Among nonprofit health organizations, Legacy Health in Portland, Oregon, is a role model. Named one of the Best Large Employers in America by Forbes in 2022, the nonprofit health system plays a critical role in the lives of 2.5 million people in both rural and urban areas. It is known for its above-and-beyond approach to supporting staff and community members in need.
But that doesn’t make the nonprofit system immune from the financial challenges the healthcare industry faces. That’s one reason Legacy Health’s leaders were receptive when they learned the health system could earn cash rebates by paying some of the 900 invoices it processes each day using a virtual card instead of a check.
But the early results from the virtual credit card program were disappointing, according to Teri Benack, who has served as the health system’s Manager of Accounts Payable for the past six years. The selected bank program had signed up few suppliers, resulting in lower revenue share than expected.
Enter Commerce Bank.
After learning about the virtual credit card program’s performance, Commerce Bank approached Legacy Health in 2016 with a tempting proposition: allow the enrollment team from CommerceHealthcare® three months to contact those suppliers still being paid by check and seek to change their method of payment to a virtual card. In return, Commerce would accelerate Legacy Health’s revenue share, paying the expected cash within 90 days of the start of their supplemental program.
Legacy Health’s chief financial officer agreed to the plan. A supplemental agreement was signed, and 25 days later, CommerceHealthcare® had an AP program up and running.
Over the next 90 days, the enrollment team signed up supplier after supplier who had previously declined to participate, nearly doubling the dollar volume of the invoices paid through the program. Within a year, Benack, who advocates for process efficiency, approached the health system leadership with a suggestion.
“It didn’t make sense to continue working with two different banks on the same program,” she says. “And Commerce was delivering on its promises.” Legacy Health’s leadership agreed. The health system switched its entire virtual credit card program to CommerceHealthcare®.
“Today, the health system receives a rebate of approximately $50,000 a month through the program,” according to Benack. “We put as many payments as we can on the AP card and then push most of the rest to ACH. Even if a supplier won’t accept a card, Commerce figures out a way to make payments that generate efficiencies for us.”
The strategic thinking of Benack and the hospital’s AP staff, coupled with the increase in automated payments, has improved the efficiency of Legacy Health’s back-office operations. “When I started working here, we had 50 to 60 days’ worth of unprocessed invoices in the pipeline,” she recalls. Today, the backlog is typically three days or less.
More than 80% of supplier payments are now paperless, with the remainder made by check, according to Benack. “In the healthcare industry, an 80% paperless rate is remarkable,” she said. The number of AP specialists needed to process daily invoices has been reduced from 18 to 10.
Going the extra mile.
To Benack, who has “seen it all” over her long career, customer service also matters. “Commerce makes me feel valued,” she says. “When I have questions, my banker calls back right away.”
That includes the time in 2020 when about 20 Legacy Health employees were displaced from their homes by wildfires raging near one of the system’s hospitals in rural Silverton, Oregon.
"We had employees who were completely cut off with no access to funds,” Benack recalls. “The first person I thought to call in that situation was my banker at Commerce."Teri Benack, Manager of Accounts Payable, Legacy Health
“I told her that we needed to get money to these employees fast,” she recalls. “I knew Commerce would be creative and come up with a solution.”
Within hours, Commerce put a system into place that provided the displaced employees with pre-paid cards they could use to cover out-of-pocket expenses.
“Things like this aren’t in our job descriptions,” explains Benack. “But we are very much a community here, and when we hear of an employee in need, we figure out the best way to help. We take care of each other.“
“Our bankers understand that” she adds. “Everyone at Commerce is professional and accommodating. They never hesitate to help.”
CommerceHealthcare® solutions are provided by Commerce Bank.