Once upon a time, Americans traveling abroad were urged not to leave home without their American Express Traveler's Checks. Nowadays, healthcare providers are being asked to regard the credit card company with that same financial responsibility.
While American Express – or AmEx, for short – has been in the healthcare space since the 1990s, the company is making a push for supply chain management services through its Buyer Initiated Payment (BIP) division, which helps organizations handle accounts receivable and improve relationships with vendors.
Healthcare providers "have kind of run out of runway" in negotiating new payment terms with their suppliers, said Andrew Jamison, AmEx's vice president of buyer-initiated payments. "They're looking for alternative avenues in their relationships with suppliers."
And when indirect spending can add up to 30 percent of a hospital's spend pool, Jamison added, CFO's tend to take notice.
Enter AmEx. According to Jamison, the company can help healthcare providers pay their bills, manage revolving lines of credit and negotiate contracts with suppliers, all the while putting them on the path to an electronic invoicing platform. In doing so, he said, the company also proves helpful to suppliers who are looking to be paid promptly and by accredited payers.
"They're looking for process optimization," he said. "That process for them is very tricky. They want solid remittance (and) cash in hand."
One provider who has worked with AmEx is Kaleida Health, a Buffalo, N.Y.-based network of five hospitals, four long-term care facilities, two foundations and several ambulatory care and community health centers, treating more than 1 million patients and seeing revenues in excess of $1 billion each year. According to an AmEx white paper, Kaleida achieved 91 percent of AmEx's projected first year volume in 10 months, and was able to place more than $50 million in spend on the program with 150 suppliers.
"The process has worked well for us," said Patricia Boardway, Kaleida's accounts payable manager, who oversaw the network's adoption of AmEx's BIP program, "and we're excited to have processed more than 25,000 invoices through the platform so far."
"The amount paid to vendors always matches the payment file sent through the BIP solution, unlike traditional purchasing card programs," she added.
While AmEx might be trading in on some of its name-brand recognition (who doesn't recall Karl Malden or the "Do you know who I am?" ads), Jamison said the company's success can be tied to its clout – it's a very large organization, after all, with the resources that hospitals need to use in dealing with hard-to-manage expenses and rising costs.
"Everyone is being asked to do more with less," he said. "We help them do it."