Healthcare System Automates AP

By Mark Brousseau

Catholic Healthcare West (CHW) has improved the productivity of its invoice processing by 12 percent by implementing a data capture solution from Kofax, Beverly A. Carling, manager, accounts payable at CHW, said yesterday at Transform 2009, the Kofax Annual Conference, held October 21-22 at the Manchester Grand Hyatt, in San Diego. What’s more, Carling expects productivity to climb further as the organization becomes more experienced with the automated invoice technology. “We are projecting a productivity gain of 25 percent in 2010 compared to 2008,” Carling told attendees.

With the Kofax solution, CHW’s validators can now process 2,100 invoices per day, Carling said. “That’s a lot of transactions,” she said, adding that the organization now has an average of 1-2 days of unprocessed invoices in the queue – far below industry average for AP departments.

CHW is a healthcare system comprised of 41 acute care hospitals and approximately 20 health-related affiliated corporations located in California, Arizona and Nevada.

CHW implemented Kofax Advanced Data Capture earlier this year. It also uses ProcessFlow to manage AP work queues. The implementation of the Kofax technology came as CHW was consolidating its 30 invoice processing facilities, which processed about 1.6 million invoices a year (about a third of which are handled electronically), into two centers located in Sacramento and Phoenix. At the end of the transition, CHW’s invoice volume rose to 1.7 million invoices annually.

“Our goal was to build an AP center of excellence,” Carling said.

The Kofax solution is delivering data capture read accuracy of 80 to 85 percent, Carling explained. “We’re still experiencing some false positives, but we have an action plan in place to address that,” Carling said. “I’m expecting that we’re going to see results of 95 percent.” To eliminate some manual processes, CHW has 75 different AP companies set up in its system – providing the ability to read the name on an invoice and convert it into an AP number. About 65 percent of CHW’s total invoice volume is processed through data capture. “Data capture has helped us standardize what we are putting into the system and reduce the number of manual errors that we may have.” Carling said.

CHW’s results are even more impressive when you consider the complexity of invoice processing. The organization has tens of thousands of vendors, Carling said, and there is no standard of how vendors present the data. “And we don’t really have any leverage to dictate how data is presented.”

But the results are impressive. And additional savings may lie ahead.

“We haven’t been on data capture very long,” Carling said. “We continue to do issues tracking, mostly on the false positive side, and look for ways to improve the quality of the data capture.”