Dear All,

I am working for a Health care BPO. One of our USA client has approached us for resolving their Accounts Receivable problems. Their A/R has piled up from 30 days during 2010 to 70 days during 2011. Also their bad debts/write offs has grown from 12% of charges billed to 26% of charges billed.

The constraints are as follows:

They are a group of hospitals, registered providers of Emergency Medical Services. They cannot deny treatment based on capacity of payment of patients because under EMTALA (Emergency Medical Treatment and Active Labor Act of 1986) they are not supposed to do so until the patient is out of danger, in other words stabilizes. Invariably the bad debts are from patients who are uninsured.

Our client wants to to reduce the bad debts to less than 10% and A/R days to less than 30 days.

Can anyone help me to design a six sigma model to solve this problem.

Regards,
Venkatesan Devarajan.

Hi Venkatesan,

First of all you have understood the problem well and it looks that there could be a good business case to persue it as a project.

You need to start working on your Project Charter. It will help you to scope the project, which will help you to address the constraints mentioned above. As the charter addresses the following:

• Business Case
  
• Project Problem
  
• Project Goal
  
• Scope
  
• Team Members
  
• Financial Benefits
  
• Timelines for various phases &
  
• Project Metrics with baseline and targets
  

Do not start to look forward to the six sigma model at this point in time, rather focus on step by step activity towards approchng the goal.

Hope this helps to initiate the project.

Dear Nirankar Trivedi,

Thanks for your posting.

On further research our team has adviced a few more points to our client like, (1) Have two streams of treatment, one which really requires emergency attention and the other not so critical regular less costilier treatment. This way the burden will be reduced by about 65%. (2) The moment the patient is stabilized transfer him/her to charitable/state sponsored county hospitals, etc.

Also we have thoroughly analyzed their data and completely refurbished their Accounts Receivable mechanism. Now their A/R outstanding is reduced to 64 days. Further it is showing signs of coming down.

Thank you once again for the interest you have shown in my posting.

Regards,

Venkatesan Devarajan.

Great... In six sigma this could be termed as a quick hit.

Let me know for any further query....

Nirankar