Healthcare finance is under sustained pressure. Current economic realities and regulatory reform have amplified the need to reduce non-clinical overhead and protect margins.
At the same time, technology adoption is accelerating. A Grant Thornton CFO survey from late last year demonstrates the significance of digital transformation and AI for governing boards, with more than 60% of finance leaders already deploying automation to improve efficiency and resilience. AP automation is a natural starting point: it addresses high volume, rules-based processes that are often manual in many organizations.
For most healthcare systems, AP remains a bottleneck–characterized by paper invoices, manual data entry, and fragmented workflows. These inefficiencies drive late payments, missed discounts, and compliance risk. Automating AP delivers measurable benefits:
- Lower operating costs through reduced manual effort
- Faster processing and improved accuracy, minimizing rework
- Enhanced compliance and audit readiness with digital trails
- Better supplier relationships and working capital optimization
“Automating AP isn’t just about efficiency – it’s about agility. By digitizing and streamlining processes, organizations gain real-time visibility into cash flow, enabling faster, data driving decisions to support strategic growth,” said Grant Thornton’s Sarah Miranda, a Business Consulting Manager.
Automation should not be static but works best when it evolves as the technology improves and the company’s needs adjust:
- Rules-based automation: Early stages of automation should focus on digitizing workflows and applying structured business rules to eliminate manual tasks.
- Intelligent automation: As organizations mature, automation can integrate AI and machine learning to handle exceptions, predict risks and enable real-time decision-making.
- Transformative AI: The future of AP automation lies in creating adaptive systems that learn from unstructured data, enabling predictive insights and autonomous processing.
In short, AP automation is no longer a “nice to have.” It is a lever for cost containment and operational sustainability, freeing up resources to reinvest in patient care and growth.
How TUHS implemented change
The Temple University Health System (TUHS) undertook a comprehensive AP transformation to stabilize operations and build readiness for scalable automation. TUHS has approximately $2.7 billion in net patient revenue, 13 dedicated AP FTEs and processes approximately 290,000 invoices annually. According to Mike Difranco, Temple’s Chief Accounting Officer, they realized the need to take a hard look at TUHS’ data, policies, and process variation across the procure‑to‑pay continuum.
TUHS conducted a thorough review of our procure-to-pay processes: examining workflows, approval hierarchies and management practices to help overcome the health system’s own barriers and roadblocks, said Difranco.
“From the beginning, we understood meaningful change would require not only a clear understanding of our existing challenges but also a coordinated effort across departments to implement sustainable solutions,” Difranco said.
Key steps in the AP automation transition included:
- Eliminating backlogs and redesigning workflows: TUHS aligned its policies with leading practices, and clarified roles across its supply chain, IT, and finance operations.
- ERP “health check” and roadmap: TUHS assessed its ERP capabilities and leadership decided that it will be pursuing a cloud‑based platform for planning and analytics for future automation rests on modern, scalable infrastructure.
- Establishing key performance indicators (KPIs): TUHS designed dashboards for standard AP KPIs and entity-specific metrics and set KPI goals based on industry standards.
- Governance and change management: The health system hosted a semi-annual Procure‑to‑Pay Excellence Summit with AP, supply chain, accounting, IT and treasury departments, to align cross‑functional solutions, standardize exception handling, and institutionalize KPIs.
The result is a disciplined foundation: standardized processes, measurable KPIs, and a technology roadmap to transition from “baseline” digitization to stable and then optimized operations—unlocking touchless processing and electronic payments at scale.
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