patient registration, billing and cash collections process, with a reduction in A/R days from 65 to 59, with each day signifying $13 million (Medassets.com website, 2012). An Alternative Approach to Solving the Collections and Registrations Problem One approach would be to automatically ask for advance deposits from institutions registering their employees with Sutter Health on a regular basis. This amount could then be utilized as patients were admitted, reducing the need for cash payments on registration. Another approach would lie in automatically consolidating the billing records and details of different departments in a centralized database, so that time in minimized while calculating a patient’s total bill at any given time. The anticipated cost for regular procedures and the cost of different options available should also be known and explained to patients and caregivers, so that decisions for alternative treatment are possible. References Souza, M. & McCarty, B. (2007). From bottom to top: How one provider retooled its collections [electronic version]. Healthcare Financial Management. 61(9). 67-73. Accessed on 21 March 2012, at http://proquest.umi.com/pqdweb?did=1018738311&sid=1&Fmt=3&clientId=74379&RQT=309&VName=PQD Sutter Health Website (2012). Accessed on 21March 2012 at http://www.sutterhealth.org/about/index.html The Medassets Website (2012). Sutter Health – Sacramento implements receivables management tools and collects $78 million in first three months. Accessed on 21 March 2012, at http://www.medassets.com/casestudies/pages/case-studies-main.aspx Read More