Top 5 U.S. Home Healthcare Provider – DSO Reduction

REDUCE ADJUSTMENTS, WRITE-OFFS AND COLLECTION TIME for accounts receivables across 350 U.S. offices for this medical equipment company with $1.2 billion in annual revenue

Project Focus

• Medical Equipment Supplier’s Patient Intake, Accounts Receivables and Collections departments
• Assess revenue management operations, from intake through billing and collections, at representative locations
• Identify collection performance barriers and opportunities
• Design a high-performance revenue management model
• Plan for and facilitate company-wide implementation

Client Gains: Financial and Operating Benefits

At four months following implementation:

• 64% reduction in revenue adjustments
• Cut suspended billing (>60 days as % of net revenue) by more than half
• 42% decrease in accounts receivable >180 days
• Reduced days sales outstanding (DSO) by 25%; four years later, original DSO >100 days had improved by another 25% for a total reduction of 50%
• 25% improvement in productivity

Key Changes that Supported Client Goals

• Refined revenue management and collections models and training program for immediate performance improvement
• Used principles-based approach to operations model design, to achieve implementation success across the company’s diverse business environments and systems
• Built culture of “turn-around” versus “deadline,” focused on avoiding backlogs and deterioration of accounts receivables – supported by quality reviews at key points to minimize delays and write-offs, and by positioning and training supervisors
• Incorporated continuous process review and measurement reports to achieve ongoing improvements in revenue management, service, quality, and productivity
• Tested the new model for validity in the poorest performing region – which then advanced to the 2^nd best revenue management performance of 23 regions in just two months
• Identified and implemented new model in the regions contributing 75% of the revenue adjustments and write-offs
• Trained and coached 20 employees as change agents to implement the new model and perpetuate improvements throughout the remaining regions

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