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Are Your Supply Chain Accounting Processes Putting Patients at Risk?

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Key takeaways:
  • Supply chain accounts payable (AP) and accounts receivable (AR) processes have a direct impact on patient care.
  • When suppliers fail to be paid in a timely fashion, providers are put on credit hold, which delays shipment of critical supplies to clinicians who need them to treat patients.
  • Using the power of automation, Premier’s Remitra™ platform is helping to solve the contracting, ordering and invoicing errors that often lead to these issues, enabling better care and outcomes.
For more on this topic:

Supplies. They can mean the difference between life and death in a hospital or health system. And while no healthcare organization or the suppliers they work with would ever knowingly jeopardize the delivery of quality patient care in any way, they may unknowingly be doing so with their supply chain accounting practices.

From supply chain back office to the front lines of patient care: connecting the dots.

The fact is supply chain procure-to-pay (P2P) – requisition, ordering, receiving and paying for products and services and its associated accounts payable (AP) processes for healthcare organizations and accounts receivable (AR) processes for suppliers – plays a critical role in empowering physicians to have choice and access to products they utilize to deliver their care.

Without a modern, streamlined P2P process, essential supplies are at risk for not making it into the hands of doctors and nurses at the time they’re needed most. Marian Favors, Executive Director, Customer Support Operations at healthcare supplier KARL STORZ knows the impact inefficiencies in supply chain AP and AR can have on clinicians and their patients.

“Price discrepancies between suppliers and healthcare providers directly affect patient care. If a provider’s purchase order doesn’t match the supplier’s invoice, it creates an exception, and the invoice is put aside. When providers don’t pay their invoices, their accounts payable age. At some point, their account will be put on a credit hold status, and they won’t be able to get the products they need to provide quality patient care. It’s a domino effect. The problem starts in the supply chain and makes its way to the patient, creating an even bigger problem,” says Favors.

Tech-enabling AP and AR departments with robust, digital P2P solutions can help change this – and that’s where Premier comes in.

Today, we estimate that up to 70 percent of healthcare invoices are managed through antiquated paper-based workflows and 5-15 percent of invoices contain match exception errors (according to PINC AI™ data as of October 2021). Paper and manual processes are a burden on AP and AR departments, often leading to these errors. As Marian emphasizes above, errors waste time and add unnecessary cost and delays, which trickle down to the front lines of patient care.

Through Remitra™ – our automated P2P platform built for hospitals and health systems and the suppliers that serve them – Premier has taken a leading role in helping address supply chain AP and AR problems, including price discrepancies and match exceptions, and the negative impact they can have on healthcare delivery.

By eliminating paper-based workflows and consolidating all steps in the P2P process into a cloud-based platform, Remitra™ helps to reduce contracting, ordering and invoicing errors that can cause ripples in the supply chain, creating costly price discrepancies and match exceptions that delay payment and delivery of supplies to the point of care.

Here are three powerful ways the Remitra™ platform is modernizing supply chain accounting processes for better patient care.

  • Delivering a true end-to-end solution. The Remitra™ platform integrates a healthcare organization’s enterprise resource planning (ERP) system with a supplier’s system, regardless of ERP type or group purchasing organization (GPO) affiliation. This integration enables the platform to catch and eliminate errors that occur during ordering and prevent them from making it as far as the invoice.
  • Creating a seamless data flow. With the Remitra™ platform, healthcare organizations and suppliers conduct their business on a common, standardized platform, allowing data on pricing adjustments to be mined and flow freely between parties. Suppliers can easily upload pricing changes, then healthcare organizations can easily update their item masters, all of which helps to cut down on match exception errors.
  • Enabling touchless order processing. Input errors can easily happen when purchase orders (POs) and invoices are handled by human hands. The Remitra™ platform, powered by artificial intelligence (AI) and electronic data interchange (EDI) technology, creates efficiencies that free up staff to focus on other priorities and help to eliminate human error that can lead to price discrepancies and match exceptions.

According to Favors: “A perfect order is a touchless order, one that’s automated, processed without any human intervention and gets out quickly and accurately. I see all the benefits of automation in Remitra™ and know where it can drive our industry to. Automation creates more bandwidth on both the provider and supplier side, cutting down on match exceptions that have to be dealt with manually, so people can work on the things that really matter.”

A look back and ahead: leveraging technology to optimize labor and quality.

Over the last two years, COVID-19 changed the way hospitals and health systems deliver care and the way they do business. At every level, healthcare organizations have been pushed out of their comfort zones to deliver the best possible care, both efficiently and cost effectively. Having the right supplies at the right time they’re needed should never be a worry in care delivery.

Through the digitization and automation of the P2P process, the Remitra™ platform is helping to ease the strain healthcare organizations and their suppliers have been dealing with – saving costs, improving cashflow and enabling administrative efficiencies that lead to better patient care and outcomes.


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