In 2018, several owners of AboutHealth (Appleton, WI) engaged in a joint effort to identify and recover invoice payment errors, and to identify process improvements to eliminate future errors. Agreeing on a single recovery/audit service vendor for all their audit recovery efforts resulted in lower engagement fees than each owner would have paid individually for the same service.
That’s how a regional purchasing coalition is supposed to work.
AboutHealth was formed in 2014 to evaluate ways to save money on employee insurance costs, explains Erin Schipper, director, shared savings implementation. Its six health systems represent more than 40 hospitals and 350 clinics, spread primarily throughout Wisconsin as well as parts of neighboring states.
Clinical care considerations
In addition to exploring opportunities in purchased services, owners meet regularly to arrive at best practices for clinical care and healthcare operations. They call these quarterly gatherings “collaboratives,” and they typically span one to two days.
In the most recent collaborative, clinicians focused on how to reduce the incidence, morbidity, mortality and resource use associated with sepsis and septic shock, says Schipper. Their goal was identifying, implementing and measuring evidence-based processes to aid in the prevention, early detection and treatment of these diagnoses. The next collaborative will be geared toward IT, specifically to discuss implementation of Office 365 by Microsoft among AboutHealth owners.
“As an overall implementation plan is identified, each owner develops an implementation plan based upon its internal capacity and capabilities,” explains Schipper. “Progress is shared and discussed as subsequent meetings are held following collaboratives. This is when movement, successes or struggles are shared. Data is used to measure the impact on patient care.”
- Diabetes. Since the spring of 2015, teams from each owner system have met regularly to share best practices and hold each other accountable for care of patients with diabetes. “As a result, over 53,000 people with diabetes under our care are now optimally controlled” based on most recent blood sugar and blood pressure results, smoking cessation, taking aspirin for diabetes patients with Ischemic Vascular Disease (IVD) unless contraindicated, and use of cholesterol medication for patients ages 40 through 75 or patients with IVD of any age, says Schipper. This improvement has not only prevented heart attacks and strokes, but has also avoided over $38 million of medical costs.
- Back surgery. Four out of five Americans suffer from low back pain at some point in their lives, and about 500,000 people have back surgery every year, says Schipper. “Our owners have been working since Fall 2016 to improve outcomes for these patients. Collectively, we have reduced complications following back surgery by 67 percent.”
- Heart disease. By focusing on rapid intervention for heart attacks, strategies to shorten post-surgical ICU stays, and increased usage of cardiac rehabilitation, AboutHealth owners have reduced the death rate following heart surgery by 59%.
- Total knee replacement. Since bringing together 70 orthopedic surgeons, nurses, physical therapists, quality and operational experts to discuss best practices, AboutHealth’s six owner systems have reduced post-operative complications by 49% and length of hospital stay by 39%.
It is up to AboutHealth owners to identify shared-services initiatives they wish to explore, says Schipper. “We develop an annual plan based on these ideas and collect high-level data, including current spend, variability amongst the owners with regard to cost, vendors, or processes. Then we establish a team for each initiative based on expertise required.”
In the project on invoice payment errors, the AboutHealth team contracted with an analysis/audit vendor, who then interviewed staff and reviewed procedures in each owner’s purchasing and accounts payable departments. The vendor reviewed paid invoices as well as procurement and accounts payable data files, validating purchases and other related documentation for accuracy in:
- Contract compliance
- Discount terms
- Sales tax
- Erroneous/duplicate payments to vendors
The auditors reviewed all invoices for every vendor within the time period each owner system requested, continues Schipper. This review identified prompt payment discounts offered by vendors not taken, duplicate payments made for the same invoice, and taxes or freight charged and paid that should have been exempt. Owners reviewed potential payment error details to confirm their validity, then authorized the auditors to proceed with collection from vendors. Vendors were contacted to remit a check or credit memo for the payment error.
“At the conclusion of the audit, a summary of results and a formal audit report were provided,” she says. “The final report outlined areas for improvement as well as specific recommendations to prevent these issues from occurring in the future. This audit recovered a total of $615,996 within the four participating owner organizations.”
HealthCare Connect Fund
Working together, AboutHealth owners addressed a problem that often affects small and rural hospitals – gaining access to an affordable, high-quality network. “Securing access at the bandwidth required to support electronic health records is not always available or affordable,” says Schipper.
So AboutHealth created the HealthCare Connect Fund (HCF), which provides support for high-capacity broadband connectivity. Eligible healthcare providers receive a discount from the fund on all eligible telecommunication expenses. The initiative generated almost $2.8 million in savings for owners in 2018, and resulted in upgrades to more advanced solutions and the installation of new and improved technology.
“To be truly transformational, we need to not only share insights, but develop new practices together that change the way healthcare is delivered,” says Schipper. “We need to analyze data in a way that allows us to predict trends, not just react to them. We need to continue to find solutions to bend the cost curve.”
“We have laid a successful foundation, and our early successes make us optimistic about what we can achieve moving forward.”
- Aspirus (Wausau, WI)
- Advocate Aurora Health (Downers Grove, IL, and Milwaukee, WI)
- Bellin Health Partners (Green Bay, WI)
- Gundersen Health System (La Crosse, WI)
- ProHealth Care (Waukesha County, WI)
- ThedaCare (Appleton, WI)