Optimizing healthcare liquidity through virtual account management
0:04
Welcome to today's webinar, Optimizing Healthcare Liquidity through Virtual Accounts.
0:09
This is Ashley Myers, HFMA's Client Services Specialist, and I will be moderating today's session.
0:15
Now it is my pleasure to welcome today's speakers.
0:18
Amanda Jensen is Senior Accountant and at Select Health with nearly a decade of healthcare experience specializing in internal audit and process improvement to strengthen financial operations.
0:29
Mark Nielsen is the Director of Accounting, Operations and Financial Reporting at Selecthealth, where he leverages over 15 years of healthcare experience to lead strategic initiatives that enhance financial reporting, insurance product development and operational efficiency.
0:44
Benny Pennington is the product lead for Keybank's Embedded Banking division, where he drives go to market strategy and fintech partnerships to deliver innovative embedded banking and integrated payment solutions.
0:56
And with that, Benny, I'll turn this presentation over to you.
1:00
Thank you, Ashley, and to all of the HFMA members and attendees here.
1:04
And a special thanks to Mark and Amanda from Select Health for joining us today.
1:09
So first, I want to set the table a little bit by turning it over to Mark.
1:14
Could you tell us a little bit about Select Health, what you do in healthcare, and a little bit about what your role is at Select Health?
1:20
Sure.
1:21
Hi, everyone.
1:22
Hi, Benny.
1:23
Great to be with you all today.
1:25
Thanks for having us.
1:26
Good to be here, but so Select Health, we're a Regional Health plan.
1:31
We're part of Intermountain Health, headquartered in Utah.
1:36
And so Select Health, we, we currently sell plans in Utah, Idaho, Nevada and Colorado.
1:43
And we're, we're always looking for, you know, opportunities and ways to expand, provide our services in new markets.
1:49
So we're continually looking for, you know, additional geographic areas to to enter.
1:55
And as a health plan, we participate in a lot of different lines of business.
2:00
We sell commercial plans, large employer, small employer individual plans and also ACA plans, ACA individual plans.
2:09
We also participate in, you know, the government programs, Medicare, Medicaid and we also serve a self funded large employer self funded plans.
2:20
So for me personally, I'm the director of accounting here at Select help.
2:23
I've been with the company for 15 years as as it was mentioned.
2:26
And I, I oversee the financial reporting and controls for the company.
2:32
And as part of my role, I work closely with our treasury function to manage our cash and the many bank accounts that we have.
2:39
We have somewhere close to about 100 bank accounts.
2:41
I can't keep track of them all anymore, but there's there's quite a few and I also have oversight for all the dollars flowing out of the organization, which has a payer.
2:52
You can imagine that's, that's a lot of dollars, a lot of dollars to keep track of.
2:56
That's a little bit about me.
2:59
Thank you, Mark, that's fantastic.
3:00
Very robust job there and definitely a lot for you to manage.
3:04
So Amanda, tell us about your role at Select Health as a senior accountant.
3:09
What does your day-to-day look like and what is your role entail?
3:13
Yeah, so I'm a senior accountant like you said with Select Health.
3:16
I've been with the company for about 10 years.
3:20
I manage how our company sees and controls cash across one of our lines of business.
3:27
I've assisted in setting up the tools and structures and that so that everything can be in one place, having a greater visibility and creating efficiency within our company by decreasing the amount of time we spend setting up and reconciling different bank accounts.
3:48
Got it.
3:48
OK.
3:49
And Mark mentioned you guys have close to 100 different bank accounts.
3:52
Can you tell us a little bit about why you have so many and what you all do with all those different bank accounts?
3:58
Yeah, I'm sure, Vinny, as Mark mentioned, we do have a lot of different lines of business and populations we serve.
4:07
And as part of that, we have different claims funding needs and the need to keep track and keep those funds separate from one another.
4:16
And so we utilize different, different bank accounts to do that.
4:22
Got it.
4:23
OK.
4:25
Having to manage over 100 bank accounts does sound like it could be a lot here at Key.
4:31
In my role, I get to work with a lot of clients like Selecthealth and others that have to manage a lot of different challenges when it comes to liquidity management and financial management of their organization.
4:42
Especially in healthcare, we're seeing challenges with liquidity management, receivables, transparency, complex reconciliation, and these are all becoming harder and harder and decentralized organizations that have very large transaction volumes.
4:56
A lot of times the traditional treasury tools that bank that clients were given weren't designed for this environment as they can be rigid and leave gaps in visibility.
5:05
Mark, I want to ask you a question in that context so as to your perspective as a healthcare organization insider, what are some of your biggest day-to-day frustrations when it comes to treasury management and accounting?
5:19
Yeah, Benny.
5:20
So I, I got to lead off, you know, we, we have a great treasury team here at the Select Health and Intermountain Health who help us out along with a great banking partner.
5:29
So that, that certainly helps with the day-to-day operations.
5:32
And I'm, I'm very grateful for them and the work they do.
5:36
But for, for me personally, I, I get frustrated with a lot of the manual processes that we have to work through with the creation of those accounts with, you know, Treasury specifically, we, we open and maintain a lot of different bank accounts like like we've mentioned.
5:53
And to open a new account it, it takes a lot of time there.
5:58
There's a lot of, you know, processes and controls that you have to go through.
6:02
And as an accountant, you know, I love controls.
6:04
Controls are good.
6:05
Don't want to circumvent them, but sometimes it can just be, you know operationally, operationally frustrating when we when we need to move quickly on certain things to help a client or whatnot.
6:19
And then from an accounting standpoint, every time we open a new account that's an additional reconciliation that that we need to complete on, on our side.
6:30
And of course, you know that there is some automation in those processes that we're that we're able to leverage, but there's still a lot of manual components to to each of those.
6:40
And so, so each one takes a little more time.
6:43
And, you know, we're, we're not necessarily getting additional resources to, to help, to help manage those reconciliations.
6:54
But yeah.
6:55
And you know as yeah, sure, this is very helpful.
6:59
And you know, one of the things that you mentioned in there was, you know, a little bit of growth with Select Health.
7:04
We've seen Select Health grow tremendously over the last couple years.
7:07
What does that growth mean to the complexity of the accounting team on a day-to-day basis?
7:12
Can you tell us what is that, you know, increasing growth and expansion of Select Health mean for the bank accounts that you manage and how you have to do some of your daily operations?
7:23
Yeah, growth is good.
7:24
We, we love growth.
7:26
It, it keeps the lights on, it keeps us busy and we, we enjoy being busy most of the time, I think.
7:31
But the yeah.
7:35
But as we continue to grow and you know, as the healthcare landscape continues to change, we find ourselves creating anywhere between, you know, 10 or 30 new accounts each year.
7:48
And you know, this is due to kind of how we manage our claims funding for our, our different lines of business.
7:55
And you know, there's also various regulatory and compliance issues that, you know, we need, we need to find ways to operationally work through those from time to time as, as they, as they change.
8:10
And then there's also just, you know, the normal operational improvements or solutions that we're kind of working through as, as we understand new things or need to be able to report things differently that can lead us to, you know, decide to make a new bank account in order to track and separate various things to meet the needs of the business as as it continues to change.
8:35
So there's, there's quite a lot, but, and, and as I mentioned before, you know, that doesn't necessarily equate to additional resources.
8:42
As we continue to grow, there's a lot of pressure to, you know, do more with less or do more with the, with the same amount of staff that we we currently have.
8:53
So we're always looking for ways to to do things smarter, not harder.
8:59
So Yep, yeah, that thank you.
9:02
That a lot of what you said resonates with what we've heard from a lot of other healthcare clients that we've spoken to having to do more with less, having challenges with, while growth is good, it does add additional complexities.
9:14
Some of the other healthcare clients that we've spoken to have expressed similar concerns.
9:19
We've got some large hospitals that we work with that are trying to manage accounts that are aligned to different institutes within the hospitals.
9:25
For example, they've got different accounts that they have to maintain for the neurology department versus cardiology, etcetera, and having to segregate all those funds from those different departments.
9:35
We also have large DS OS that we work with.
9:37
They have to manage funds across multiple different providers.
9:40
Having to segregate those funds, all needing detailed visibility and better cash management and the ability to open accounts instantly to avoid a lot of those struggles that they have with, with, you know, opening 10 to 30 new accounts a year.
9:52
So everything, as you said, definitely aligns with what we've heard from some other healthcare clients.
9:57
So with that, we're going to go to our first poll of the day and I'll read this out and then everyone you should be have the ability to answer directly within the zoom.
10:06
And the first question is, what pressures are you facing in today's healthcare environment?
10:10
What pressures are you facing in today's healthcare environment?
10:13
Is it A doing more with less?
10:15
B, traditional treasury platforms that can't keep pace, C, managing liquidity across complex organizations becoming increasingly difficult or D, something else.
10:28
So while everyone answers, Amanda, I'd love to hear from you and Select Health based on this.
10:33
What is what are some of the top pressures you're facing in today's healthcare environment at Select Health?
10:39
Yeah.
10:39
I think like Mark said, I think doing more with less is what we have kind of found here.
10:48
Having to have so much work with not necessarily getting more employees to keep up with that work.
11:00
Sure.
11:01
The work continues and they keep asking you to to work longer, I guess, huh.
11:08
OK, so I see the poll results here.
11:11
So we've got 71% of our audience agrees with you Amanda saying the number one pressure they're facing is doing more with less followed by managing liquidity and other.
11:22
So thank you.
11:22
So there will be a couple more polls coming up, but now what I'd like to do is pivot a little bit and let's talk about some emerging technologies that are coming to help solve with all of these challenges, specifically in healthcare.
11:35
So one of the tools that's gaining real traction right now is virtual sub accounting technology.
11:40
In plain terms, sub virtual sub accounting is a way to give financial leaders real time visibility and control across multiple different business lines or units and doing so without the complexity of having to open and manage hundreds of physical accounts.
11:54
Some of the biggest benefits we've seen with virtual sub accounting are reducing manual processes which can directly increase efficiency.
12:02
We've seen benefits of strengthening financial oversight while also keeping operations flexible.
12:07
We've seen it be able to simplify reconciliation and audit readiness.
12:11
And we've also seen it improve the time to be able to open accounts and even delivering self self-serve opening options.
12:20
So, Mark, I know select help looked at virtual account management a while ago when you first got introduced to the solution and, and started evaluating it, how did virtual account management compare to some other treasury or accounting reconciliation structures that you all had considered?
12:36
Yeah, Benny, when when I was first introduced to it, you know, I, I thought, you know, that's, that's a great idea, but it wasn't really one I could quite figure out, you know, how, how could we, you know, utilize that operationally?
12:51
You know, that that idea of having one parent account with the, with the many sub accounts underneath the the thought of that like reducing the need to have a one to one bank account, opening one traditional account that we were used to and moving away from that.
13:13
Obviously from an operational standpoint, being able to create those accounts, those sub accounts within the parent account on your own, definitely a a big time saving potential there.
13:25
But then from, you know, taking an accountant's look at it from the reconciliation and being able to not have to pull individual bank statements or whatnot to be able to do a reconciliation, but to be able to pull 11 bank statement for the parent account that had all the, the details necessary to, to reconcile at that, at that lower level.
13:50
That was, that was really something that kind of pulled us in And, you know, was, was different than what we we were used to with our with our other accounts.
14:01
And, you know, at the time really looking for a way to be able to to utilize it and find a way to, you know, understand it and operationalize it within our within our business.
14:12
That makes sense.
14:13
Yeah, I can definitely see a huge benefit to that to being able to do the reconciliation and bank statements one time as opposed to 100 times with 100 bank accounts.
14:20
Certainly get that.
14:21
So Amanda, you all have been using virtual account management for about 9 or 10 months now.
14:26
What operational efficiencies have you seen from your desk since you've started using the virtual account management system?
14:34
Yeah, before, when we were opening traditional accounts, it required a lot of paperwork, a lot of approvals, bank coordination.
14:43
It could take potentially weeks and just set up those accounts.
14:47
With virtual accounts, we can spin up a new account, a new sub account within minutes entirely with within our own control and our own system.
15:00
The agility is critical in healthcare where we often need to quickly segregate funds for a new program or a new client or regulatory requirements.
15:13
And it gives us the flexibility to do that.
15:17
And I guess like Mark just said, previously balances were kind of scattered between many accounts requiring us to pull a bank statement for each individual account.
15:30
Whereas now it gives us kind of a centralized view and having one parent account with the balance is broken down into sub account, which means we can track activity by purpose, claims, premiums while still being able to see a big picture at a glance.
15:50
It gives you both the high level and the detailed information without all the extra effort.
15:58
Also, with your traditional accounts, reconciliations were very manual.
16:04
The virtual accounts have streamlined this by letting us embed key details like reference numbers or memos into each transaction.
16:14
This allowing us the the details to to flow more automatically and so the reconciliations are smoother, faster and less air prone.
16:27
Awesome, awesome.
16:28
And if we had to, you know, put some context around, you know, how much easier or how much time savings it has been, You know, what does that reconciliation process look like time wise now with virtual accounts versus what it would be without your virtual account system?
16:44
Yeah.
16:45
So before the virtual account system, if you had dozens of accounts, you're spending that time to download each of those statements before you're even really able to put any effort into reconciling it.
17:01
And then you have each, each one is its own Excel spreadsheet, whereas with the virtual accounts it and, and also, I guess, sorry, you're also with those managing of accounts.
17:19
You're also, you have heavy resources into that because you have to have multiple accountants reconciling those dozens to, you know, 100 different accounts.
17:31
Whereas right now we're doing this with one or two of us.
17:38
That's awesome.
17:39
Great to hear that it's been valuable to you.
17:41
You know, we've seen other clients that have delivered similar messages to us about some of the benefits they've seen and at least to a larger shift that we're seeing in healthcare financial management where leaders can be more proactive and how they go about reconciliation and liquidity views instead of having to be reactive, which they were forced to do based on time constraints and a lot of the other factors that you mentioned there.
18:06
So with that, let's go to our second poll of the day.
18:10
And again, you should be able to answer directly in Zoom.
18:12
And this question is very simple.
18:14
How many accounts are you managing today?
18:16
Are you managing less than 10, between 10 to 50, more than 50 or way too many to count?
18:25
Now, Amanda, you guys have been upfront on this one that you guys have, you know, close to 100.
18:31
Can you tell us again how many new ones are you adding per week or per month?
18:36
I mean, as of right now we're probably adding I would say about 30 a year.
18:41
So, but like Mark said, way too many to count at this point.
18:48
And with Select Health's growth, are we expecting that number to keep increasing year over year like a steady pace of another 30 or year?
18:58
Yeah.
18:58
And it it certainly depends on on the business that we're selling and you know, the various regulatory issues that come up that we were trying to solve.
19:08
But on any given year, I would expect us to create at least 5 to 10 new accounts throughout the year.
19:18
Got it.
19:18
OK.
19:19
All right.
19:19
And let's see what our results are.
19:23
All right.
19:23
So pretty split.
19:25
So 32% are saying too many to count.
19:29
So definitely aligned with with select health there.
19:32
And then we're seeing between 10 to 50 and 25% with less than 10.
19:36
So a a broad range across all the spectrum.
19:38
But yeah, almost a third of our clients saying well more than 50 and almost too many to count.
19:43
So it does sound like an A challenge that's common across all of the HFMA members attendees here.
19:49
So now let's go, let's bring some of this to life a little bit more directly with the select health story.
19:55
And, and thank you again, Mark and Amanda for some of the detail that you're offering here.
19:59
So Mark, you talked about some of the challenges.
20:02
So then when virtual accounts were presented to you, what were some of the specific goals that you had as you went to go implement?
20:11
Virtual account management that you were hoping to alleviate, I'm imagining it's, you know, aligned a lot to the challenges you had, but I imagine there were a couple maybe additional things and goals that you had outside of that as well.
20:23
So what were you hoping to gain from the virtual account management system?
20:27
Sure, Benny.
20:28
I mean, for, for us, it was, it was really quite specific thing to be honest, but it was, it was a new, a new product that our sales team came to us with and said, you know, we're, we're going to start selling this.
20:42
And you know, as, as the finance and accounting function, we, we had to figure out how to operational, operationalize that.
20:51
And, you know, sales can be kind of creative sometimes and accountants aren't known for or encouraged to be creative.
20:58
But so we, we had to kind of think outside the box and, you know, determine the, the best way to do this because to, to do it with our existing kind of account structure.
21:11
Just, it would have been, it would have been way too much for us to manage.
21:15
We, we would have needed to hire additional employees to, to manage it.
21:20
That just, that wasn't going to happen.
21:23
And then so obviously, I, I, I've been told about the BAM accounts and I thought, you know, that might be a, a really good use case in this particular situation.
21:35
But sorry.
21:39
And you know, with the VAM accounts, being able to create those, those virtual sub accounts in real time, that was one of the key, the key components for us in, in being able to operationalize this, this new product that we, we're, we're going to start selling.
21:59
And so we, we utilized, we utilized that and it, it helped us keep those funds separate together, but separate so we can meet the, you know, the regulatory requirements and the, the tracking requirements for this.
22:19
And it was, it was just, it was great.
22:22
Without it, we wouldn't be able to to, you know, operationalize that product.
22:28
Awesome.
22:28
OK, thank you for that.
22:29
So what you said at the end there, keeping the accounts separate but together.
22:34
Let's talk about that just a little bit, Amanda.
22:36
So I know you all are in healthcare insurance specifically, and I know there's some regulations around segregations of funds and there's also some operational efficiency that you have internal.
22:46
Can you speak to a little bit around why you all segregate funds and the benefits you get, you know from the sort of the outside reasons as well as the internal reasons for those segregations of funds?
22:57
Yeah, Benny, like you said, we are in insurance so it is highly regulated.
23:02
So one of the reasons why this made sense to us is the IT it still kept with the regulations that we needed to comply with, allowing things to be so separated but yet roll up together so that we could give that high level view without having to lose the all the detail within it.
23:29
And it also gave us, you know, like I said, transparency and to show, show where the money was coming from and where it was going to and how we were using it.
23:41
And again, simpler reconciliations, just allowing us to be able to assign everything to 1 sub account or you know, break it down.
23:58
So very helpful, very helpful.
24:02
And so can you just walk us through, let's say that sales team went and sold too much again and came to you today and said, hey, we've got five more, we need to open five more new accounts.
24:13
Can you walk us through what is your actual process that you do in the system to open 5 new accounts?
24:19
Yeah, like I said, because it is one parent account that everything is opening underneath, it's very simple to open those accounts.
24:29
It takes less than 5 minutes to basically input the information in and it's all at your own fingertips.
24:39
You don't have to involve the bank.
24:41
You don't, you know, it's just making sure that you have the operational, you know, understanding to do so.
24:52
Got it.
24:53
Now, I always have mixed feelings when you say you don't have to involve the bank because of course I want to stay critical to the operations, right?
24:59
But we still love the bank.
25:02
But it sounds like everything that you need is in one unified system that's also tied to your online banking.
25:09
Yes.
25:11
OK, got it.
25:12
And so then once you've set up your account, what does the process look like if you then want to start money movement inside of that account that you set up?
25:22
I mean, we, we, we're still utilizing our treasury function to help us with the, with the movement of funds into the VAM, the, the virtual accounts.
25:32
But, but once that money is in there, it's, it's very easy to, you know, put it into your different, we call them buckets, but put them in the different buckets or sub accounts.
25:43
It's very easy to to move, move those around, very easy to track the, the ends and the outs at that at that lower level again, while while also being able to see it from that that higher level and have that full visibility to what's going on.
26:00
So it's, it's quite an easy process once we have everything in there.
26:06
Awesome.
26:06
OK, And this is for either of you, Mark or Amanda, what, what lessons have you learned or what are the biggest results or takeaways that you have that you would want to share with some of the other H FM A members here?
26:17
You know, what lessons or you know, what big takeaways do you have that would be valuable for everyone else?
26:25
I would just say, you know, so far so good.
26:27
As you mentioned, like we're, we're still relatively new to the, to these virtual accounts and we're, we're still learning, still finding new ways to, to bring, to, to utilize them with, with our business and, and be more effective in that.
26:45
But you know, the, the thing I would say is, you know, just come into it kind of with an open mind, explore, ask questions, you know, where, where could this help us operationally?
26:57
How could we improve our current processes if we were able to utilize something like this?
27:04
You know that there's a lot of new tools out there in all aspects of the work we're doing.
27:10
But this, this is a great new tool that you know, if you can figure out the right way to use it can certainly can certainly help you.
27:18
Awesome.
27:19
What I love about this conversation is it's bringing some of the theory to practice with a real, you know, tangible example here at Key, we've seen a lot of other similar organizations in healthcare, you know, be able to adopt this and move from patchwork visibility of their accounting practices or their reconciliation into a new model where a lot of the finance and accounting leaders finally get a single source of truth.
27:42
To be able to see all their cash positions in one single place, to be able to open and close those accounts and be able to see the benefits of increased liquidity there.
27:51
So with that, let's move over to the third pole of the day.
27:55
And our third pole question is going to be thinking about your own organization.
28:01
Which area would bring the greatest impact if it was improved at your healthcare organization?
28:07
So at your organization, what area would bring the greatest impact if it was improved at your organization?
28:14
Would it be the reduction of manual processes?
28:17
Would it be B strengthening oversights and controls, C improving audit readiness, or D gaining real time visibility in a cache?
28:28
So is it A reducing manual processes, B strengthening oversights and controls, C improving audit readiness or D gaining real time visibility in a cache?
28:40
So Amanda, which one would make the biggest difference for Select Health?
28:47
I I feel like I'm an account through and through, and reducing manual processes is just my favorite.
28:53
I like to automate things.
28:55
It makes me happy.
28:58
Automation certainly makes me happy as well.
29:00
I, I get that.
29:01
And 79% of the audience today agrees with you.
29:04
79% says that reducing manual processes would make the biggest impact for them at their organization, followed by gaining real time visibility into cash would be #2 and then improving audit readiness and then strengthening oversight and control.
29:21
So Mark, that goes back to the love hate relationship that we all have with controls.
29:26
Yeah, I mean, the, the nice thing about that, Benny, if I can is you know, you, you still have all those controls that you would expect and anticipate from a banking platform, which is which is really nice.
29:40
Sure.
29:41
Let's speak about that second answer though, 'cause we spoke to reducing manual processes for.
29:45
So the second biggest answer was gaining real time visibility into cash.
29:49
Can you speak to Mark or Amanda?
29:51
Does the virtual account management system assist with that in any way?
29:57
I mean, in our specific use case and what we're using it for, we're, we're not necessarily looking at it that way.
30:03
But I, I can certainly see, you know, if, if you're, you're a business with many different accounts, like a healthcare system with, you know, you got your cardiology and your very many various departments.
30:16
If you needed to keep those things separate, but also be able to, you know, keep the high level visibility, can certainly see how that would be a, a great benefit and a, a good way to utilize the, the virtual accounts to be able to, you know, still have that lower level granularity at the individual department level.
30:36
But then I'll also be able to roll it up and see it at a very high level and have a good understanding of your cash position.
30:44
Gotcha.
30:45
And that's very helpful.
30:46
Now, this may be an unfair question because I know both of you are from the accounting department, but I know we've got a lot of treasury folks, treasury management folks on the line with us today that are the HFMA members.
30:57
You know, can you tell me how your counterparts at select health and Treasury Management, you know, have they seen any, you know, benefits from you all adopting this system or, you know, has the way that you interact with your treasury management folks changed or evolved at all?
31:14
So, yeah, I, I guess, you know, the, the biggest thing would be when, when we open a new account, we're, we're running that through them, right?
31:22
So if, if we're creating a separate new bank account, we're working with them.
31:27
They're, you know, they're filling out the forms, working the process, getting all the approvals needed on that side and then taking that to the bank to then get the account set up with the, with the VAM account.
31:41
You know, we, we had to involve them with the initial creation of the VAM account from a control perspective.
31:47
But once we had the VAM account created and we can control the creation of the sub accounts, you know, basically just creating new buckets underneath, right?
31:58
We, we don't have to involve them every time we need to create a new sub account for our, for our own internal purposes, which, which has been great.
32:09
It, it saves a lot of time.
32:11
As Amanda mentioned a little earlier, it takes her about 5 minutes to create that account where where in the past we would have had to wait, you know, one to two weeks to get through all the the hoops to get a new separate account created.
32:26
So operationally for us, it saved it saved us a lot of time and you know, hopefully it's saved them a lot of time with have not having to help us as much with the account creation.
32:37
Got it.
32:38
Awesome.
32:38
Well, thank you guys for that transparency and that detailed case study.
32:42
So as we start to wrap up here and we start to recap, let's talk about what we what we've heard a little bit and what we're hoping that some of the HFMA members take away here.
32:53
So hopefully you all are asking or thinking to yourselves or asking, you know, is my organization ready for real time cash visibility?
33:01
Do I have the ability to to see cash visibility in real time as we saw it was a big, big concern from that previous poll question.
33:10
Hopefully you all are starting to think about opportunities inside your own organization where you may be having seen too many manual processes or may need to start cutting out some manual processes, and you're thinking about different ways where you may be able to do that.
33:24
Hopefully you're thinking about oversight and audit readiness and you know how you can strengthen your organization's ability to do that while also keeping your operations nimble.
33:34
And hopefully you're also thinking about your reconciliation processes.
33:38
What do you have to do on a daily basis?
33:39
What do you have to do on a monthly and quarterly basis when it comes to reconciliation?
33:43
How do you have to do that across, you know, the 10 accounts that you have or the hundreds of accounts and what solutions might make that more flexible or more simplified?
33:54
So, Mark, if you were talking to another healthcare leader, a healthcare finance leader, and they were curious, what would be the first step in answering one or all of those different questions?
34:05
What would you recommend to one of those other healthcare finance leaders on, you know, what is the right next step to do once you've decided you need to make a step in, in one of those directions?
34:16
Sure.
34:16
I mean, my, my first step would be, you know, go talk to your treasury team, start, start brainstorming with, with your treasury team, with your banking partner and have, have that conversation of, you know, I've, I've heard about this new tool and this is, you know, kind of high level what it could do.
34:34
But you know, how, how could something like that help us and, you know, kind of help us change how, how we operationalize our our business from a banking perspective?
34:46
I'd ask, I'd ask those questions, you know, and try, try to identify the pain points and those opportunities for improvement with, with them.
34:54
And, you know, just, yeah, just just partnership with them and brainstorm and figure out, you know, how best you could utilize a new product in your your given situation.
35:05
Sure.
35:06
And what would you say?
35:07
And I, I imagine you might have faced some of these questions internally at Select Health when you all were deciding to use virtual account management.
35:14
What would you say to some members of the organization that said we don't have time and energy right now to migrate systems or set up a new process?
35:23
You know, we're so entrenched in what we're doing right now, we don't have time to pivot and learn something new.
35:28
Get you know what, what it if you got any of those questions at select health, you know, how did you respond and and how would you respond to someone else that was facing a similar challenge?
35:38
Sure.
35:39
And you're, you're talking to some accountants and sometimes new isn't, isn't in our vocabulary.
35:44
We, we just do things the way we've always done them because that's how we do them and that's what we know.
35:49
But you know, I with a lot of the pressures, you know, having to do more with less, can you afford not to look at new opportunities to do things better?
36:00
In our specific use case like that, there was no way we could have operationalized our our new product without something like this BAM account doing it the old way wouldn't have worked.
36:13
And so, you know, if, if you're getting, you know, pushed back from, from leaders within your organization again, that with the, with the BAM account specifically like it, it's really straightforward.
36:26
It was relatively easy to, to implement once once we got there.
36:31
And yeah, it was, it was definitely worth it for us.
36:36
So I, I definitely encourage anybody who you know, can think of use cases or our interest is kind of piqued their interest into looking at these to, to look into it, push the envelope, try and try and do new things.
36:50
And you know, for for us, it worked out.
36:52
Hopefully it would work out for you as well.
36:54
Sure, thank you, very helpful.
36:56
So, Amanda, what questions should finance leaders be asking their treasury or accounting teams right now about their operations if they were looking to make things more efficient and considering, you know, a virtual account management or some other, you know, newer treasury management system?
37:12
What questions, you know, did you hear from your leadership and what questions do you think this leader should be asking as they start thinking about some of this?
37:20
Yeah.
37:20
I think like Mark said, just having the discussion of what is your biggest pain point?
37:28
How would a product like this solve some of our current operation problems?
37:33
And what are we doing now that we don't need to be doing?
37:38
We tend to, as accountants, say what we've been doing, we should just keep doing.
37:45
But sometimes we need to think outside the box and, you know, and have that discussion of is there a better way to do what we're doing?
37:54
What do we currently use multiple accounts for?
37:57
Is there a way to, you know, to make this more efficient?
38:03
Absolutely.
38:04
OK, very helpful.
38:05
Yeah.
38:05
I think what I'm hearing from both of you is sometimes it does take a mindset shift and even a cultural shift internally at the company to think about, hey, it's time to improve and time to do something different.
38:16
And while that can be challenging, there's a lot of benefits.
38:19
And I love what you said Mark was, you know, can you afford not to consult that are doing something else?
38:25
Sounds like what I also heard in there is that, you know, you also have to include some other of the teams and internally it's not just finance and accounting and treasury, but sounds like it's also IT, it's also operations, it's also risk and audit.
38:40
And bringing them all together is the opportunity to really identify the new opportunities and the new needs of the organization and to really get that momentum started on being able to implement something new.
38:51
We're definitely seeing that here at Key as we talk to other clients as well that need to have this cultural shift and bring a lot of different parties together to agree on the biggest priorities.
39:00
And then to re evaluate how do we dedicate resources to making sure that we can make these changes that are necessary.
39:07
So what you what you all have shared very much aligns with what we've seen from other healthcare providers as we talked to them on a daily basis.
39:15
So with that, let's go to our 4th and final poll question for the day.
39:20
And this one is, how prepared do you feel your organization is to adopt next generation treasury solutions?
39:27
So right in line with everything we were talking about, how prepared do you feel your organization is to adopt next generation treasury solutions?
39:35
A, not prepared and still focusing on basic treasury processes.
39:40
B, we're somewhat prepared, exploring but not ready to act C, prepared evaluating specific solutions now and D, we're already adopting and we're ahead of the curve.
39:52
Now Amanda, I know you all have already adopted virtual account management, but maybe let's talk about if there were another huge enhancement coming, how prepared would Select Health be in adopting that next Gen.
40:04
Treasury solution?
40:07
The way I've seen our higher ups work is I feel like we are willing.
40:14
They're willing to listen, they're willing to listen to what we have as a potential next step.
40:22
So I feel like they were there.
40:27
Fair enough.
40:27
And, and Mark, going back in time a little bit to when you presented virtual account management to your leadership, how well did you feel your organization was to adopting a next Gen.
40:36
solution?
40:38
You know, I, I felt we were pretty, pretty open to that, honestly.
40:42
And, you know, with, with the given situation we were in, it was kind of like, you know, we, we need to do this.
40:47
There is no other option.
40:49
So it, so in that way, you know, they were, they were very open to it.
40:52
We, we had to go through the process of, you know, fully vetting it, making sure we were compliant with various regulations and whatnot.
41:01
But once we made it through those things like it was the, the attitude was, you know, that of you know, this, this is the right course.
41:09
This is a a very good option for us And we've we really enjoyed it since we started.
41:15
Wow, I did not expect to hear that, but that's awesome.
41:20
All right.
41:20
And so the poll questions here from the from the audience.
41:23
So we've got 49% say somewhat prepared, we're exploring new opportunities, but we're not quite ready to act.
41:30
So it sounds like you know, a lot of people are in that place where we know we we need to definitely explore potentially we've got some some heavy needs here that we need to tackle, but not ready to pull the trigger just yet.
41:42
And then with the next group, 31%, which is encouraging saying that they are prepared and evaluating specific solutions already.
41:50
And then 10% saying already adopting and ahead of the curve.
41:54
And I'm sure some of the AI trends over the last few months and are leading to that as well.
42:00
So yeah, a lot of companies are more prepared and evaluating and and and adopting new treasury management solutions already.
42:06
So that's awesome.
42:07
OK, so let's move now to Q&A.
42:10
And Ashley, if there are any questions that are from the panelists, if you could read those off and we'll tackle them.
42:17
Sure.
42:18
Firstly, I want to thank you all for this really informative presentation.
42:21
And I'd also like to invite everyone else to answer your questions in the Q&A box at this time.
42:27
So the first question we have says what are the internal control considerations and mechanisms for virtual accounts?
42:33
How do auditors feel about the use of virtual accounts?
42:39
Mark, do you want to start?
42:40
And then I can speak from a, from a bank perspective.
42:44
Sure.
42:45
Certainly again, like like I said earlier, we, we still have all the same controls that we would have on any of our, our other accounts with, you know, with the exception of what we're able to create accounts or, or buckets, I guess within the the overarching parent account, which you know, speeds up that, that operational efficiency.
43:10
But the, all the, all the important controls you would expect on a bank account are, are still there as far as you know, what an auditor would think of this.
43:20
Again, the, the accounts are underneath the parent account, but they're also separate.
43:29
Meaning like if I, if I just want to run a reconciliation or see all the detail on my one bucket account that I created, I can do that.
43:38
It's all, it's all separate.
43:39
It's all tracked individually at that sub account level, but then just, you know, rolls up to the parent account.
43:47
So, so you have all the detail needed to be able to have that that visibility and that transparency at that sub account level, which which is really great.
44:00
It's basically like having, you know, its own separate account without having its own separate account.
44:08
The best of both worlds there.
44:09
Yeah.
44:09
So, you know, from a product design perspective, we make sure that, you know, as we use virtual accounts here at Key, that we allow clients to have segregation of duties as far as how they interact with the virtual account management system, which is a huge control where the clients can assign different user role functions and permissions to different people within their organization as they interact with it.
44:33
And what that means is that you can establish some personnel who have access to only view the data and accounts, but not create new ones or not move money.
44:42
And then you can have a different permission where they're allowed to create new bank accounts but can't close them.
44:47
And vice versa.
44:49
You can also then have different permissions for clients to be or for individual users to be able to move money and can't do anything else.
44:57
And then you can also give your auditors their own roles.
44:59
That is just view only access to all of the transaction history and user logins so that they can do their audits directly within the platform.
45:08
So we believe there's a robust set of controls that allow the audit teams to get very comfortable with the new technology.
45:17
Thank you both.
45:18
Does a virtual account have all of the same functionality as a regular DDA account?
45:25
And again, Mark, if you want to start or or I can speak from a product perspective, Do you do you want to take that one Benny?
45:32
Sure.
45:33
Yeah.
45:33
So we So what we established with virtual accounts is the ability to self open and close it also to get all the reporting that you would need in a variety of different methods.
45:46
So all the normal, you know, types of ways that you would download statements or extract data, be able to get all the remittance data on each individual payment.
45:55
All of that is still available as well as all the money movement capabilities.
45:59
So at KeyBank, we enable ACH, wire, RTP payments, all to be done into and out of the virtual accounts the same way you would out of a traditional bank account.
46:15
This question says if we are just starting to explore virtual accounts, what best best practices or lessons learned would you recommend that we keep in mind?
46:23
Sure, I'll direct that one to Amanda.
46:26
I know Mark already gave some of his lessons learned and Amanda, if you you know what would you share with the with the person that asked that question, I would definitely leverage your automation and we connected our virtual account to our ERP and that maximizes our efficiency and also expect a little bit of a learning curve.
46:50
While it is simpler to manage this versus the dozen of physical accounts, it still does require planning and training.
47:00
Also like I think you think long term the biggest payoff isn't just the faster reconciliations, but the strategic visibility that it offers.
47:12
Thank you.
47:13
Amanda, can you tell me a little bit more about which processes you were able to automate like first and and what kind of impact it had?
47:21
Honestly, the the fastest is just our reconciliation process because of the ability like I said to have those memos or notes.
47:33
It has allowed us to kind of automate how we do the reconciliation at the end.
47:41
Thank you.
47:42
This question says do virtual accounts work for incoming and or outgoing paper payments for example checks?
47:50
Sure.
47:50
So today we do allow incoming payments that are paper based that go into, as Mark described, the parent account account or the omnibus account that stays at the top.
48:04
Paper payments can come in there.
48:07
And then we give clients the ability to then route those two individual sub ledgers or sub accounts as they see fit.
48:14
We're working on some road map enhancements here at Key where check payments as well as cash deposit at the branch ultimately can be routed automatically to a sub account.
48:24
But today it's just a quick manual step to be able to move those funds over.
48:28
So yes, any payment that can happen at a regular bank account can happen to a sub account with just a little bit of additional steps.
48:36
But all digital payments like ACH, wire, and RTP are automatically routed into or out of the sub accounts today.
48:45
Can you explain a little bit about how that works for a multiple legal entity structure?
48:50
Sure.
48:50
So the virtual account management structure is flexible to support single legal entity or multi legal entity.
48:58
So we do allow, we have some clients that have, you know, a single link, a single legal entity that is the parent and all the Subs underneath that are tied to it or some similar to Select Health.
49:09
Select Health has one legal entity at the top for the parent accounts, but their sub accounts are all representative of their clients, which are all different legal entities than Select Health themselves.
49:21
So what they do is they're still able to open a sub account in the name of their client, but the funds are held at Select Health.
49:29
And so that's a different legal entity and those funds that they're holding on behalf of their client roll up to that parent account So they can see the sum of all the funds that they're holding across all their clients and all those different legal entities held in their FBO or for benefit of DDA that they have at the parent account level.
49:47
So yes, we've got clients that are even within their own organization have multiple different legal entities within their own organization and they're holding different funds for their East region versus their W region, which may have different legal entities under the same parent account.
50:02
And then similar, if the up it's a hospital that's got a different EIN number for the, for the cardiology department versus Pediatrics, they can still hold those in virtual accounts and still have it roll up to 1 master parent account.
50:18
Thank you.
50:18
I think that answers this question.
50:20
Or maybe you can elaborate more about how can you open your own account?
50:25
Sure.
50:26
Opening your own, well, opening the own parent account is the same way that we do with traditional bank, corporate bank accounts today.
50:33
So you would still work with your traditional business banking or corporate banking partner to open the master account and then after that it's a complete self-serve process to then open the sub accounts underneath it a key.
50:46
The way we do it is, you know, we've got our online banking tool called Key Navigator.
50:50
Within there there's a quick drop down where you select I want to go to my virtual account management system.
50:56
Once you click on that, it's going to open a new window for you and there's a button right at the top right that says new sub account.
51:03
You click that button and and enter in a couple pieces of demographic information, the name that you want listed on it, the address information, if it is a different legal entity that that different legal entity's address, and then any beneficial owner information, if the beneficial owners are different than the parent account.
51:23
And you click submit and it's and then instantly you'll get a new bank account number for that sub account that is instantly routable for payments inside and out.
51:32
So as Amanda mentioned multiple times, the entire process of opening a new account takes less than 5 minutes.
51:39
Sounds pretty easy, this question says.
51:42
How does virtual account management strengthen audit readiness and compliance in a highly regulated healthcare environment?
51:50
Sure.
51:51
So I'll talk about the ability first to keep funds segregated, which is a big factor, especially in healthcare insurance and a lot of other healthcare subdivisions as well.
52:01
So being able to keep all those funds segregated, but while reducing the overhead complexity is a huge factor.
52:08
Then you've got the full audit histories and transaction histories that are available and accessible in easy to to view manner.
52:16
So you can log into the user interface and see any transaction histories that you need need.
52:21
You can also download and export all of the history, any methods that you need to an Excel, CSV, etcetera, to be able to export to some other system or tool or be able to share with the regulator or auditor.
52:35
And then I mentioned the different user roles, so being able to segregate sort of segregation of duties between people that, you know, create accounts and then the people that move money so that you've got audit trails there.
52:47
And then being able to give your auditors access to the tool itself to be able to have view only access so that they can see all of the transaction history and do any oversight that is necessary.
52:57
All of that is available.
53:00
Thank you, Alex.
53:02
Yeah, I have any more questions for organizations with decentralized operations, which strategies work best for integrating virtual accounts into existing infrastructures without major disruption?
53:15
Sure.
53:16
I love what Amanda said about, you know, just training and being prepared for, you know, just a transition.
53:23
One of the things that we always offer is detailed complimentary training to our clients, teams and operators and anyone that's going to be logging into the tool on a regular basis.
53:33
While we do have, you know, user guides and all that, we set up virtual trainings at the start of their implementation to walk them all through.
53:42
How do you create a virtual account?
53:44
We do the first couple together.
53:45
How do you move money?
53:46
We do it together.
53:47
And so we set up virtual trainings that are available as often as our clients need to walk them through all of the different operations.
53:55
You know, with great solutions like Zoom and Teams, a lot of that getting decentralized organizations together on on a training or multiple trainings is not too hard.
54:04
And then circulating best practices and circulating those user guides and written documents and FAQs that we have so that they can all see it.
54:12
And I would also say it, it trip typically starts though with the strategic conversation.
54:17
What are we trying to accomplish and why?
54:19
What are the benefits that we plan to that we plan to gain from this?
54:23
And if you had that conversation from a strategy perspective with all of those disparate team members that I mentioned, so not just finance, not just accounting, but also IT also your operations, also your audit team.
54:35
And once they're all aligned, hey, this is the benefit that we're going to get and it's easy that the implementation and the operational lift goes a lot smoother once everyone is aligned that this is the right objective for us to achieve some, some short term and long term goals.
54:51
Thank you, Ben.
54:52
Oh, I'm sorry, go ahead, Mark.
54:54
Sorry, I was just going to just going to say, you know, as we work to implement, you know, and, and learn the, the new virtual account management system that there was a lot of hand holding, a lot of support from our banking partner in getting through that, which, which made that transition and that understanding go, go a lot smoother.
55:15
So it's very helpful to to utilize them and making sure you understand what you're, what you're doing and how to use it.
55:23
They're very supportive there.
55:25
Just wanted to mention that.
55:29
Thanks, Mark, do any of you have any closing remarks?
55:36
I guess, you know, for me, I just again reiterate that, you know, if this is something you're, you're interested in, it's, it's definitely worth the discussion.
55:45
Reach out to your, to your treasury partners, reach out to your leadership, Let them know about this new idea and how, how you think it could be a benefit to, to you and your organization and your, your operations.
55:58
I, I know for us it, it was certainly a, a big win and a, a very helpful tool for us to, to manage our ever growing portfolio business.
56:09
Sure, Mark, you said that very well.
56:12
And you know, a lot of what I'm going to say is just recapping what you spoke about for the, and Amanda for the last hour.
56:17
But you know, I'm left with three main takeaways in my head #1 efficiency and visibility go hand in hand.
56:24
And modern treasury requires both of those to be able to operate it, you know, at top levels #2 virtual account management technology and sub accounting technology is helping healthcare organizations take control of cash today in ways the traditional tools can't.
56:40
So it's real.
56:41
And the number three goes right along with that is that, you know, early adopters like Select Health are proving that it isn't theory, it's practical, it's achievable, and it is delivering results today to adopt some of this technology.
56:53
So be bold.
56:54
Let's get, you know, have those conversations with the right people to talk about the goals that you want to achieve and then talk to your Treasury representative about, you know, what that next step is.
57:07
So, well, thank you everyone for joining today.
57:10
On behalf of HFMA Select Health, Amanda and Mark, thank you again for your time and all of us here at KeyBank, we thank you all for joining us today.
57:17
We hope this session has been valuable and we look forward to connecting with you again soon.
57:22
And with that, we have reached the conclusion of today's webinar.
57:25
I would like to thank our speakers for presenting and KeyBank for sponsoring.
57:29
We hope that you found the presentation informative.
57:31
Thank you for your participation and have a great day.
Healthcare finance leaders are facing a familiar but growing challenge: doing more with less. Rising complexity across multiple business lines makes it difficult to maintain liquidity, transparency, and control in real time. In this webinar with the Healthcare Financial Management Association (HFMA), KeyBank and Select Health, a healthcare insurance organization, explore how innovative treasury structures, like virtual account management, are helping organizations simplify operations and gain visibility over their cash positions.
Listen in as Bennie Pennington, SVP of Embedded Banking at KeyBank, discusses how healthcare organizations can modernize treasury operations without sacrificing oversight with Select Health.
Key Takeaways
- See your cash clearly. Real-time visibility enables faster decision-making and stronger financial control.
- Automate to elevate. Reducing manual reconciliation frees up staff to focus on strategic work.
- Balance oversight and agility. Enhanced controls don’t have to slow down operations.
- Stay audit ready. Virtual sub-account structures simplify reconciliation and strengthen compliance readiness.
With a focus on understanding the unique dynamics of healthcare and middle market businesses, KeyBank can help you navigate challenges and seize new opportunities with confidence. Our relationship-driven approach means that as the demands shift, we stay focused on your success — not just for today, but for years to come.
To see how we can help you reach your goals, contact us or visit key.com/commercial.