CSC (NYSE: CSC) today announced that it has signed a five-year extension to provide business process outsourcing (BPO) services for Aspen Valley Hospital (AVH) located in Aspen, Colo. Financial terms were not disclosed.
Under the new agreement, CSC will continue to provide business office support, including billing, accounts receivable and third-party claims reconciliation. AVH signed the original agreement in December 2005 with First Consulting Group, which CSC acquired in January 2008. During the initial contract, AVH profits rose from $2.4 million in 2005 to $10 million in 2008.
"Our experience in outsourcing our business office functions to CSC has created a massive turnaround that outstrips anything I've seen in my 25 years in hospital administration," said Terry Collins, chief financial officer of Aspen Valley Hospital. "As our revenue stream has improved, customer satisfaction related to billing has also increased significantly."
"AVH saw a major opportunity to improve their processes and transform the way they do business," said Deward Watts, president of CSC's Global Healthcare Sector. "By using CSC to handle back office functions, AVH was able to greatly improve cash flow and refocus its resources on its number one priority - the patient."
In terms of business improvements, days cash on hand rose from 77 in January 2006 to a high of 278 days in October 2008. Collections also improved greatly; gross days in accounts receivable were reduced from a high of 171 days to a low of 36 days. At the same time, AVH's net bad debt write-offs fell from 8.7 percent of revenues to 3.3 percent. In November 2008, when many hospital ratings were being downgraded, Moody's Investor Services affirmed AVH's bond rating of Baa3. Moody's cited one strength of the hospital as "continued growth in liquidity," affirming the increased success of the business office during the past few years.
CSC is a global leader in providing technology-enabled solutions and services through three primary lines of business. These include Business Solutions & Services, Global Outsourcing Services and the North American Public Sector. CSC's advanced capabilities include systems design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting. Headquartered in Falls Church, Va., CSC has approximately 91,000 employees and reported revenue of $17.3 billion for the 12 months ended Oct. 3, 2008. For more information, visit the company's Web site at www.csc.com.