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Accounting Practices Used by California Sutter Health

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There were positive results that were achieved especially within the first three months of this particular project where it has been observed that the institution managed to reduce account receivable (A/R days) from 65 to 59 for the total of nine hospitals in the region. Each day amounted to $13 million and this translated into meaning that an additional $78 million was collected through the effective implementation of this particular strategy. The strategy of reducing the A/R days empowered the staff to gain responsibility for their operations which enabled them to put an optimum effort in their performance.

The improvement of the performance of the members of the staff bore testimony to the effect that the strategy implemented by the organization was effective. California Sutter Health mainly used the registration, back-end- the central business office and collectors and front-end staff to define and solve its collection problems. Prior to their admission, the patients would first approach the back-end staff in order to register for their services where the payments would also be made. However, this accounting practice had its own limitations with regards to cash collection and there has been a move to turn around this system.

Cash collection often took a long period given that the managers and staff had to wait for the end of the month to generate reports that were vital in the accounting system of the hospital. In order to increase the cash collection, the new accounting approach by this organization vests responsibility in the PFS staff members in dealing with various accounts in a customized way where progress can be traced towards the attainment of an individual as well as team targets.

Automating the accounting system is a strategy that is used by Sutter Health where different accounts are arranged according to their order of priority. This strategy is very effective in that cash collection is made relatively faster and it enables the staff to identify any problems that can be encountered in their operations.

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