'Reform' plan pushes business office staff past days in AR goal - accounts receivable

Healthcare Financial Management, Dec, 1993 by Bill Siwicki

In September 1992, days in accounts receivable (AR) at The Eye Foundation Hospital in Birmingham, Ala., stood at 53.93. By September 1993, days in AR at the hospital had been reduced to 36.04.

What happened?

The story begins with two individuals who wanted to improve business office operations: Libby Bailey and Keren Hale, controller and business office manager, respectively, at the hospital. In their own words, they set out to "fix the business office."

"We began a productivity project in June 1992 with the goal of reducing days in AR," states Bailey, a member of HFMA's Alabama Chapter. "We knew we could do a better job than we were doing at the time.

"Prior to starting the project, office staff concluded a computer conversion. The conversion process opened our eyes to a lot of things that were not being done or could be done better by the 17 individuals who comprise the staff of the business office and supporting departments. So we decided to fine-tune business office practices and procedures."

Bailey and Hale hired a consultant who specialized in healthcare business office productivity to analyze their practices and procedures and help implement improvements. From the start, their efforts to "reform" the business office received strong support from the hospital's administration.

"I have never been given a voice to make changes as strong as the one I have been given at The Eye Foundation Hospital," remarks Hale, also a member of HFMA's Alabama Chapter. "The hospital's administrators and the board of trustees were very supportive. One reason the trustees were so supportive was that they really know the impact of days in AR on cash flow. The total quality management buzz in the industry may also have prompted their support. It made them more attuned to the need for change and employee empowerment."

One of the key factors Bailey cites as responsible for the hospital's previously high number of days in AR was staff turnover. She attributes frustration and "burnout" as the reasons for the high turnover rate in the business office.

"Things were not getting done as they should be," says Bailey, "so I asked myself if we needed more full-time employees. According to all the professional publications I read, we did not. I then asked myself how we could do more work with the same number of people. That was the key question."

To answer this question, the consultant who was hired met with staff members individually and solicited their perceptions of the work they did and compared their perceptions with what management staff said they were supposed to be doing. The consultant also asked staff members what management could do better.

Based on the consultant's findings and Bailey and Hale's recommendations, a business office reform plan emerged. The plan called for the following actions.

* Review registration, billing, and follow-up operations for accuracy, timeliness, and correct priorities.

* Review appropriateness of all tasks.

* Review strengths and weaknesses of staff; capitalize on strengths and provide training to reduce weaknesses.

* Review procedures; develop written procedures.

* Rewrite job descriptions to provide clearer, more thorough guidance for each employee.

* Provide constant feedback to staff and rewards for positive performance.

The consultant worked with business office staff in a full-time capacity to help implement the plan and spur staff toward--and past--their goals of increasing productivity and reducing days in AR.

"Staff members keep doing better and better," comments Bailey. "We've surpassed our goal and would love to maintain our days in AR in the 30s. I believe the best way to do this is to continue to recognize the staff for their remarkable achievements and offer them the continued education they may need."

Bill Siwicki is associate editor of HEALTHCARE FINANCIAL MANAGEMENT. Suggestions for Provider Perspective topics should be sent to his attention at HFMA, Two Westbrook Corporate Center, Suite 700, Westchester, Illinois, 60154-5700.