Glynda McDaniel (L) of Ardent Health Services & Janice Walsh (R) of Trinity Health reduced payment cycle costs.
Finding savings & incentives with HealthTrust Treasury Solutions
Healthcare organizations across the country have been challenged to reduce costs and increase financial resiliency, amid higher labor expenses and lower patient volumes. HealthTrust’s Treasury Solutions are designed to help members address some of their cost and efficiency challenges. By partnering with industry-leading third-party providers, participating members can reduce labor and administrative cost of the overall payment cycle. Janice Walsh, Finance Director at Trinity Health, and Glynda McDaniel, Director of Treasury Operations at Ardent Health Services, saw the advantages of partnering with HealthTrust.
How the program works
“The Treasury Solutions program is a way to reduce what it costs to pay suppliers to receive their payments. As health systems have been challenged with reductions in labor and doing more with less, these solutions help support initiatives to take the workload off burdened staff and transition it over to third-party platforms,” says Kim Allen, AVP, Strategic Sourcing Commercial Products, HealthTrust.
HealthTrust’s accounts payable programs focus on eliminating payments by checks so members can automate the payment process to suppliers using credit cards and/or a third-party ACH (Automated Clearing House) platform. This reduces costs and fraud risk associated with checks, with the added bonus of receiving a financial incentive from payment providers. “By changing from a check or EFT payment that costs money, members are actually earning money when making payments through this program,” explains Allen. The payment providers take on the risk and liability tied to the payments by assuming the responsibility for maintaining the supplier banking records.
The accounts receivable program offers members a single-source merchant-acquiring solution for receiving all forms of payments such as online patient payments and payments in cafeterias, gift shops, physician offices and others, with rates that are significantly below market. The merchant-acquiring service provider also works with each member to ensure all payments are payment card industry (PCI) compliant, protecting hospitals’ reputations in the event of data breaches, as well as minimizing financial risk.
A competitive payment space
Trinity Health, one of the country’s largest not-for-profit Catholic healthcare systems, has been a part of HealthTrust’s accounts payable recovery program for years. Most recently, attracted to the beneficial terms made possible by HealthTrust’s group buying power, it also joined HealthTrust’s Expense Management and Payment Solutions Credit and ACH programs after years of managing those contracts in-house.
“The business-to-business payment space has gotten a lot more competitive, and it made sense to not stand alone but instead have the weight of comparable buyers processing similar types of payments grouped together. It’s all of us banding together and providing a united front so that we can get more value for our companies,” says Walsh. She also shares that the HealthTrust contracts have better rates and additional support services than the previous contracts they’d negotiated on their own.
In 2022, Ardent Health Services decided to utilize the Treasury Solutions program, moving its existing American Express contract to HealthTrust and implementing the Expense Management and Payment Solutions – ACH program for the first time. “COVID really opened our eyes to the need for electronic transactions. People were not in the office to receive their mail or their checks. There was a big ask from our vendor network for ACH transactions,” says McDaniel. Delays with the U.S. Postal Service and a high increase in check fraud also influenced the decision to move to electronic payments.
Onboarding with Treasury Solutions
Although members can pick and choose which Treasury Solutions programs to adopt, Rob Dickey, Senior Director of Contracts, Indirect and Treasury Solutions with HealthTrust, says the most successful members embrace them all: “We offer a full end-to-end solution that manages inbound and outbound payments. Let’s say members want to increase efficiency in their AP department and don’t want to maintain bank records. It’s advantageous for them to use the HealthTrust program and transition the overhead cost and fraud risk associated with processing checks and locally managed electronic funds transfers to a third party. And, if members are looking for speed to value, our program gives them the opportunity to increase their financial incentive using pre-negotiated agreements that are an improvement over what they can get on their own local deals because of the aggregated HealthTrust volume.”
Getting up and running with Treasury Solutions depends on the program, but overall, it’s an easy process. For credit and ACH, it’s a simple matter of executing a pre-negotiated agreement with one or all three providers. If there are existing contracts that need to be transitioned to the HealthTrust program, the HealthTrust Treasury Solution suppliers will manage the transition on behalf of the members.
“All of the work it takes to launch any of the HealthTrust Treasury Solutions is done by the third-party platforms. They work hand in hand with members on messaging and then do the heavy lifting with onboarding the suppliers and growing the program,” adds Allen.
That’s been Ardent’s experience since it joined HealthTrust’s ACH program with the Fifth Third Bank/Paymode-X network last year. They provide Fifth Third Bank/Paymode-X with data on vendors paid by check and those they want to prioritize, and Fifth Third Bank/Paymode-X takes it from there. “Every Friday we get an updated listing from Paymode-X of the successes for the week,” says McDaniel. “We go into our AP system and update the vendor information, and then payments to that specific vendor go through Paymode-X. It’s one less check we have to write.”
For incoming payments, HealthTrust has an agreement with the global financial technology payments company Fiserv, which requires ending any existing agreements first. The Fiserv consulting team works with our members to create a transition plan to the HealthTrust Fiserv agreement and outlines a clear plan to achieve PCI compliance at no cost, which can be especially beneficial to members that, through mergers and acquisitions, have contracts with multiple providers. “When there are disjointed relationships with multiple suppliers it is next to impossible to be PCI compliant. Consolidating with our program will ensure the healthcare organization is PCI compliant once the transition is complete,” adds Dickey.
The driving force
In 2018, treasury experts from HealthTrust member hospitals came together to form HealthTrust’s Treasury Advisory Committee (TAC). “The committee members are representative of the HealthTrust membership and are the ones on the front lines managing this in their hospitals on a day-to-day basis. This ensures that what we work on within the committee will deliver benefits across HealthTrust’s member organizations,” says Dickey.
Since the TAC’s first meeting in 2018, Treasury Solutions has expanded from the original program, comprising just two agreements, to a much more comprehensive offering. Allen credits committee members with this impressive progress: “The driving force behind HealthTrust’s program is the Treasury Advisory Committee. These members have supported the conversations and have guided us. Each of them has played a crucial role in the development of this as an overall solution.”
Walsh has been a member of the TAC since it started. It’s been a rewarding experience, she shares, and she appreciates being able to discuss the challenges she’s facing in her work with the Treasury team and senior HealthTrust leaders. “They’ve really listened to us and to our perspective.” An example: HealthTrust’s move to include standard electronic payment language in agreements with suppliers. “This idea emanated from one of the early meetings we had. I’m very appreciative they listened and figured out how they could address our issues by embedding related language into the contracting process,” she says.
Walsh also appreciates the relationships she’s built with other committee members. “When you’re in this space, you have very unique conversations with suppliers. To be able to bounce ideas off of other like-minded peers who are facing some of the same challenges has been part of the value of this committee,” she adds.
McDaniel, who joined the TAC in early 2023, agrees with this sentiment. She’s excited to be part of the committee to communicate with her treasury peers and work together to create solutions for mutual benefit. “We all tend to have similar issues within our organizations from a payment perspective or a treasury services perspective,” she says. “Together, we’re looking at processes and challenges that are important to members that Kim and the team at HealthTrust can then explore and find solutions to address. This will help the treasury teams within each of our health systems to run better, creating more value for all of us.”
Explore how savings and incentives from payment solutions can benefit your organization by contacting firstname.lastname@example.org or your HealthTrust Account Director.Share Email Finance, Operations, Q2 2023, Savings, Treasury Solutions