Sutter Health System Case Study

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Case Study Analysis

Introduction

Sutter Health System located in California is a non-profit community-based system of health care. Imperatively, the system of healthcare renders services to patients and households where the healthcare providers link up resources and share specialty and experience to develop and progress the quality of healthcare. In this regard, the non-profit linkage or system instigated an interface with the main endeavor of developing revenue collection of the healthcare amenities that would be gathered from self-pay patients. The traditional or conventional payment processing system had shortcomings that resulted in the delays in the process of efficacious revenue collection of the healthcare facilities. The restrictions and confines of the system of processing were owing to the absence of accessibility to specific information in the account and the members of staff were not in a position and lacked the capability to obtain real-time data and information. The healthcare organization augmented its revenue cycle by restructuring the methodology used in its collections. In this manner, the entity was not only able to restructure its processes and procedures but it also completely transformed the manner in which dissimilar departments were accountable for patient registration as well as collections (Souza and McCarty, 2007). The main purpose of this paper is to delineate a summary of the case study that ascertain the fundamental problems and issues, outlines background information, pertinent facts, the solution undertaken together with the outcomes attained. What is more, the paper will pinpoint and elucidate the accounting practices utilized by California Sutter Health in the definition and solution of its collection issues. Furthermore, I will come up with an alternative solution centered on my individual research and analysis. Most of all, I will provide my individual opinion and perspective of California Sutter Health’s healthcare system and transformation to resolve the problems in its collection of patient payments.

Complete a summary of the case study that identifies the key problems and issues, provides background information, relevant facts, the solution employed, and the results achieved.

Notably, Sutter Health Systems is one of the biggest health care providers within the state of Northern California. The organization was experiencing a progressively rising number of days regarding the outstanding accounts received and at the same time faced a deterioration in dollars collected for the amounts of patient responsibility. The key basis or foundation for this was owing to an amalgamation of high deductible health plans that were being offered by employers together with a rising rate of unemployment owing to a deteriorating economy. Nonetheless, the healthcare organization was able to come up with a solution for increasing its straight collections from self-pay patients. In the 2006 financial year, California Sutter Health dedicated itself to providing its patient financial services personnel on both the back end and front end, the essential apparatus to augment patient payment collections. This report handed the organization the awareness and perception on the manner in which the organization’s plans to carry out a new approach of the collection for the front end to operate in an efficacious manner. To ensure that this is normalized, the personnel started working in the direction of transferring the back end functions of the healthcare organizations to the front end (Souza and McCarty, 2007).

In the first place, California Sutter Health prudently scrutinized policies and procedures to perceive whether any enhancements could be made devoid the necessity for any extra cost for a new system of accounting or a complete restructuring of the departments accountable for revenue collections.

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As outlined in the article, through the analysis of its revenue management cycle before the carrying out the new program, the healthcare organization was able to ascertain numerous issues. One of the issues that were pinpointed was that patient financial service members of staff could not gain accessibility to real-time data and information on important financial and operational pointers and signs such as cash collections together with accounts receivable days. Consequently, more often than not, managers together with members of staff have to wait up to the culminating period of the month to set standards and benchmarks, trace and follow the progress, or make significant business decisions. Another issue pinpointed by California Sutter Health encompassed the accounting system of the health system. The downside and key issue at hand was that the accounting system did not permit managers to separate and analyze specific data or come up with reports on demand to the level of retail necessitated. Imperatively, as pointed out in the article, rather, the region was dependent on a especially trained programmer to come up with these reports, more often than not, giving rise to expensive and pricey delays in ascertaining and fixing problems and issues. What is more, the central business off personnel of the organization also experienced suffering owing to the lack of real-time data and information (Souza and McCarty, 2007).

Subsequent to ascertaining the aforementioned issues within the organization, California Sutter Health was able to lay emphasis on a number of key benchmarks and standards including the following:

1. Billed accounting receivable days

2. Gross accounts receivable days

3. Percentage or proportion of accounts receivable over a period of 90 days, 180 days or 360 days

4. Cash collections

5. Unbilled accounts receivable days

6. Accounts receivable days for key players (Souza and McCarty, 2007).

Identify and explain the accounting practices California Sutter Health used in defining and solving its collection problems.

One of the key accounting practices that was employed by California Sutter Health in delineating and resolving its collection problems is system accountability and transparency. In the preceding periods, the organization has been utilizing the self-pay approach for collecting payments and this in the end failed to give guarantee of accountability as well as capitalizing on revenue generated. The healthcare organization assessed its level of culpability and transparency within its system of revenue collection. This kind of appraisal gave rise to the ascertainment of the key issues that could be resolved within the system. The conventional system of undertaking things failed to instigate culpability to the staff within Sutter Health that were tasked with the duty of revenue collection. As a result, the organization scraped off this conventional system and put in place a new system (Souza and McCarty, 2007).

Another accounting practice that the organization utilized is cost reduction. Based on accounting principles, it is necessitated that establishments and entities have to utilize cost reduction approaches or profit increase. There was a movement in the decrease of costs and expenses of operations and at the similar time increasing the cash flows of the entity. In that regard, the system of revenue collection became amalgamated and integrated. The wide-ranging and all-inclusive training program on the prevailing patient financial services members of staff was purposed to decrease the costs of employing officially educated and trained personnel who would meet the requirements and be eligible to utilize the….....

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