How Geisinger saves $5.3M annually by improving its management of outsourced vendors


For roughly 10 years, Danville, Pa.-based Geisinger Health System worked with a network of nine vendors to track the system's hospital and clinical revenue collections. However, the organization's leaders quickly realized the multi-step outsourcing process was too cumbersome and lacked efficiency.

"When the outsourcing occurs … there are reconciliation issues, vendor expense issues and invoicing problems. The use of multiple vendors just complicates the process," Ted Grozio, assistant vice president of revenue management at Geisinger Health System, said during a Nov. 1 webinar sponsored by Connance, a Waystar company, and hosted by Becker's Hospital Review.

To aid in the collections process, Mr. Grozio said Geisinger deployed a technology-enabled platform designed to overhaul the system's relationship with its vendors for collections in 2010. During the webinar, he discussed the process of integrating the technology and its effect on the system's financial bottom line.

Mr. Grozio noted that managing nine self-pay and insurance outsourced vendors was no small task, even for the 13-hospital system, which has the resources to serve more than 3 million patients across its care locations.

"Vendor partnerships are difficult to manage. When you have one system and one vendor, obviously it's a lot less complicated. But when you move into multiple vendors with multiple systems, it creates a whole host of different issues like trying to reconcile the accounts and making sure those accounts are placed appropriately," he said.

Among those issues was the lack of communication between Geisinger and its vendors. Mr. Grozio noted that communication between the organizations typically included either a phone call or email, which did not provide any opportunity to create an audit trail. The system in place also did not provide Geisinger with a way to compare each vendors' performance with one another. As patient volume steadily increased, officials engaged in more than 160 financial transaction files per week — an overwhelming figure that, on occassion, resulted in errors or oversight, he said.

"The outsourced operations were good, but [we] knew [they] could be better," Mr. Grozio said.

In 2010, Geisinger implemented Connance Agency Manager, which acts as an intermediary between the health system's accounting systems and its vendors. Mr. Grozio said the platform was able to address many of the challenges the health system faced regarding collections and account management. Through the platform, Geisinger was able to check invoice amounts and compare with collections, and establish an audit trail through regular communication between the health system and its nine vendors, among other improvements. Geisinger was also able to use Agency Manager to provide each vendor with feedback and compare their performance with the industry standard.

Since implementing the platform, Geisinger has seen an annual increase in cash collections and cost-savings of $5.3 million and saved roughly $95,000 by eliminating invoice errors. Mr. Grozio noted the program's greatest strengths have been its ability to track patient collections per account for Geisinger's hospitals and clinics, and the uncovering of issues with the health system's internal payment plans, which added to Geisinger's collections issues.

"What has changed for Geisinger during this process? … We've developed strategies to correct deficiencies in the processes to ensure that we can get the maximum efforts and collections from our agencies. " Mr. Grozio said. "We were [also] able to verify and simplify the invoicing process for ourselves. Not only are we able to verify all the invoices, but [the Agency Manager] automated the process, so we no longer have to perform random checks manually."

To view the webinar, click here.

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