When a healthcare provider faced increasing difficulties in managing its 30, 60, and 90 day categories of accounts receivables, we stepped in to implement a sophisticated collection system.
CHALLENGE
A medium-sized healthcare provider was facing increasing difficulties in managing its accounts receivables, particularly in the 30, 60, and 90 days categories. The inefficient collection process led to a high percentage of overdue payments, impacting the provider’s cash flow and financial stability. Specific challenges included:
- High Days Sales Outstanding, “DSO”, with significant receivables extending beyond 90 days
- Inconsistent follow-up on overdue accounts
- Lack of a systematic approach to prioritize and manage collections
APPROACH
s2h implemented the D2R-Collect system, a sophisticated AR collection system designed to streamline and optimize the collection process:
- Segmented Collection Strategy: Deployed a tiered collection approach to categorize receivables into 30, 60, and 90 days buckets for targeted follow-ups
- Automated Reminder System: Introduced automation to send timely reminders to patients and insurance companies before the due date and at intervals if payments were missed
- Data-Driven Prioritization: Utilized analytics to prioritize high-value or high-risk accounts, ensuring that efforts were concentrated where they could have the most significant impact
RESULT
- Reduction in DSO: The implementation of D2R-Collect led to a 40% reduction in DSO, significantly decreasing the number of accounts exceeding 90 days
- Increased Collection Rates: Collections within the 30-day period improved by 50%, with overall recovery rates increasing by 30%
- Enhanced Cash Flow: Improved collection efficiency resulted in a 25% increase in cash flow, enabling better financial planning and reinvestment in core services
The introduction of the D2R-Collect system transformed the healthcare provider’s accounts receivable process, turning a complex, ineffective task into a streamlined, efficient operation.