Concentra is a health care company that provides occupational medicine, urgent care, physical therapy, and wellness services to workers and the general public from 308 medical centers in 40 states. In addition to these medical center locations, Concentra serves employers by providing a broad range of health advisory services and operating 258 on-site medical facilities.
Recently, I was fortunate to have a brief discussion around the transformation of the accounts payable function at Concentra with Kurt Ohlenbusch, Assistant Vice President of Disbursements. According to Kurt, the BancTec solution they utilize currently has proven to be extremely beneficial in terms of reducing costs, improving visibility and accruals accuracy and most importantly, improving patient care service at individual medical centers.
The Issue
Back in 2008 before the AP automation initiative, the process Concentra had in place for AP involved centralized (invoice) data entry and payment but decentralized approvals. Combined with a completely manual and paper-based process, this left AP struggling to get ahead of all the invoices (approximately 50,000 a month) that were flowing in and out. The issue was that a large percentage of invoices would be sent directly to the medical centers (308 of them); operations directors at these centers would then have to open the invoices, put a stamp on it, code the invoice and then approve it with a signature. Then, on an irregular basis, the centers would overnight a bunch of invoices to AP, who would have to manually key them into Concentra’s Oracle back-end and schedule them for payment.
This of course was a very inefficient process, in fact, out of the 21 person AP group two people just focused on dealing with all the paper invoices. There was a constant lack of visibility between the invoices that the centers received and the ones that came directly to AP. This caused a lot of duplicate invoices to be submitted to AP which often led to duplicate payments. A big issue was invoices not getting to AP at all, leaving AP to call vendors every month for copies of invoices. All of this really affected the accruals process, which at most times ended up being more of a guess than based on actual data.
The Solution
All of the issues above were getting to be too much, it was time-consuming for the operations directors at the centers and for AP and it left the company with a severe lack of visibility into its invoices and payments. As luck would have it, around the same time Concentra was going into the urgent care business and had a huge customer services initiative going on across the company. One of the big issues was figuring out how the operations directors at each center could focus more on patients rather than administrative issues. This was one of the main drivers for approving an AP automation initiative. Other factors included the opportunity to improve the accruals process, overall visibility into AP and of course getting rid of paper (or at least removing it from Concentra).
So, after reviewing the offerings of approximately 10 providers, Kurt and his team narrowed it down to a short list. The team conducted an analysis to figure out whether it would be more cost effective to deal with inbound invoices (i.e., opening, sorting, and scanning) in-house, however, they quickly realized that there are companies that specialize in this and can do it more efficiently and effectively. Finally, Concentra chose to go with a provider that combined an outsourced service with an AP approval workflow tool – BancTec. BancTec would receive Concentra’s invoices via a centralized P.O. Box; they would open, sort, scan and perform data capture on the invoices using OCR. BancTec’s AP Master solution which is a cloud-based approval and workflow tool would then be utilized to process invoices.
The Results
Concentra has now been using the BancTec solution for approximately 3 years and a lot has changed:
- The majority of invoices now go to a centralized P.O. Box, so suppliers are not sending invoices to individual centers anymore. As a result, invoices are in the system within 5 days as opposed to anywhere from 15-20 days in the past. This also cut the amount of time that operations directors spent approving invoices down by 50%, leaving them more time to focus on patients.
- AP staff was reduced by 6 people
- The accruals process is significantly more accurate now as invoices are in the system much quicker and it is based on real data, not guesswork
- As most invoices (approximately 65%) are not that complex, they are automatically routed directly to the approvers. The remainder go through an audit step first within AP and this is determined based on the vendor, type of invoice, category, etc.
- Previously, Concentra would send paper invoices for storage to Iron Mountain; this was no longer required once BancTec was deployed.
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