An examination of BJC HealthCare's deployment of an innovative virtual centralised self-pay business office

Abstract

BJC HealthCare, a network of 12 hospitals in Missouri and southern Illinois, in 2011, moved to a virtual self-pay, centralised business office operating model. The approach was an innovative departure from the legacy operating model using localised hospital business offices and locally managed self-pay outsource operations. Self-pay includes revenue from uninsured patients and revenue from insured patients with balance after responsibility, often called BAI. Through the use of web-based technology, the programme complemented a corporate effort establishing a central business office and enterprise-standard revenue cycle system. In the years following the eight-month rollout, BJC has realised more than US$17m in annual improvements in self-pay collection, 48 per cent yield increase and 11 per cent reduction in vendor fees. Self-pay cost to collect has fallen 18 per cent through a combination of lower vendor contingency rates and pulling cash forward into less expensive collection stages. Vendor management in healthcare is more complex than simply rate negotiation and invoice audits. More revenue is being worked by third-party vendors than at any time in history, which represents more cash flow and, more importantly, a hospital's long-term patient relationships. Patient relationships, in light of risk-based reimbursements, are strategic assets to be nurtured at every engagement over time. Traditional approaches to vendor management fail to meet today's and tomorrow's burden, given technical limitations within patient accounting systems.