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), Concentra had an AP process that 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 core issue was that a large percentage of invoices were sent directly to the medical centers (308 in total) where the operations directors at these centers would have to open the invoices, stamp and code them, and then approve them with a signature. Then, on an irregular basis, the centers would overnight a collection of recentinvoices to the centralized AP department, which would then manually key them into Concentra’s Oracle back-end and schedule them for payment.
This was, of course, a very inefficient process. In fact, out of the 21 person AP department, only two staffers 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. Another big issue was that many invoices never got to AP in the first place, which then required AP to call many vendors every month for copies of their submitted invoices. All of this really affected the accruals process at the close of a period – where some numbers were “guesstimates” rather than ones based on actual data.
The Solution
The issues above snow-balled – operations directors at the centers were spending too much time on invoice processing, AP was often removed and ineffective, 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 that Concentra entered the urgent care business, it launched a huge company-wide customer services initiative. One of the initiative’s top goals was to figure out how the operations directors at each center could focus more on patient care instead of administrative issues. And, it was this focus on the patient care that ultimately became one of the main reasons why the ePayables project was ultimately approved. 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’s approval process).
After reviewing the offerings of approximately 10 different solution providers, Kurt and his team narrowed it down to a short list. The team then 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 or not. As they progressed, they quickly realized that there were providers that specialized in this that could do so more efficiently and effectively. In its final analysis, Concentra selected BancTec, a provider that combined an outsourced service with an AP approval workflow tool. The plan was for BancTec to receive Concentra’s invoices via a centralized P.O. Box; then, 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 been using the BancTec solution for approximately 3 years and has seen many benefits:
- The majority of invoices now go to a centralized P.O. Box instead of individual care centers. As a result, invoices are typically logged in the system within 5 days instead of the 15-20 days it took in the past
- The amount of time that operations directors have to spend approving invoices was dramatically reduced, leaving more time to focus on patients. The benefit is estimated to be a 50% efficiency gain for the directors working with invoices
- AP staff was reduced by 6 people
- The accruals process is significantly improved with much greater accuracy due to invoices getting in the system much sooner
- Routing and approval improvements: Almost two-thirds of Concentra’s invoices are not complex and are automatically routed directly to the proper approver. The more complex invoices go through an audit step first within AP that is determined based on invoice-specific info like the vendor, type of invoice, category, etc
- Paper invoice storage with Iron Mountain was no longer required once BancTec was deployed
