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 in patient 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 heroes 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.