Bravado Does Bring About Success: The Tale of Saint Barnabas
Within the first 90 days they transitioned the business office from 254 people to 154. MedAssets absorbed the surplus 100 employees and had them join their overarching collections business. They set up a project management office and implemented a new workflow system. Then they tackled the billing system and insurance verification processes – which were disparate systems—unifying them to help standardize processes and improve the back end. They automated the smaller claims, so staff could concentrate on addressing larger claims. Then they implemented performance goals for their teams to strive for—including daily collections goals.
"We went from a traditional healthcare approach [to billing] to a performance-based culture," he says. "We changed everything about every thing."
It was a gamble that paid off, however. With MedAssets coordinating and controlling the back end collections and the health system concentrating on the front end Saint Barnabas quickly started to see a return on this investment. Just 120 days after the project got off the ground, they were already performing better. In March the health system collected $165 million—the most they have ever collected in a single month—and they did so using 100 less staff members.
"Now it's costing us substantially less to collect substantially more," Picerno noted.
Moreover, Saint Barnabas is now operating with 77.8 days cash on hand and their AR net collections are 39.56. It seems finances are looking up for the New Jersey system and even the rating agencies are taking notice—one of them has already adjusted the system's financial outlook to positive.
"Today we have a light at the end of the tunnel and all our lead indicators look good—aging is down, denial rates are down. When you become process-oriented you have very low cost but high return," Picerno says. "We really wanted to move Saint Barnabas to the next level and have an outstanding revenue cycle. Now when a patient steps into our facility [for a procedure] we're able to hand them a bill with the amount that will be due… and that improves cash collection up front."
While Saint Barnabas' decision to use one company to run their back office was a success, what I find most impressive about their tale is the sheer fearlessness that went into putting a system like this into place. Whereas many financial leaders would've stayed put, they press onward in a totally new direction. What is admirable about both Saint Barnabas the man and Saint Barnabas the facility isn't that they succeeded in accomplishing their goals, but that they believed they could achieve it and that they boldly acted to achieve those ends—all the while knowing that this could be a total failure. It's a good reminder for everyone: success is sometimes born out of bravado. Don't be afraid to take on a new direction at your own facilities.
Note: You can sign up to receive HealthLeaders Media Finance, a free weekly e-newsletter that reports on the top finance issues facing healthcare leaders.
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
- Medical Errors Third Leading Cause of Death, Senators Told
- Chronic Disease Care Costs Get Bipartisan Attention
- 4 Tectonic Shifts Shaking Up Healthcare
- As States Regulate Provider Competition, Common Threads Emerge
- Mayo Tops U.S. News Best Hospitals Rankings
- CareFirst Announces PCMH Program Results
- CVS Ramps Up Retail Clinics with Provider Affiliations
- Hospitals Seeking to Understand PPACA Impact Turn to Data
- The case for concierge medicine
- Telemedicine Providers Welcome AMA Guidelines