Memorial Healthcare System, located in Hollywood, Florida, has selected IBM’s Big Data analytics and Smarter Content management capabilities to help prevent fraud, increase vendor transparency and reduce costs across its extensive third-party vendor network.
With its new vendor vetting system, the healthcare system not only minimises the potential for fraud, but also reduces vendor invoice cycles by better understanding its vendor community and identifying potential conflicts of interest.
This vendor vetting system, which is also known as VETTED, was developed based on Memorial Healthcare System’s current enterprise content management platform from IBM and business partner Information Management Consultants (IMC).
By adding IBM i2 analytics capabilities, Memorial Healthcare now has greater visibility into vendor business activities and the system’s process automation enables staff members to complete vetting activities within a few hours.
The system’s analytics connect the dots among vendor companies and between individuals, vendor companies and physicians to help uncover such unethical activities as bid rigging.
Memorial Healthcare manages approximately 6,000 vendors and processes about 300,000 invoices annually.
These vendors provide products and services such as facilities management, construction, lab testing and related capital equipment, specialised nursing care, and janitorial work.
The vendor vetting system gathers information from the Memorial content management system, cross-references it against 800 internal and external databases, and analyses the resulting data sets to provide previously inaccessible insights into the vendor community.
In one case, the analytics revealed that three vendors were colluding to price rig a proposal.
Memorial Healthcare System vice president of finance David Alexander said that as the healthcare system gained transparency into the vendor vetting process, the staff moved from a clerical role to an analytical role.
"We now have a fraud management platform across the entire hospital network that reduces risk and enterprise content management simultaneously speeds up invoice processing saving millions in the process," Alexander added.
The enterprise content management (ECM) application automatically routes invoices through a verification process using a hierarchy of people responsible for ensuring that the hospitals deliver products and services according to contract.
The ECM application also helps Memorial Healthcare control the vendor payment process, which is also auditable.
According to the hospital network, faster invoice processing has led to vendor discounts of more than $2m.
IBM industry and counter fraud solutions vice president Robert Griffin said that Memorial Healthcare is at the forefront of hospital systems seeking to reduce administrative costs and in doing so has also reduced the potential for fraud.
"With big data analytics and effective content management, they have greater visibility into their vendor community where trusted relationships are established, payments are processed faster and malfeasance is eliminated," Griffin added.
Memorial Healthcare System is the second-largest public healthcare system in the US. It provides more than 1,900 licensed beds in six hospitals at multiple locations throughout the south Broward county area.