A Cure For What Ails Healthcare Procurement
Healthcare providers aren’t in the business of supply chain management, and yet, procuring necessary medical supplies is integral to delivering care. Making procurement and supplier payment as efficient and cost-effective as possible allows hospital systems and large care providers to better manage both their human and actual capital. With payments optimized, organizations can focus on what matters most: their patients.
Implementing an automated accounts payable platform significantly cuts down on paper payment and the time, cost and errors associated with it. Additionally, the right platform can do more than cut costs; it can also generate revenue. Automated systems are able to use rebates and bargaining power to make it easier to engage with the very large medical suppliers that typically exercise great control over bargaining and card acceptance.
KeyBank has partnered with GHX (Global Health Exchange), the leading provider of cloud-based supply chain automation software solutions to the healthcare sector, to bring its clients a best-in-class electronic exchange network that connects healthcare providers with leading suppliers of medical products. The offering takes into account the unique challenges of healthcare procurement and helps providers manage the proliferation of multiple payment solutions, including card options, payment financing solutions and primary treasury bank solutions, including ACH (automated clearinghouse) payments.
“Administrative costs in healthcare are very high and continue to rise. Managing and reducing those administrative costs help hospitals and health systems deliver on their core mission to their patients,” said Peter Wheeler, senior vice president and group lead for healthcare and insurance vertical. “Health systems and healthcare companies are trying to allocate as much of their resources to the provision of care, not to cutting checks and reconciling them.”
The Benefits of Healthcare AP Automation
Many healthcare and hospital systems have lagged in adopting automation for invoices and payment processing. Once they do, the advantages grow apparent.
- Better use of internal resources: Automation saves time and the costs associated with paper billing and payments. It also allows procurement and accounts payable teams to work together more efficiently.
- Supply chain improvements: On a macro level, the platform improves supply chain efficiency, spend management and procurement processes and payment cycles, thus reducing overall expenses.
- Access to a strong network of top suppliers and preferential pricing: Thousands of leading suppliers and hospital systems are already on the system, so it creates a strong network effect around prices for the most commonly needed supplies.
- Enhanced security: Manual payment processes are vulnerable to human errors and fraud. An automated platform gives users greater payment control and visibility, as well as access to vetted suppliers and trackable payment options, for increased security.
- Seamless integration: This system has the capability to integrate with other ERP (Enterprise Resource Planning) systems. This compatibility means that payment reconciliation, extended payment plans and rebates for payment types can be easily tracked against expected expenses and revenue.
Customizing the System for Your Healthcare Organization
Implementing any supplier payment platform should begin with understanding your current processes and how automation can ease and improve them. Key and GHX get to know your vendor mix and profile – who you’re paying, terms, volume, and frequency, and come back with a recommendation. They identify which vendors are already using the system, and for those that are not, conduct a vendor outreach strategy. Then once a client is using the system as a buyer, Key and GHX continue to evaluate and advise.
“This isn’t a one-time thing, this is an ongoing partnership,” said Wheeler. “As purchasing trends change and as vendor mix changes, KeyBank and GHX are there with our clients, employing new strategies for how they pay their vendors, so they’re not missing out on opportunity for automation.”
KeyBank helps connect providers and suppliers – so you can focus on providing excellent patient care.
Healthcare supply procurement and vendor payments can be complex, time-consuming and costly for healthcare organizations. KeyBank’s specialty healthcare financial teams put together proactive solutions for your healthcare organization. We take a consultative approach to help solve your organization’s payments pain points and stick with you to make sure our solution continues to work.
For more healthcare insights from Key, visit key.com/healthcaretrends.