HCR ManorCare

Advancing digital transformation with invoice automation

Industry:

Healthcare

Regions:

North America

Solutions:

AP Automation, E-Invoice Receiving

Advancing digital transformation with invoice automation with Basware

A longstanding customer with Basware HCR ManorCare transformed from Basware’s on-premise solution to Basware AP Automation. HCR ManorCare has embarked on a transformation from an entirely manual and paper-based world to a streamlined and automated future. On that journey, they have unlocked significant cost savings and productivity gains.

HCR ManorCare, a network of assisted living communities and skilled nursing locations with over 500 locations, has been automating its Accounts Payable (AP) process with Basware for over a decade.

HCR ManorCare realizes digital transformation and longer-term excellence in business services depend on building a solid foundation of information, automation and connectivity throughout purchase-to-pay. Dave Danko, Business Solutions Product Manager, HCR ManorCare.

In 2016, HCR ManorCare recognized that its overall IT infrastructure was reaching capacity with its on-premise Basware solution. Every time an update was needed, there was significant disruption. It was clear a digital transformation was required with the technology powering the organisation's procurement.

Key takeaways

72%

e-invoicing rate

34

FTE Productivity Gain

$2M

Reduction in over-payments

HCR ManorCare's Challenges

The new system had to handle the unique aspects of processing medical invoices, where no two medical providers submit in the same format. This also had to happen at high volumes. HCR ManorCare had over 21,000, primarily local, suppliers sending invoices directly to the 500 individual facilities.

Additionally, a new solution was needed to reduce the significant amount of paper-based invoices received. AP resource was too focused on keying in invoices, preparing documents, and filing. Beyond high processing costs, service quality often suffered, with duplicate payments, late payments, and payment errors.

Finally, there was resistance across parts of the organisation in transforming to a new solution. There wasn’t a strong understanding of the benefits moving to a cloud solution would bring.

HCR ManorCares Digital Transformation with Basware's Invoice Automation in the Cloud

Where there was support for the transformation was in the HCR ManorCare’s IT department. They viewed moving to Basware’s cloud platform as an obvious choice. Eliminating database administration-related storage requirements and allowing more frequent, less disruptive updates was an immediate win.

Working with Basware’s consultants, HCR ManorCare designed their new solution in only three months and then fully rolled it out in under six months.

Basware offered the flexibility needed to transform our AP team. Dave Danko, Business Solutions Product Manager, HCR ManorCare

A supplier enablement campaign was launched to reduce the volume of paper-based invoices. Suppliers were shifted from mailing paper invoices to decentralised facilities to a centralised Basware scan and capture center and offered an e-invoicing solution, P-cards were also rolled out for low-dollar items.

Basware ran a campaign to increase understanding of the new solution within HCR ManorCare and help drive product adoption. This started with presenting to key stakeholders the main features, anticipated productivity gains, and cost savings. For the wider organisation, an online university was launched to teach users how the solution would simplify their day-to-day tasks.

Basware fundamentally changed AP’s role. The AP organization, which shrank over time from 38 to 4 people, now focuses on exceptions. Account recovery audits were finding nearly $2 million per year in duplicate invoices and overpayments errors – recoveries have been reduced to occasional exceptions. Today, most invoices are processed on the same day they are received

Dave Danko, Business Solutions Product Manager, HCR ManorCare

Results

The initial adoption of AP automation addressed fundamental problems of high costs and high error rates. HCR ManorCare has seen a reduction in invoice cycle times and improved on-time payments. In parallel, they have reduced the overall volume of invoices with a better-quality process that eliminated duplicate invoices.

These improvements in invoice handling proved a strong incentive for suppliers to get on board with the new centralised system and move to fully digital invoicing. At the start, about 20% of invoices were sent electronically; with the supplier enablement campaign, this number increased to 72% of invoices.

The net result is that invoices are now processed the same day they are received, and with increased spend visibility, $2m in over-payments made annually have been removed entirely.

There has also been a significant productivity gain with the AP team reducing from 38 down to 4 people. Audit selections are automated so fraud and error reduction can concentrate on select criteria or random samples. The level of control and reduction in process costs are incontestable.