Case Studies, White Papers, Testimonials & Presentations

Major Hospital System- Digitize A/P Processing in the Cloud

Nov 15, 2011 8:50:03 AM

Background

A four hospital system in the NY Metro area offers a fully integrated health services network throughout the New York City metropolitan region.

With a combined annual operating budget of $2.1 billion, the hospital system deliver inpatient care through nearly 3,100 certified beds in seven major facilities in Manhattan and Brooklyn, as well as outpatient care in private practice settings and ambulatory centers. This makes available an extraordinary array of resources for providing compassionate, state-of-the-art healthcare.

The hospital system actively seeks new and better ways to streamline administration functions and to reapply so-called "slack" resources. The hospital system teamed with IPS to implement a completely hands-off, paperless process for handling all accounts payable invoices coming into the hospital ERP system using a secure portal and cloud technology.

Challenge

Fast Facts

  • 100% page-for-page scan QC
  • 200,000 invoices annually
  • 20% EDI or Electronic Upload
  • 60% PO match
  • 99.995% accuracy or greater
  • 24 hour turnaround
  • Reduce invoice processing costs to from $5.00 to $1.53 per invoice

Much attention has been paid to the digitization of electronic medical records (EMR), but hospitals also have a tremendous potential ahead of them when looking at back office inefficiencies—in particular, accounts payable (AP).

Hospitals are notoriously late payers. This is not by design, but is a result of being constantly mired in AP paperwork with too few human resources to manage the load effectively. This persistent situation can have devastating downstream effects on both healthcare practitioners and their patients should delivery of critical supplies and services be cut off or slowed down by vendors. In a very real sense, lightening the AP workload literally has become a life or death situation.

Many hospital systems mistakenly believed that the advent of email invoices with attached documents would provide increased efficiency. In reality, it only compounded the problem. Arriving invoices are easily lost in an overloaded inbox. Additionally, the actionable data is still "locked" in email, PDF, Word and Excel files. Electronic information in such files is not automatically integrated into existing business applications. Therefore, it is common for the email or attachment to be printed on paper and routed, or cut-and-pasted one field at a time, or retyped in its entirety—a situation that is time-intensive, costly and prone to data entry errors and inconsistencies.

Solution

This hospital system dared to imagine the unimaginable. In the hospital's ideal world, paper and email invoices would never be touched by AP personnel—but instead would be automatically routed, available online and posted to their ORACLE accounts payable system within 24 hours of receipt. Together with Derive Technologies and IPS, They embarked on a leading-edge solution to overhaul the entire AP system with a modern, digital solution—and to transform the growing burden of stored paper and discrete electronic files into a completely digital archive, without installing a line of code.

The solution successfully utilizes 4 Cloud services from IPS Services:

  1. IPS Digital Mailroom
  2. IPS Intelligent Capture
  3. IPS Digital Workflow
  4. IPS ImageServ Repository

IPS Digital Mailroom

An increasing number of organizations have recognized the efficiencies gained by transferring mailroom tasks to a dedicated provider, including envelope opening, sorting, validation, scanning, data capture and routing. IPS Digital Mailroom provides a streamlined, auditable mail process that eliminates lost or unaccounted for documents.

IPS Intelligent Capture

Today, invoices are received via post office box, fax or electronically directly at IPS Meadowlands processing facility in Secaucus, NJ. Each paper item is logged, opened, scanned and uploaded to a secure private cloud for processing. Electronic documents are logged and entered into the queue. Every document is trackable throughout the process and becomes available to AP staff within 24 hours.

Once invoices are captured in the system, the actionable data (customer name, account, invoice number, amount, and so on) is automatically extracted using IPS intelligent Capture, replacing time-consuming, error-prone manual data entry. IPS's proprietary data validation and verification system ensures near-perfect 99.995% data accuracy by applying business rules, database look-ups, simple logical checks on a field for proper format, all combined with expert human oversight.

Images can be prepared with any level of coding or data capture required ranging from creation of simple file names, to indexing via sophisticated multi-field taxonomies, to capture of line-item data (for invoices), to intelligent capture via OCR, OMR, ICR and bar code.

IPS Digital Workflow

Once the necessary data is extracted, the IPS Digital Workflow kicks in. Hospital-specific business rules route invoices to knowledge workers for approval, ensuring that payments are made properly. Invoices over a certain dollar amount are automatically routed for additional approvals. Invoices are "followed"—for example, if an invoice sits in the workflow queue beyond a prescribed number of days, it is automatically escalated for expediting. Invoices are posted directly into the system, improving efficiencies and minimizing human intervention.

IPS ImageServ

Rather than storing paper invoices, an electronic copy is archived within the IPS ImageServ image repository, a secure, private cloud, where they are always available for cross reference, retrieval or historical purposes at the click of a mouse by any authorized hospital user. IPS ImageServ reduces overhead (personnel, training, software maintenance, computer hardware, infrastructure), operating costs and total cost of ownership, while streamlining the process, improving efficiencies and reducing hard costs associated with storage, copying and mail services.

Results

All invoices in any form—paper, email, electronic files (PDF, Word, Excel)—are processed the same day they are received and then translated into a record that is automatically uploaded into the ERP system and Oracle DB. This happens automatically—without anyone at the hospital touching a piece of paper, opening an envelope or reading an email. All original invoices are digitally archived and available for retrieval with the click of a mouse. This predictable, auditable, secure process provides end-to-end chain of custody document tracking.

Using a "Software as a Service" model through cloud technology—rather than implementing a software solution in-house—combined with scanners and all necessary computing power, they now spends a mere $20,000 per month for operations. Invoice processing was reduced to $1.53 versus $5 in the manual operation. In addition, the hospital system experienced an unheard of 80 percent adoption in the first week, up to 95 percent adoption in the first 90 days and they are able to continue to drive inefficiency out of the process using common Six Sigma techniques.