As healthcare professionals strive to focus on their core competencies and become more efficient and cost-effective, they turn to outsourcing as a solution. Buenaventura Medical Group (BMG), a 50-doctor, multi-specialty group with five locations and 100,000 patients, made that decision five years ago. In efforts to stay ahead of their competition, they realized that printing and mailing their patient statements was sorely in need of process improvement.
Before outsourcing, they pulled information from the computer, printed around 20,000 statements on expensive forms and custom preprinted envelopes, and then used several staff members to fold, stuff and mail the statements. They did it four times a month. Besides the expensive, labor-intensive and time-consuming project, Marcia Reubin, Manager of Information Systems for BMG, recalls that the statements were “functional but hideous.”
She researched other options and then determined that the best solution was to outsource the process to Document Strategies. The supplier showed BMG how to lower its costs and increase its cash flow while improving customer service satisfaction levels. She also liked the fact that the supplier is “not a huge organization so I felt I could get customized care and attention to what I needed and that they would be willing to respond to changes as they come up and not put me in some queue and say they will get to it.”
The Cure
Reubin says the supplier’s programmers worked very closely with her to design and format the new statements exactly as needed. The two companies had a rocky start for the first 90 days because the medical group upgraded its internal software, which affected the database being outsourced to Document Strategies. Things went from great to worse, and then back to great again, as both sides adjusted to challenges and learned to work together.
BMG’s software system creates a statement file that determines which patients have an open balance and have not received a statement in the last 30 days. The required database is then downloaded to Document Strategies, which then prints the patient statements on high-speed digital image machines. Before mailing, the supplier presorts and bar-codes envelopes to ensure the highest allowable discount on postage. The company also generates an error report for BMG so that it can update its system regarding incomplete or bad addresses. “This cuts down on returned mail,” says Reubin, “and that’s quite valuable.”
“I don’t have to worry about staffing issues to print and fold and mail statements anymore,” says Reubin. “Even more important, I don’t have to worry whether they were mailed on time.” Document Strategies’ performance promise is that the statements will be mailed within 24-48 hours of receipt. Reubin says she receives a report the same day that each weekly mailing goes out, but the system also sends statements to dummy accounts at the BMG office so that she knows they were, indeed mailed in a timely fashion.
She says BMG has made slight modifications to the statements over the years, and the supplier has always been flexible and responsive toward changes. She is also pleased that the supplier’s President follows up with her periodically to see how things are going.
The two companies conduct a periodic review of their relationship. With CFOs, CIOs and CEOs in attendance, the open forum discusses challenges, successes, cost savings and suggestions for future enhancements.
Extended Care
Document Strategies, in the business of providing solutions to its customers, has brought added value to the agreement for BMG. A suggestion currently in the works is the supplier accessing a database to research patients who have not paid bills and for whom BMG has no current address. “They can find them from a Social Security number, last name and birthdate,” she explains. “If they locate those patients, that might enable us to not send some accounts to collection agencies.” Additionally, Document Strategies suggested they enhance the statements by adding credit card capability. That has been a successful measure that has added to BMG’s ability to collect from its patients.
The biggest surprise came as a result of reviewing the pricing structure in 1999. “They actually reduced our price, which was quite wonderful,” exclaims Reubin. “That certainly added value!”
BMG now plans to use the supplier for special mailings on an as-needed basis, to announce new locations and other information important to patients. Using the medical group’s statements database together with the printing expertise of the supplier, “just makes good sense,” Reubin says. Outsourcing to Document Strategies has enabled the group to focus on what it does best, but it also laid a foundation for significant improvements. “We are very pleased with our relationship,” she says. “This company has the flexibility to provide more services than what we originally bargained for.”
Lessons from the Outsourcing Primer:
- Processing of patient statements is a labor-intensive, time-consuming process that is ideal for benefits provided by leveraging economies of scale in outsourcing.
- In an outsourcing relationship, past successes lay the groundwork for future accomplishments and objectives.
- The expertise and high-quality processes of an outsourcing supplier can enable the buyer to decrease the number of patient accounts that are sent to collection agencies.