How is SpendMend Just Like the Easter Bunny?

SpendMend Team

Written By: Tom Flynn, VP of Marketing

On Easter mornings when I was young, my parents used to hide plastic eggs all around the house with little surprises in them. Some eggs had chocolate candy inside. (I liked those) Some eggs had dental floss in them. (I didn’t like those eggs very much) And some eggs contained money (I liked those eggs most of all)

I am the youngest of all my siblings and there was one Easter Sunday when I was the only one left taking part in the egg hunt. At that stage, my older siblings preferred to help my parents prepare and hide the eggs.

And boy, did they get into it.  They were going to make me work for it. They hid more eggs in more difficult locations, but keep in mind, that also meant more candy and more money… and it was all mine.  I simply had to find it.

I had to work for it.

I was now one person in search of a couple dozen eggs spread across an entire house. I remember that year, I had searched for almost ten minutes and discovered only one egg.   I was annoyed and dejected.  I knew the hidden treasures were out there somewhere, but I was having a hard time finding them.

So, what should I have done?

1.    Look in a few obvious hiding spots, find a small number of eggs and call it “quits”
2.    Get creative, spend more time looking and diligently go through the entire house to locate all the eggs

Of course, I went with choice number 2. I stuck with it and I got ‘em all! I got all the chocolate and all the coins and crumpled bills tucked into every single plastic egg.  The same philosophy can be applied to SpendMend’s approach to Profit Recovery Auditing.  We select choice number 2, as well…

After 28 years in business, SpendMend currently serves more than 100 healthcare system clients spanning over 2700 hospitals, clinics, locations, etc., across the U.S.  In a given quarter, we receive several terabytes of client spend data comprising billions of dollars in transactions while at the same time, we also support over 60,000 vendor interactions and touchpoints. Our unique ability to access and review Dark Data throughout the Health System Cost Cycle enables us to review more data than any other competitive firm and because of this we have blown away the industry benchmark for recovery percentages.

If I was explaining this to my childhood self, I would say, “We search the entire house and we find ALL the eggs that are hidden and a couple more beyond that, too.” Our industry-leading recovery averages come in at about .125%.   In other words, we deliver our clients $1.25 million in bottom-line recoveries per every $1 billion of their annual spend.

Now that kind of money will buy a lot of chocolate candy… and dental floss, too.

Happy Easter Everybody!

How is SpendMend just like St. Patrick’s Day?

SpendMend Team

by Michael Koory, SpendMend, VP Sales – Mid-America

Today marks St. Patty’s Day (a.k.a. the Feast of Saint Patrick) which is a cultural and religious holiday celebrated every year on 17th of March in Ireland and by Irish communities around the world.

Over the centuries, the mythology surrounding the life of Saint Patrick has become ever more ingrained in the Irish culture.  Patrick, the patron saint of Ireland, is credited with expelling all the snakes from Ireland when he was only 28 years old, and today, not a single snake can be found in Ireland.

O’Floinn’s Almanac of Irish Legends and Fables, recounts a poem from 5th Century AD:

  • Saint Pádraig (St Patrick) was set upon and bitten by serpents while deep in forty-day prayer atop a hill.
  • Saint Pádraig rose up from his dream state and recited an ancient incantation and stunned the offending creatures.  
  • Saint Pádraig traveled the country, charming serpents from their darkest hiding places, and brought them into the light of day.    
  • Saint Pádraig cast a great light upon the writhing mass.  The Great Saint drove Serpents into the sea.
  • Saint Pádraig gave Ireland the secret to his light so they would never again be threatened by the scourge of serpent beasts. 

Some of the old Irish translation is hard to understand so I’ll summarize:

Patrick was suffering and under attack and he solved his problem by leveraging his 28 years of education and study.  He shined a great light into the darkest holes throughout Ireland, and he rid the landscape of all the unwanted snakes and serpents.  He then armed the leaders of Ireland with the necessary information to defend themselves and ensure they would not be overrun by Serpents ever again!

At SpendMend we approach Recovery Auditing in exactly the same way!  Observe:

Our clients are suffering from Financial Leakage and we solve their problem by leveraging our 28 years of industry knowledge.  We shine a great light on the DARK DATA hiding in our client’s systems and databases and we help to rid our clients of all their unwanted profit loss.  We then arm the leadership of our clients with all the necessary information to defend themselves and ensure they will not be overrun by financial leakage again!

The parallels are amazing.

For more information on O’Floinn’s Almanac of Irish Legends and Fables, please mark your calendar for 15 days from now.

Happy St Patrick’s Day everyone!

Erin go bragh!

COVID-19 Relief Credits May Be Disappearing Without Your Knowledge

SpendMend Team

Written by: Rob Heminger, President

SpendMend partners with more than 100 healthcare systems spanning over 2700 hospitals across the U.S.  In a given quarter, we receive several terabytes of client spend data comprising billions of dollars in transactions while at the same time we are also supporting over 60,000 vendor interactions and touchpoints.

By normalizing, organizing, and analyzing these massive sets of information, we are able to provide our clients an enriched viewpoint specifically related to their position in the healthcare industry.  Much of the value we deliver is uncovered from “data pockets” or “themes” that are not easily visible from a client’s perspective.  We take pride in shining a light on this “Dark Data.”

In recent months we’ve started to see a new trend arise within the data we are reviewing.  A growing subset of vendors are working as best they can with health system procurement departments to make available a wave of COVID-related credits, helping to offset some of the economic pressures being experienced in the market.  The credits can be material in nature and the growing trend speaks to the sound partnership established with each health system and its vendors.

The cause of these credits varies widely from the reversal of pre-payments based on under-utilizations, to the re-instatement of suppressed rebates/discounts, to the discovery of hastily-made COVID-related duplicate/overpayments and much, much more.  In our observations, there is not one single, predictable process in place to report the diverse set of COVID-related credits.  The process is proving inconsistent (and, at times, rushed) across vendors and as such, much of the detail associated with these transactions remains “dark” to our clients. Through our reviews, we have observed that our clients are not always receiving the notification of these credits (into the appropriate departments) and as a result they are frequently not receiving the economic benefit.

The dollar volumes associated with these COVID-19 credits can be significant.  In our communication with just one single vendor, we identified over $90 million of credits (all aged over 90 days) which had not yet been realized by the appropriate health systems.  In only a few months of monitoring vendor communications across our client base, we estimate that there are, conservatively, hundreds of millions of dollars going unaccounted for between vendors and health systems related to COVID-19.

Outwardly this is a good development for health systems.  There seems to be a large correction of credits coming back from vendors related to the COVID-19 challenges.  But, due to a lack of communication and standardization (and resources) across the vendor population we are observing that too many health systems are simply not receiving the benefit of these credits and they are either continuing to age on the vendors’ books or they are being used unilaterally by the vendor against open invoices of their choosing.  Unfortunately, these invoices may be disputed or the offsetting credit may go unseen until the health system dutifully pays their invoice anyway, thus creating a new credit which is as invisible to the health system as the original COVID-19 Relief credit.

In the month of November, through our investigations and in coordination with vendors, we were able to return over $2 million in unrealized COVID-19 credits – with significantly more returns still under review.  Though we have observed that many of these credits exist only in the vendors’ records and are difficult to uncover, we have worked to bring our clients data together with the appropriate vendor to resolve these issues.  The vendors are cooperating and are committed to helping the health systems through this crisis.  However,  the return of these credits remains a difficult task being administered by a group of professionals that are already short staffed and working overtime to keep up with the day to day challenges of payment application.  And let’s face it – like many of us, vendors were simply not ready for a project of this magnitude.  How could they have been?

For more details on COVID-19 Relief Credits and for help ensuring you are aware of any monies your health system may be owed, please reach out to a SpendMend representative and we can help you to understand which of your vendors are likely candidates for these credits; how much is potentially available; and what steps you need to take to realize the credits.

4 Innovative Ways to Contain Healthcare Financial Leakage

SpendMend Team

Written By: Michael Koory, RVP of Sales

4 Innovative Ways to Contain Healthcare Financial Leakage 

The financial risk to health systems has never been higher. Decades of reimbursement reductions coupled with operating cost increases have left health systems executives no choice other than innovation. The traditional methods are no longer enough.

For something to be transformational, it must change to grow or metamorphize. And, change can be difficult even when moving from bad to good. We have all seen our New Year’s Resolutions fly out the window in March or even the end of January. So, what works? How can we bring the change so desperately needed to the health systems?

A Guide with a Map - If you have ever been lost in the woods or lost in a new city, you immediately understand the value of a guide and a map. If you rely (as I do) on your GPS to help navigate the way, it is easy to understand the value of a guide with a map. We all need someone who has trekked the path before to help us achieve our goals. A guide is especially essential in healthcare. Our industry is, in some of the most change persistent times in history. The layers of change heaped upon the healthcare providers are unprecedented.

Add Visibility - No one sets out to build a system with leaks. The course of stopping financial leakage is not about finding who failed or who didn’t do something. All procurement systems have oversight and usually excellent system controls. Healthy system purchasing operations are complex and contain millions of moving entities, because of the constant pace of change, compliance variable, and multiple human handoffs, control gaps exist. They exist, but they are hard to see because of dark data.

Illuminate Dark Data  – SpendMend views dark data as the practices, information, and system data hidden from the standard operative view. It exists due to disparate systems, numerous handoffs, multiple entities, vendor practices, not shared industry information, and practices. These cover the control gaps or cause the control gaps that lead to financial leakage.

Limit Financial Leakage  – Beyond the hard dollar financial costs, there are high soft dollar costs in the financial leakage. How much time does your staff spend chasing issues outside of their job description? How many corporate initiatives get inadvertently sabotaged because the team is distracted, chasing problems down outside of their department? Are you experiencing excess turnover? Are goals being missed? All of these are caused in part or entirely from financial leakage the strain of closing down the gaps.

The Path to Prevention  – There is hope, and the path is one I know exceptionally well from guiding clients down it in the past. My experience helping health executives by using a recovery audit has proven that a guided audit identifies more initial savings and more control gaps to close for future savings. Using a guided audit like SpendMend’s Mending audit can identify up to $1.25M for every $1 Billion in spend (click here to learn more from our webinar). You can innovate and contain loss in your health system.

Why Finance Departments in the Healthcare Space Need to Start Talking About the “Dark Data” in Their Cost Cycle

SpendMend Team

By: Dan Geelhoed, CEO, dgeelhoed@spendmend.com

Before we can have this conversation, we first need to outline what we mean by “Dark Data.” In the simplest terms, “Dark Data” can be defined as the information embedded in the cost cycle that is not easily visible, sometimes not accessible, and rarely timely.

The main causes for this lack of visibility are that this critical cost cycle data is being kept in disparate systems; there is a lack of integration between systems; there is limited reporting across systems; there is significant delay between transactions and information; and there is overwhelming complexity in the healthcare industry overall.  The list goes on and on – we are just scratching the surface as to why this is such a persistent problem.

Over time, much of the system data, which you may assume you have access to, will severely decay and, in many cases, it will become nearly impossible to get to.  This lack of quality and visibility is extremely costly.

Let’s inspect the impact that dark data has had on just one industry – Recovery Auditing.  For years, a traditional recovery audit would return an average of between $400K-900K per every $1B in annual spend.  These estimates are observable through countless samples of traditional audit results.  By contrast, a deeper end-to-end review of light and dark cost cycle data can deliver up to $4M per every $1B in annual spend.  These are quantified results from dozens of huge hospital systems over the past several years. Just think about the impact of these dollars to a hospital’s bottom line.

Getting to the “Dark Data” is difficult, but consider how much of a demonstrable impact it has in this one example.  In the example above, we are talking about the difference of $900K in value versus $4M in value. (per $1B in annual spend) This is of massive and material importance.

Despite the steep benefit to reviewing “Dark Data,” few firms and companies can source the elusive datasets and the massive available value frequently goes undiscovered and unrealized.  That said, a change will soon be coming to the marketplace as anecdotal evidence of the value becomes available and as financial executives are becoming more knowledgeable and more curious about the impact of better data on their operations.

In a recent poll by Health Care Financial News to uncover the top priorities of CFO’s throughout the healthcare space it was revealed that over half of CFO’s and Executives acknowledge that their organizations “lack access to clean, consistent, and trusted data.”  In addition, 90 percent of CFO’s think their hospitals “should be doing more to leverage Financial and operational data to inform strategic decisions.”

The point I would like to leave people with is that the pursuit of uncovering or exposing the “Dark Data” within the cost cycle is a more complete approach to providing visibility to the full berth of financial leakage throughout the cost cycle.  An inspection of “Dark Data” requires a paradigm shift where financial professionals are looking to the review the data that they do not have access to, rather than the records that they are accustomed to reviewing.  In one sense this requires a leap of faith that this “Dark Data” is source-able and when finally sourced will unlock massive savings and efficiency potential.

For any questions about how “Dark Data” may be causing financial leakage in your healthcare organization please click here