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!

Fiscal Heroes to the Rescue — YOU Can Make a Difference

SpendMend Team

By: Tim Berkey

We have all seen and heard countless examples of courage from front-line workers and other medical professionals during the Covid-19 pandemic.  As our nation has experienced an unprecedented (in our era) medical challenge, we have found new respect for those who sacrifice themselves so that others may live.  And even while these amazing stories of human compassion give us temporary reprieve during this difficult time, the resulting impact of Covid-19 has created a gaping financial hole that further threatens the fiscal solvency, and in some cases, the mere existence of certain healthcare organizations.

In predictable response to this challenge, healthcare leaders have spent tireless hours making difficult decisions about the best use of time and resources, as well as creating future plans for dramatic expense reduction and revenue enhancement. In rare cases, these plans and their proper execution will be enough to offset up to a 50-percent reduction inpatient revenue since the early stages of the pandemic.  However, in many cases, even the best plans and execution will still render the organization unable to recoup the entirety of previously lost revenue.  For all organizations, there has been much opportunity to lament these harsh fiscal realities, though there are still strategies to consider which may give financial relief during this challenging time.  And like the creativity and drive, we have seen from those “healthcare heroes”, these other fiscal strategies will likely require a fresh way of viewing traditional problems through a non-traditional lens.  They will require a new group of “fiscal heroes”.

If you are reading this and wonder how you can make a contribution, you can be assured that those opportunities are equally within your reach — even as they may require challenging traditional paradigms.  One such notable example includes the recovery of dollars that already belong to a healthcare organization (either in tangible or contractual form).  For example, the examination of AP transactions for “leakage” (aka, “recovery) is a strategy not foreign to most organizations. Though, it is my experience that some organizations may presume that the potential opportunity is either too difficult to uncover, too small to matter, or that, “we already do a good job finding recovery opportunities.”  It may surprise even the most seasoned financial executives to know that recoveries in excess of $500,000 – $1,000,000 are common and do not reflect “poor AP performance”.  What may need to change in this climate is the manner in which the pursuit of such opportunity is evaluated.  I would argue that the pursuit of this “last-mile” opportunity is an absolute requirement.  Related, how many instances typically avail themselves in which your organization can achieve a significant fiscal bump for something that is already contractually protected and for business already transacted?  The speed-to-value aspect of such a strategy is paramount in a post-pandemic period of cash-flow optimization.

If you are an AP Manager/Leader reading this and have not recently engaged a recovery partner (of your own accord or at the direction of your senior financial leaders), you have the opportunity to be a fiscal hero.  You can begin by engaging in a conversation about achieving last-mile recovery dollars through a vendor partner review of your AP transactions.  Perhaps even more importantly, if you are a financial executive reading this you can enhance your fiscal hero status by temporarily suspending the temptation to judge the potential of realizing a significant revenue increase, and instead, embracing any potential opportunity as a platform from which your future performance standards in this department will be based.  It is human nature to both enjoy a financial recovery and lament that a recovery was even available in the first place. A new paradigm might reflect a culture of “amnesty” for even the largest recovery opportunities so that there is literally no chance that staff are hesitant to engage in future, similar pursuits of financial improvement.  And, to be clear, my experience is that most fiscal leaders are already willing to consider that last-mile recovery dollars in an area like AP are commonly a function of the sheer volume of transactions that this important department must touch, as opposed to inferring that the identification of any material recovery dollars represents a failure of existing management or personnel.  Ninety-nine percent (or more) current transaction accuracy will still yield valuable last-mile dollars to the organization.  Are you ready to realize them?

 

About the Author

Tim Berkey is an independent strategy and delivery healthcare consultant who resides with his wife and family in Charlotte, NC.  With nearly three decades of healthcare process improvement and large-scale expense reduction experience at Premier, Inc., he helps healthcare leaders navigate pressing problems in areas such as supply chain management, general process improvement, and large-scale margin improvement.

When not partnering with healthcare organizations, Tim enjoys family time, art, music, and travel.

“Internal Audit” can better support a hospital’s financial stability during the COVID-19 pandemic.

SpendMend Team

Written By: Dan Geelhoed

The Ongoing Cost of COVID-19

The COVID-19 pandemic has driven revenues down for nearly every industry especially the healthcare industry.  In particular, the widespread decision of practically all U.S. hospitals this past spring to suspend elective surgeries and services proved to be extremely costly.

According to data gathered by the Crowe Revenue Cycle Analytics (Crowe RCA) with very few outliers, “health systems across the United States experienced an average decline in patient volume of 56%… this equates to an estimated national decline of $1.44 billion in net revenue per day for hospitals with more than 100 beds.”

 

The Role of Internal Audit

Prior to the COVID-19 outbreak, hospitals routinely suffered operational lapses and financial leakage as a typical cost of doing business.  To counter these gaps, many healthcare systems depend on their Internal Audit department to better understand the cause of errors and put measures in place to stop them. No matter how meticulous these departments have become, they alone cannot cover the full scope of the problem and are forced to make priority decisions about which process gaps to address.
With few exceptions, Internal Audit teams chose to prioritize processes related to the hospital’s core charter: delivering patient care.  For the sake of limited time and resources, auditors are often forced to leave some cost-cycle and financial leakage issues unattended or un-resolved.

 

The Current Environment

At present, amid a global pandemic, Internal Audit groups remain more focused than ever on supporting policies and procedures that are directly related to caring for patients.  Sadly, a staggering volume of revenue loss continues to go unchecked as staff sizes have been reduced, operations have suffered, fraud has increased, and compliance has lapsed.  Although many hospitals have resumed elective services throughout July and into August – enough time has already passed to cause severe revenue shortfalls.

 

Recovery Audit: Why is it Important?

Recovery Audit can serve as a vital part of an Internal Audit by discovering and returning hard dollars to the hospital’s bottom line.  At the same time, a Recovery Audit is also an effective tool to uncover compliance issues, control gaps and operational concerns in the financial department, the procure-to-pay process and the cost cycle.

In our 27 years of experience, SpendMend has observed that Internal Audit groups gain a dramatic increase in visibility when leveraging a Recovery Audit. At a time when the system has been strained and resources are particularly scarce, the additional funds and insights delivered by a Recovery Audit can potentially be the difference between a hospital’s ability to deliver crucial patient care… or not.

By championing a Recovery Audit project, the Internal Audit department is easing the burden on their own department, mitigating the impact of financial loss, helping to reinstate best practices, and most importantly doing their utmost to support patient care.

How Are Your Hospital’s Finances Just Like Halloween Candy?

SpendMend Team

Written by: Amanda Geelhoed Papach, ageelhoed@spendmend.com

As kids, my sisters and I would travel from our small quiet street to a giant neighborhood. We would head to our uncle’s house where we would meet up with cousins and friends and fuel up with pizza before the big night of trick-or-treating. All the moms would stay home to pass out candy, and the dads would take us trick-or-treating. Our army of costumed kids would sprint house to house filling up our pillowcases. When it was time to head home our little legs were tired, our sugar high (from candy we sneaked past our dads) was fading, and our pillowcases felt like dumbbells. Every year inevitably, someone would drag a full pillowcase on the ground creating a hole for candy to fall out during the walk back and it was too dark for anyone to notice the lost trail of candy. Losing a piece of bubble gum didn’t matter but losing a quarter of your collected candy was devastating.

The same is true for healthcare finances. Just like the hole in the pillowcase, there are unseen control gaps leading to financial leakage throughout every single U.S. health system. But unlike the lost candy your financial leakage can be returned with a recovery audit. Now, if the idea of a recovery audit scares you more than seeing a shadowy figure in the corner of a room then read more HERE.

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.