The Delta variant of COVID-19 that is currently spiking across the country reminds us that this pandemic is far from over. There is no way to know how long this variant will stick around or if there is another waiting in the wings. The bottom line is that the financial hardships brought about by the pandemic are likely to worsen before they get better.
For large not-for-profit health systems with multiple locations, the challenges at hand—and ahead—are many. The good news is that these systems don’t have to go it alone; most have revenue cycle vendors that can help pick up the heavy lift. Sometimes, however, that heavy lift comes at a high cost. According to Healthfuse research, 76% of hospitals are actually paying higher than the going market rates for their revenue cycle products and services.
What can large health systems do to protect themselves and ensure they’re getting the best vendors at the best rates? Edward-Elmhurst Health, a large health system serving Chicago’s western and southern suburbs, has found an answer.
As one of the largest health systems in Illinois, Edward-Elmhurst Health works with numerous revenue cycle vendors, but they weren’t sure they were getting the highest return on those relationships. The health system decided to partner with Healthfuse to help renegotiate contracts for the health system’s bolt-on technology and collection vendors. Healthfuse used its rules-based auditing tool, an application within the VMO platform, to gain insight into the health system’s existing vendors’ performance and identify opportunities for improvement, including contract renegotiation.
Edward-Elmhurst Health achieved substantial cost savings within just six months of working with Healthfuse. Even though Healthfuse came on board in the middle of the pandemic, they were able to deliver more than $8.1 million in revenue cycle performance improvements and $1.2 million in cost savings.
With Healthfuse, Edward-Elmhurst Health has achieved superior results, including:
Contract Savings of $456K. Healthfuse reviewed and scored Edward-Elmhurst Health’s revenue cycle service and technology contracts based on SLAs, freedom, flexibility, and fee structure. Contract rates were compared with those in the Healthfuse database to determine variances with market expectations.
Collections Improvements of $7.1M. Healthfuse compiled a record of the past twelve months of each vendor’s placements, gross collections, and fees. This performance was married with a process review to identify and quantify improvement values.
Invoice Recoveries of $102K. Healthfuse used a multi-step review process to identify instances of vendor over-invoicing. Where significant issues were discovered, a 12-month retro-review was conducted. Typical invoice inaccuracies in outsourced performance-based vendors range from 3.5% to 7%.
Healthfuse was able to bring invaluable expertise in working with vendors and understood the complexity of our contracts off the bat.” Gregory Arnold, System vice president, Revenue Cycle and Payor Strategy, Edward-Elmhurst Health.
The path forward
A successful journey to financial recovery requires optimally performing vendors with the most advantageous contract terms. Unfortunately, most revenue cycle leaders don’t have the market insight necessary to know whether their vendor contracts are reasonable or not. Fortunately, Healthfuse does. With insight into more than 3,000 vendors and hospitals, Healthfuse has the intelligence needed to benchmark and analyze the most effective partner contracts for each health system’s specific needs.
Read our latest eBook to learn more about Edward-Elmhurst Health and other large not-for-profit health systems and how they’ve been able to increase the value of their vendor relationships, improve self-pay collections, and reduce bad debt.