The Top Five Things I’ve Learned (so far) at the 2022 Trade Shows

SpendMend Team

By Alan Brander

We’re almost halfway through June (can you believe it?) and the SpendMend team has been busy traversing the map and meeting clients and colleagues at trade shows and industry conferences across the country.

At this point in the year our team has already attended ten separate trade shows and I estimate we’ve had hundreds of meaningful conversations with clients and other industry experts.

A few patterns are beginning to come into focus, and I wanted to spend a moment to lay out my top 5 things I’ve learned so far at the 2022 trade shows.

  • We’re ready to mingle. One thing is for sure… we’ve all been cooped up long enough and although some of us already started returning to shows in 2021 – most of us have not.  Being out on the conference floor and among peers is a welcome relief from working from home and spending countless hours on video calls.
  • The emphasis on “Cautiously.” I’d say, for the most part, the colleagues and peers I’ve been meeting with are fairly optimistic about the market and supply chains, and COVID-19 cases getting better.  Many people acknowledge that we are in the middle of a downturn, but there seems to be a sense of cautious optimism.
  • Dance cards are full. The past few shows have been like nothing I’ve seen in the past.  I am a 30-year veteran of the healthcare industry and I spent most of my career serving on the healthcare provider side.  My most recent hospital gig was as a Chief Nursing Officer where I was responsible for 2 hospitals.  Nowadays, I attend conferences as a service provider, in that new capacity I’ve gotten used to working a little harder to get the attention of VPs and C-level officers.  So far, this year has been different, I find that the hospitals are seeking us  I barely leave the booth and there is often a line of people queuing up to talk with us.
  • Cost savings, cost savings, cost savings… There are many things on the minds of hospital leaders at present. Supply Chain, Data Security, COVID-19, Nursing shortages, and more.  All that said, the most common pain point that we observed was in the area of cost savings.  Or more to the point – hospitals and healthcare systems are asking, how can I get better visibility into: What I am spending? How can I spend more intelligently? How do I avoid profit loss? How do I negotiate better terms? What cost metrics should I be tracking… and on, and on.  They used to say, “Cash is King.” Right now, I feel like “Costs are paramount!”
  • There simply isn’t enough time. As we return back to a semblance of normalcy, I see hospital leadership with much longer “to-do lists” than ever before – with the same number of hours in the day to do it all. The world has become more complicated so there has been an increase in new initiatives.  At the same time, the hospitals are still obligated to maintain their usual operations and add to that there is a daunting backlog of items that have been ignored since March of 2020.  Leaders throughout the healthcare industry are working overtime to balance all these different sets of priorities and trying to settle on… what are the real

So that’s my Top 5 list for the time being, but we still have another 7 shows on our calendar for the balance of the year.

I’ll check in again in six months to tell you how everything turns out!

COVID-19 Critical Challenges Told By Healthcare P2P Staff

SpendMend Team

Written By: Amanda Geelhoed Papach, Marketing Director at SpendMend

A few weeks ago, SpendMend created a COVID-19 Idea Exchange for Healthcare Finance, Internal Audit, Supply Chain, and Accounts Payable Departments. This Idea Exchange survey requested input about how the COVID-19 pandemic has impacted their work environment and processes. We received many thoughtful responses from healthcare professionals from over 31 major U.S. hospitals. The data gathered was eye-opening, meaningful, and thought provoking.

The pandemic has affected every facet of the healthcare industry, but the answers to one key open-ended question needed to be shared. The question “What are the critical challenges you faced throughout the COVID-19 outbreak?” I have broken the answers down into categories, and hope these responses show that we are in this together and other hospitals are experiencing the same concerns you are.

 

  1. Staffing Issues

    1. Limited Staff – “We had limited staff so the first thing we did is re-prioritize tasks within the department.  Essential tasks were prioritized highest.  We then set parameters around non-essential tasks and assigned targeted dates.  While we still have a backlog on some of the non-essential tasks – we are functioning at normal level on our essential tasks.”
    2. Furloughed Staff – “Until this past week this was not an issue for us but with the additional financial impact, we are being asked to furlough 20% of our team on a temporary basis.  We have decided rather than to completely shut down for a week or fully furlough an associate we would rotate one staff member each day which provides the same overall financial result yet provides us coverage for our internal customers and vendors.”

  2. Working Remotely

    1. Working from Home – “It took a while for us to get settled in with remote access but once we did, we are functioning at probably 75% of normal.  We froze all our automation projects and our system conversion timeline has been extended due to limited resources all around the hospital.”
    2. Staff Communication – “I would have said our staff communication was average before COVID.  I think we have improved our overall staff communication using video conferencing.   Our meetings are shorter with better participation.  Each participant adds to the agenda and we go around the Zoom room and address all the points.  We document the notes while we are on the call and it’s been a great way to stay connected.”
    3. Motivating Staff – “Working remote really makes this a challenge.  We made an effort to make it personal and gave everyone a chance to comment on what they liked and what they didn’t.  We took the positive responses and incorporated some of those recommendations into our overall process and the ones we were challenged with we discussed various ways to fix the issue.  The team was very open to discuss change and I think motivated them to openly communicate.”
    4. Remote Access – “This has been extremely challenging.  First, we could not get remote access for all the users.  Then we had connectivity issues.  After about 2 weeks of difficulty we were finally able to fully connect to our systems.”  
  3. Exception Processing – “Our non-match invoices created the biggest challenge for us.  Our workflow routes the match exceptions to procurement after AP has performed initial review.  With procurement focused on PPE we started to backlog exceptions.  Procurement and AP worked together to develop new exception limits and prioritized the larger exceptions which procurement agreed to turn within 3 days. Those transactions under the new match exception limit were paid and a variance account established.  We notified our vendors that due to COVID -19 we would be processing transactions and tracking exceptions.  When we get back to full staff, we will reconcile those vendor’s variance starting with the largest supplier balance.” 
  4. Invoice Approval – “Our invoice approval is automated for the most part, but we are finding delays in obtaining approval.  Because of this we have noticed the vendor call activity increasing and duplicate invoices being presented from suppliers.”
  5. Interacting With Suppliers – “At first we found it difficult to reach our normal vendor contacts but over time this improved.  We just tried to prioritize critical tasks and limited our outreach.”
  6. Third Party Invoice – “This was a real challenge.  We outsource certain functions that are performed offshore which was totally shut down.  We had to scramble to get resources in place to cover the gap in our process. One thing is for sure, we are looking at each of our processes to ensure there is a fall back option.”
  7. Pause Projects – “COVID paused all projects we have going on.”

We don’t know how COVID-19 will change healthcare, but we do know that as a healthcare community we must work together to support each other. As critical challenges continue to change and grow – know that you are not alone in your experiences #weareinthistogether.

An Open Thank You To A Different Kind Of Healthcare Hero

SpendMend Team

We have heard the brave stories of the doctors, nurses, spiritual advisors, and janitorial staff members standing face-to-face with COVID-19 and its direct impact and we thank them for their courage and efforts, but we also want to thank the unsung and forgotten about members of healthcare.

Thank you to the AP departments for managing the hospital payments and helping keep the vendor relations strong.

Thank you to the finance department for rearranging budgets, managing cash flow and navigating through new complex regulations.

Thank you, Supply Chain, Materials Management, and Procurement for working every avenue to find PPE supplies as well as supplying the hospitals with the normal everyday supplies.

Thank you to the GPO reps for connecting hospitals with suppliers while helping balance required supplies throughout the members.

Many Americans may not know that what you do but we recognize you and appreciate all of your efforts at this time.

We are here to support you and thank you for supporting patient care,

SpendMend

To read more about how SpendMend is addressing COVID-19 click here

The Positive Influence of Supply Chain into the Recovery Audit Process

SpendMend Team

Written By: Nash Shook, nshook@spendmend.com

Tucked away in woodsy, western North Carolina, I grew up in a progressive but small-town healthcare household.  My mother was a CRNA in our local hospital. My dad was the Supply Chain Director at the hospital in the next town over. I spent the summer of my Freshman year in high school working as a clerk for my Dad shuttling supplies and putting away inventory. Little did I know then that I would stay the course and pursue a career through various supply chain leadership roles.

When I was in college, to pass time while doing laundry, my roommate, Greg and I took up juggling tennis balls against a black painted wall in the basement of our dorm. Looking back, juggling is considered a perquisite skill I have always tethered to supply chain leaders. There are too many important duties to balance, each requiring intermittent attention to advance the progress and yet, always needing some level of management involvement.

The supply chain leaders I interact with represent the most strategic clients to our firm and come from large health systems. Central to their success is their ability to balance the day to day challenges as well as giving vision to how they lead areas of logistics, procurement, finance, operations, patient care and other support departments.  here are large annual saving targets, attending to critical product shortages, creating sourcing and delivery efficiencies in high-cost, high demand departments, developing staff for growth and staying ahead of expansion needs.  But what is their influence and interest in the exhaust of a recovery audit?

Recovery audits are normally directed toward and lead by the Accounts Payable leadership, and rightfully so due to the extensive review of systems internal and external around the P2P process. For supply chain leaders, recovery audits are not in their top 10 lists, but their involvement has demonstrated they can have a positive impact to their organization.

There are tremendous downstream efficiencies for supply chain, especially since supply chain provides coordination of the P2P across all departments. In most every engagement, we find that compliance (really, a lack thereof) to utilizing the return to vendor module will generate at least a third of the recoveries we find. Many times, that compliance is harder to correct without supply chain’s involvement. Recovery audits for accounts payable as you can imagine has a different exhaust. Why is that different?

I believe it’s twofold. The audit firm’s deliverable has historically been more geared to address AP-oriented issues: preventing duplicate payments, efficiencies around invoice processing, gaps in processes and aligning systems so records are reconciled properly.  There’s so much AP-speak going on, the insights that are of value to supply chain get lost in translation.

It’s also because Supply Chain needs are around building progressive value around cost reduction and process efficiencies, so their focus can be at times more to the business imperatives of the health system: keeping up with growth demands, pursuing large savings goals, developing a clinical value analysis approach to product management, etc.

For supply chain, recovery audits dig deep within products returned and whether or not the credit is properly documented. As mentioned earlier, returns not deducted is one of the top three findings within recovery audits, many times the highest.

Several supply chain executives have indicated to me that product returns are policy driven regardless of which department is issuing the return, so no sole department bears oversight.  However, supply chain leaders want to ensure they support and encourage ways to increase adoption and compliance to the process.

Recovery audits provide a layer or root cause to highlights this lack of adoption:

  • Which hospitals in your system are not utilizing the ERP to chart returns?
  • What departments have the lowest level of compliance?
  • Are vendors being asked to manage returns?
  • What does non-compliance to system-based returns costs the health system?

There’s another diamond in the rough benefit I’ve not mentioned and that’s the contribution that recovery audits provide in operational improvements.

It was referenced earlier that much attention is given to the recovery dollars captured and returned. It is a critical reason behind conducting an audit but unto itself, it’s a starting and stopping point. It’s finite, it stands alone and is merely transactional.

Shouldn’t the real value to the health system be understanding the drivers behind the financial leakage to begin with?

We say all the time that every health system has leakage, but to what degree and to what benefit is having a financial operating system if regular maintenance isn’t performed and if diagnostic measures that detect problems aren’t corrected? Recovery audits that provide detailed root cause analysis can enable leaders across the financial and supply chain areas to know what needs to be done to prevent costly process gaps from growing beyond acceptable levels.

The More Things Change, The More Things Stay The Same

SpendMend Team

Written By: Nicole Thompson, Director of Business Development, nthompson@spendmend.com

When I started in the recovery audit industry as an intern at an industry leader, I was shuttling disks and drives to the data processor’s office and picking up bankers boxes of printed client reports. Pulling invoices meant rolled up sleeves and long lists of invoices, a few days at Iron Mountain and hours on end at the copy machine. As I began calling vendors to follow up on questions about statements, I had to look up contact information on a CD-Rom or call 411. Duplicates were the result of faxed invoices, returns, etc.  After interning I was hired on as an Account Executive. My next role challenged me to build a business development team. From there, I built yet another team and led the implementation of not one, but two CRMs. Now, I’m privileged to be working with simply the best team in the Healthcare Recovery Audit Industry.

CHANGE

Companies were changing. They were moving from legacy homegrown systems and paper invoices to first generation ERP systems like JDEdwards and imaging systems that promised freedom from file cabinets.

Organizations with people entering invoices at locations across the nation and around the world created regional or global AP shared service centers, gravitating toward the goals of cost savings, best practices and oversight.

There goes the recovery audit industry. Not so fast.

Inaccurate information on any of the many touch points of the procure-to-pay cycle, typos, returns, credits not forwarded to AP, new staff training and turnover were just some of the causes of overpayments found by post-payment auditors.

COMPLEXITY

As organizations became more complex, so did ERP systems and their resulting implementations. A once simple 6 month implementation was now a 5-year global rollout with all other projects on hold. With all hands on deck, day-to-day tasks like researching invoices that didn’t match the PO often didn’t get staffs’ full time and attention. Returns? Fugaddaboudit.

Offshoring and outsourcing were the buzzwords of the time, again, keeping everyone busy with change management, training, and conversion. These shared services centers promised to audit their own work.

What could possibly go wrong?

These system changes meant invoices paid in multiple systems, new and inexperienced staff, inadequate training and controls meant the promise of 100% accuracy went out the window.

COMPLIANCE

SOX, data privacy and an ever-growing list of government regulations meant even more issues managing and complying with multiple reporting and governance requirements, all while maintaining or even reducing headcount.

Digital information coming into and leaving organizations reduced paper and manual processes, but “information at your fingertips” was falling far short of the promises made when data in distinct systems had no way of talking to each other. Creating order out of chaos became a pipe dream.

20+ years later, a few (ahem) gray hairs, teams built and countless clients later (no correlation), procure-to-pay, supply chain, sourcing – we all look very different on the outside – but on the inside, change, complexity and compliance are the only constants. Supply chain, purchasing and accounts payable professionals manage all of this with ease. It’s their normal.

As Mary Poppins said so well, more than 99% of what they do is “practically perfect in every way.” But when you’re dealing with millions and billions in spend, that small percentage of errors can really add up. For public companies, those dollars can go back to the bottom line. For privately held organizations, you can reinvest into growth. For healthcare organizations, that means funding even better patient care.

Am I glad the days of pulling invoices at Iron Mountain are over? YES!

But the days of helping companies recover overpayments continue. As long as change, complexity and compliance are part of business, recovery auditing will be as well.

ILLUMINATION

So where do I see recovery auditing progressing?  The devil is in the details, and you have to dig into the details to find the real root cause of every single overpayment.

What happened? Why? How do you fix it?

Only by shining a light on your dark data can you achieve true visibility and uncover the answers to these questions.  And only by implementing the recommendations offered by the experts performing your audit, can you optimize your processes, controls and ultimately your department. You’ll be able to actually prevent those errors from happening in the future.

Change, complexity and compliance ensure that this illumination loop is infinite. We’ll be learning and growing and improving together for years to come.