The California Sutter Health Approach
Sutter health organization is among the earliest and largest health providers in North California. It is a non-profit organization of community based health providers including hospitals, physician organizations and other various health care providers. They joined to provide advance and quality health care and through this initiative, many communities in North California have greatly benefited (Souza & McCarty, 2007). However, Sutter health organization has faced numerous challenges relating to revenue collection from its self-pay patients. Like many other health care organizations, the collection of debts from uninsured or underinsured patients is a major challenge (Lichtig, 2005). This essay seeks to address the key problems facing Sutter health providers, the employed solutions and the outcomes achieved. In addition, the paper will also highlight the accounting solutions adapted by Sutter health providers and any other alternative approaches and solution to the key problems.
Problem of Debt Collection
As stated earlier, many health providers are frequently faced by the debt collection challenge. These health providers struggle to meet their operational cost margins but are usually derailed by the huge annual bad debts. The article “From Bottom to Top: How One Provider Retooled its Collections” written by Souza, M. & McCarty provides adequate and reliable research data on how Sutter organization managed to maneuver the bad debts, increase its point of service collection and improve its overall revenue cycle.
In 2006, the Sutter organizations implemented a new debt collection strategy aimed at increasing the collection of revenue and enhance efficiency in the accounting systems. The process was aimed at finding an effective way of increasing the up-front collections from self-paying patients and how to integrate both up front and back end operations. To curb this problem, the Sutter organization started by empowering its patient finance services (PFS) staff (Souza & McCarty, 2007). The process ensured that each PFS staff receives comprehensive training to adapt to the new system, although the training differs from different specialties. In addition, the PFS staff gained new responsibilities on individual patient account’s and to ensure that every registration is analyzed and any problems reported before the patient leaves the hospital. A denial component system was also developed to reduce claims. The immediate registration and confirmation of patients may highlight a few problems e.g.
- Workers compensation lacks accident information
- Patient’s guarantor is under 18 years
- Patient’s marital standard is widowed but a relative is listed as a spouse of the patient.
This process ensures that the PFS staffs raise an immediate alert on any accounts that require special handling since they now have access to real time information unlike the traditional systems (Souza & McCarty, 2007).
Because of the above stated new approaches, Sutter organization recorded a great increase in revenue collection and the annual bad debt rates dropped gradually. Further research by Souza, M. & McCarty indicated that Sutter system has been recommended as effective and strategic in curbing the debt collection menace in heath organizations. Fortunately, the Sutter system is not expensive. Apart from the PFS staff training, the system is designed to support the existing staff without the need to employ additional staff or increase wages (Spetz, Mitchell & Seago, 2000).
The traditional systems were difficult to monitor the accounts departments. The new system encourages the implementations of new strategies that outline when and how to collect payments from patients. This has aided the various accounts departments to realize the need of working as a single unit rather that dividing important data across single departments. The system allows the managers and PFS staffs to:
- Monitor revenues and payments and easily identify problematic accounts.
- It allows calculation of daily revenues and with 30 days collections
- Drill down the individual patient account level
- Assess their performance and predict end of month performances
- Prioritize and automate the accounts lists
- Sort accounts under different categories e.g., new and old accounts, dollar accounts etc
Use of the MedAssets Software
Moreover, the Sutter system has adopted the use of the MedAssets software, an application that is effective in detecting major errors in the receivables that would have resulted to underpayment. According to Souza, M. & McCarty, the system is reliable and dependable. Another application that is equally impressive is MyMentor. The application is designed for patient accounts representatives and collectors, the application enables the users to keep track of their performance and compare with other team members. This result to more sense of ownership and meeting the team has set goals.
Although the Sutter system is highly recognized as a reliable means of data collection, various alternatives can be employed. The Veebilling is one of the alternative methods (Jacoby & Warren, 2006). The Veebill from the Vee technologies is an arm of services that focuses on the health care sector and has adequate experience in the sector. It provides the following services, medical billing, medical cording and medical transcription outsourcing services (Arnold, 2007). The company offers a comprehensive revenue cycle management and provides the following;
- The registration of all patients
- Cost Sharing
- Claims’ submission
- Denial management
- Medical cording
- Charge entry
- Accounts receivable
- Follow ups
The use of medical billing through Veebill services ensure that the revenues increase and the claims decrease. This is due to the correct and accurate data that are kept. The company also follows up any pending claims, outstanding receivables and ensures that claims are settled at effective costs (Wu, 2005).
In conclusion, the Sutter system has proved to be a very reliable and effective means of collection. This is because the Sutter approach is inclusive of all the parties’ i.e. the management, staff, the stakeholders and the patients who are the greatest beneficiaries of the system. Unlike other alternatives, the system provides adequate training to its staff hence ensuring provision of long term reliable services. The Sutter system also has adapted new accounting strategies that have increase the accountability levels therefore minimizing misappropriation of funds.