Client – Academic medical center
Our Role – The Virtual Business Office work efforts helped our client generate $100 million in cash within six months.
Industry – Health Services
Services – Fit for Growth, Finance Transformation, Data and analytics
Solution - Virtual Business Office
Where do you go when you’re acutely ill and you have no income or insurance? Fortunately, there are institutions like our client, an academic medical center whose mission is “to provide excellent and accessible health services to all in need of care regardless of status or ability to pay—exceptional care without exception.” The medical center is a premier non-profit academic medical center and a very high percentage of their reimbursement comes from Medicaid. A year ago, the hospital underwent a challenging electronic health record (EHR) implementation that had created instability in the revenue cycle. The newly-appointed VP of revenue cycle realized that he had a serious cash challenge on his hands and was not sufficiently staffed to turn things around. He also suspected that there were underlying issues within the revenue cycle itself that would need to be addressed. But first, he needed to fix the cash problem.
PwC began work with the medical center in February of 2019 with an initial placement of accounts receivable (A/R). We immediately brought in our Virtual Business Office team, a group specifically set up to help clients remediate third-party, aged A/R at scale and realize more efficiency from their workforce. Within the first week, the Virtual Business Office performed a detailed analysis of the client’s A/R and cash performance across all of their payers and entities, yielding insights into how their performance could be improved. Within two weeks, the Virtual Business Office was able to focus 100 trained, experienced A/R professionals on the medical center’s A/R problem, tripling the size of their staff and significantly accelerating cash performance in less than a month. That strong cash performance has continued to date.
But that’s only half the story. At the beginning of this engagement, PwC made the decision to invest in an onsite team to study trends that the Virtual Business Office was identifying and then worked with the client to change their workflows and account distribution across their staff. We helped the client determine how to optimize the A/R staff, and then coordinated with them to efficiently apportion the work between the Virtual Business Office and the client’s team. Weekly meetings with the client were set up to share the Virtual Business Office’s observations and help them identify performance improvement opportunities to address their challenges systematically, at the root cause.
In addition to helping with the A/R production activities through the Virtual Business Office, we were actively working with the medical center to help them improve their processes and train their people. We also helped create the same measurement tools internally that the Virtual Business Office used to drive workflow and productivity, with the objective of helping the client’s entire revenue cycle become highly optimized and self-sufficient.
“The medical center’s successful resolution of their cash challenges has enabled them to consider a more impactful and comprehensive transformation of their revenue cycle and the potential to fund this initiative through incoming payments generated as a result of our Virtual Business Office work efforts”
Safety-net hospitals like our client play an important role in our healthcare system, but they face significant funding challenges. That’s why it’s critically important that a hospital’s revenue cycle be operating efficiently and collecting receivables in a timely manner. Cash solves many problems—in addition to offsetting operating expenses, it also allows a hospital to invest in improving their revenue cycle and the finance function in general. This upgrades overall business operations, efficiency and cash performance. Working with our team, here’s what the client has achieved to date:
Partner, PwC US
Partner, PwC US