2024 has been described as a financial ‘’make or break’’ year in healthcare. SpendMend Research Supervisor Zachary Markham explains to Jim Cagliostro why time and data are money for hospitals.  

 

Episode Introduction 

Zach explains why the lack of timely, accurate data can delay recovery of credits, and why most hospitals only have 50% visibility into their spend and accounts payable processes. He also shares why duplicate payments and credit on spend are the top two methods for recovery of costs, and highlights how uncovering dark data saved SpendMend clients $413 million in 2023.

 

Show Topics

 

• Data analysis identifies duplicate payments
• Timely data is vital to maximize cost savings
• The significant cost savings potential hidden in dark data
• 3 challenges to gathering hospital data
• Positivity and communication skills are essential in leadership

 

 

02:18 Data analysis identifies duplicate payments 

Zach provided a ‘’birds eye view’’ of data analysis.

‘’So, when we initially get a client's data in, a hospital's data, we jump right on that data and we go ahead, we search account numbers and vendor contact information for each. So, if it's a larger healthcare system, we'll search for each entity within that healthcare system. We'll search for account numbers for all those, as well as the contact information for vendors. And then, for duplicate payments, that's a large revenue stream for us. So, that starts in the data scrub team. They scrub down the data and identify some good potential duplicate payments. And a duplicate payment is just an invoice that was paid twice for one reason or another. And once the data scrub team is done with that, they'll pass it off to us and we'll go into our client's imaging systems, where they store their invoices and we will pull those invoices and pass it back over to the data scrub team for validation. And I guess the third one here would be just various invoice pull requests for other departments, including the tax team, purchased services, as well as med device, just to name a few. And then, the last one I'll cover here just for the bird's eye view, PHIQ, which is protected health information. So, we've talked about data and it's extremely important to obviously protect our client's data, but it's equally, if not more important, to protect the patient's data as well.’’

 

05:24: Timely data is vital to maximize cost savings

Zach said hospitals sometimes don’t obtain credits for years if price discrepancies aren’t found quickly.  

‘’I'll give you an example from my time as a pricing analyst. So, as a pricing analyst, we would review data price discrepancies that were about one to two years old from present from what they were currently paying, the hospitals were paying. So, we'd go through identify, "You're paying this vendor $20 for this item, when you should be paying $10 for that item," just as an example. And we would get that and working one to two years behind them. I guess the quicker that we would finish our review and then turn that back into the client, they'd be able to mend the price that they're paying, get it back to the contracted or agreed upon price. And also, collect the credits that were outstanding for the time that they were overpaying. So, I guess the sooner you can identify that you're paying at a higher rate than the contracted price for items, the sooner that you can correct it and get credits from the vendors.’’

 

07:44: The significant cost savings potential hidden in dark data

Zach said hospitals only have 50% visibility into their spend and accounts payable processes. 

‘’Dark data is information that is hidden or not visible to a hospital for a variety of reasons. But it comes down to them not having the time, resources, or insights to uncover their own data blind spots. And I like to think of this kind of as a puzzle. So, when a hospital or healthcare system hands over their data to us, they're giving us basically a half put-together puzzle, and it's our job to put together the missing pieces or the other 50%. They only have approximately 50% visibility into their spend and accounts payables processes, and this dark data is essential to uncover, so our clients have a full set of data to make and implement decisions. And then what I always like to say is time and data are money. And then, as far as what hospitals can do about it... So, like I mentioned previously, hospitals are rarely equipped on their own to uncover their own dark data. Again, due to lack of time and resources. And that's where we step in as SpendMend to provide unique services that we do. All of our time and resources are used to uncover hospital's dark data through various tools and good old-fashioned investigating, I guess you could say. And in the past year alone, we've actually delivered $413 million back to our clients. ‘’

 

14:23 3 challenges to gathering hospital data 

Zach said access to imaging systems, inadequate software, and losing data can all be obstacles to accurate data analysis. 

‘’Typically, when we get a new client, and again, this will be a rough number, we get probably 80% or so of those clients, we get imaging system access, which is vital to what we do. Then we're able to pull the documents that we need to support our claims. And not only that, but going back to the data, validate the data. That's imaging systems. And I'll break this down into three main categories. So, some healthcare systems or hospitals haven't invested in proper software to store their invoices or any. So, some hospitals don't have electronic imaging systems, so they're old school, storing their invoices on site within file cabinets. And that's tough for us to get to, unless we go on site. So, it's a lot less efficient that way…..And I guess number two there would be kind of the same category here. Some hospitals haven't invested in proper software to store their invoices. So, kind of like the first one, they use electronic folders within their system to store invoices, which in my experience with these sorts of clients, it's very difficult to locate invoices. And a lot of times it's not well-organized. It's timely to search for invoices, and a lot of them just straight up aren't uploaded, aren't imaged in these folders….And then, an issue that I've seen more recently regarding imaging systems, are hospitals upgrading their imaging systems and financial systems and leaving the old one behind. So, in essence, we're losing and they're losing the data that they've collected previously, and just starting fresh. ‘’

 

21:26 Positivity and communication skills are essential in leadership

Zach said skillful listening is also vital to successful communication in leadership.   

‘’Well, I'm very blessed to be where I am within the company as the research supervisor. Anything that I accomplish or get praised for is not mine. It's God who gets the glory. He has blessed me tremendously through my life, but especially here at SpendMend in the past almost seven years. And then, I guess going over to the leadership advice, positivity is essential as well as communication, and then a subcategory of communication would be skillful listening.’’

 

Connect with Lisa Miller on LinkedIn

Connect with Jim Cagliostro on LinkedIn

Connect with Zachary Markham on LinkedIn 

 

Check out VIE Healthcare and SpendMend 

 

You’ll also hear: 

 

Zach’s career journey to Research Supervisor at SpendMend: ‘’I started with the company about seven years ago and I moved through a few different departments…. One being pricing analyst, another being a data scrub technician….. And learning the ins and outs of other departments within the company really set me up or at least paired with my education.’’

How SpendMend helps to identify and maximize cost savings using healthcare analytics: ‘’…. our healthcare systems are just …trying to stay basically afloat at this point.... They don't have the time, the money, the resources to really dig in like, all right, what did we do last week? What did we do a month ago? So, that's where we step in and help the clients along.’’

SpendMend cost savings directly impact the quality of patient care: ‘’’….. that's money directly pumped back into the American health system, which can be reinvested by or reutilized by the hospitals for nursing, if you want to bring on more nurses, staffing specialists, or robotics for surgeries, or whatnot. So, really, we're indirectly, directly affecting patient care and the quality of that patient care, which is what all this work really boils back down to.’’

The top two recovery methods for SpendMend clients: ‘’From my perspective, it would have to be duplicate payments and credits open on statements.‘’

What To Do Next:

 

1. Subscribe to The Economics of Healthcare and receive a special report on 15 Effective Cost Savings Strategies.

 

2. There are three ways to work with VIE Healthcare:

 

• Benchmark a vendor contract – either an existing contract or a new agreement.
• We can support your team with their cost savings initiatives to add resources and expertise. We set a bold cost savings goal and work together to achieve it. 
• VIE can perform a cost savings opportunity assessment. We dig deep into all of your spend and uncover unique areas of cost savings. 

3. If you are interested in learning more, the quickest way to get your questions answered is to speak with Lisa Miller at lmiller@spendmend.com or directly at 732-319-5700.