How Henry Ford Health Automated the Procure-to-Pay Process with Premier

Key takeaways:

• Learn how Henry Ford Health implemented a top-down procure-to-pay (P2P) transformation to achieve a 79 percent touchless invoice rate.
• Analyzing metrics, data and robust intelligence dashboards can help identify accounts payable bottlenecks and optimize workflows.

• Discover how Premier’s Remitra^® check replacement program helped Henry Ford Health automate their P2P process, resulting in increased efficiency, value and cash-back rebates that contributed to additional revenue.

Healthcare spending is projected to grow 5.4 percent between 2022 and 2031, yet hospitals and health systems are still challenged regarding profit margins. As healthcare leaders create 2024 budgets, identifying operational efficiencies, streamlining expenses and delivering high quality care are top of mind.

Organizations seeking to streamline expenses have found significant savings opportunities in modernizing the antiquated invoicing and payables processes. In an industry that still lags behind others in the shift to a digitalized accounts payable (AP) process.

Healthcare's Procure-to-Pay (P2P) processes are still largely comprised of manual, paper-based processes. In fact, according to Premier data, as many as 70 percent of all invoices in healthcare are paper-based and nearly 85 percent of all healthcare purchasing is still done manually via paper checks.

Across the healthcare industry, these transactions can add as much as $18 billion to $22 billion in unnecessary annual expenses and delay payments to suppliers by 120 to 180 days.

Despite the availability of technology-enabled tools and AP solutions, hospitals and health systems continue to rely on manual, paper-based processes that create costly inefficiencies. A large volume of paper invoices and checks can be overwhelming for a provider’s AP department, not to mention it can result in wasted time and revenue that could be better deployed to improve other areas of the organization.

Henry Ford Health (HFH), one of the oldest academic medical centers in the U.S. with five acute care hospitals, more than 33,000 employees and 6,000 clinicians, recognized the need to automate their processes. HFH was looking to streamline its more than $2 billion annual spend, that accounts for over 2 million purchase order lines and 1 million invoices, to reduce invoices touched by HFH staff, increase organizational efficiencies and capture cash-back rebates for additional revenue.

During a recent webinar, the HFH team focused on their P2P process and shared their accounts payable (AP) automation journey towards supply chain excellence. They partnered with Premier to not only automate the processing and payment of invoices, but also to improve standard processes and procedures.

Automating the P2P Process with Premier’s Remitra^® Solution

In July 2022, the HFH team began their P2P transformation. “This was a front-to-back effort from requisitioning all the way through payment processing,” said Nick Woodall, Director of Procure to Pay, Henry Ford Health.

Once the process with Remitra^® was underway, the team accomplished a 79 percent touchless invoice rate, which means the team helped eliminate the need for manual data entry or physical handling of paper invoices for more than 92,736 invoices over a six-month period.

The team started by establishing internal policies and compliance procedures to help maintain enforcement across HFH. They sought to streamline everything from order processing to invoicing to ensure an efficient and accurate P2P process.

They partnered with Remitra^® to automate their invoice scanning process and initiate the credit card program that leverages a single use authorization card to streamline payments.

They started the automation process by sending:

• Vendor master purchase order details.
• Invoice images and status.
• Payment details including confirmation and reconciliation information.

Utilizing Dashboards, KPIs and Labor Productivity

Technology-enabled invoice processing, streamlined dashboards and other core AP activities can improve employee workflows, which in turn help to extend labor resources, reduce burnout and turnover, and enable operational and cost efficiencies – all important considerations in today’s reality of staffing shortages and shrinking margins.

Remitra^® Provider Intelligence Dashboards are designed to allow healthcare organizations to easily track and monitor key performance indicators (KPIs) such as straight-through or touchless rate, invoice cycle times and approval bottlenecks – all of which affect how quickly and accurately invoices are processed, suppliers are paid and critical products are received for patient care.

HFH worked with Premier to develop reporting that can help drive team performance in multiple areas. They leveraged the following tools and Remitra^® solutions to increase operational efficiencies.

• Provider Intelligence Dashboards were leveraged to make decisions based on real-time data.
• Productivity dashboards provided insights into daily activities to highlight user activity and how many vendors or invoices are requiring additional touchpoints throughout a specific time frame.
• Supplier scorecards helped to identify vendors that could require additional touchpoints.
  

Leveraging Check Replacement Program and Generating Revenue

The HFH team leveraged Remitra^® Check Replacement as a secondary program to their existing banking program to add value and overcome obstacles with vendors.

The Remitra^® Check Replacement program is designed to address providers’ ongoing financial pressures by uncovering hidden dollars and creating new sources of revenue.

“The check replacement program looks for opportunities where an organization is paying by paper check and how they could pay by electronic means to generate cash rebates,” said Charity Bogumil, MHSA, National Director, Remitra^® Provider Solutions.

Automating these processes can help ensure invoices get paid on time so health systems can reap the benefits that help drive revenue into the accounting department, including prompt-pay discounts and other financial incentives from suppliers and rebates from credit card processors.

“We found several opportunities for savings that the banking program was not achieving,” said Candice Pytlik, Vice President, Strategic Sourcing and Procure to Pay, Henry Ford Health. “The Remitra^® team is willing to call in invoices to suppliers and manually enter credit card payments to help us earn savings.”

Remitra^® offered insights into suppliers and vendors for easy review and selection to onboard the suppliers into the program for easy payments and potential to earn rebates.

HFH is continuing their process of automation and hopes to onboard all suppliers, where appropriate, into the Remitra^® platform to continue to obtain operational efficiencies and streamline their payment processes as well as capture rebates that add to overall revenue.

These efforts are vital for HFH and other healthcare organizations looking to gain better visibility and increased efficiency across the P2P process.

Remitra^® is taking touchless invoicing to the next level, helping organizations reduce human errors, reduce costs, generate revenue and refocus resources on more value-added, strategic opportunities. By automating paper-based invoice processes, organizations can improve their workflow and increase efficiencies while reducing burnout.

Ready to automate your processes? Get started with Remitra®.

Learn More

• Hear from Henry Ford Health System on automating the procure-to-pay process in this on-demand webinar.
• Check out our white paper that details how technology can benefit the healthcare supply chain.

The insights you need to stay ahead in healthcare: Subscribe to Premier’s Power Rankings newsletter and get our experts’ original content delivered to your inbox once a month.