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Readers Write: Paper Bills Can Be Hazardous to Your Practice’s Health

September 4, 2013 Readers Write 5 Comments

Paper Bills Can Be Hazardous to Your Practice’s Health
By Tom Furr

Every time I go through a healthcare facility I am struck by all the paradigm shifts, inflection points, and market disruptions glistening under the bright lights alit in examination rooms, labs, and other clinical areas.

It truly astounds me that there is such a yawning chasm separating the business office from the clinical side of the practice. It hits me all the more when I pause to consider most of what’s going on in medical practice management revolves around how a doctor will get paid for services provided.

This is part of the fundamental changes needed in the business office that requires a massive disruption to the way patients get billed, payments are secured, and – yes – the embrace of productivity- and profit-improving technology.

In fact, the MGMA states that today practices need to send out an average of 3.3 paper statements to secure payment. It’s not a great leap of logic to add bill issuance and bill pay to a practice’s online capabilities if it’s already “forced” to make patient clinical information available online. What’s more, the need to issue multiple paper statements that can cost around $0.70 to get paid is reduced, if not eliminated.

So be honest — what’s the hurdle that is keeping you from making a change? Are there several cases of paper invoices sitting on a shelf and you feel compelled to use them for fear someone will call you a money waster?

If you truly want to cut costs and improve profitability, throw away those paper bills and all the time consuming, error-producing manual processes associated with that antiquated and expensive process.

To be fair, the tumult of change is daunting for medical practices, but it doesn’t need to be destructive. Embrace change and employ innovative online patient billing and balance management that can be easily embedded into practice management software.

One key pressure medical practices are feeling which will make the change more palatable is the rise of patient accounts receivables; a reflection of the inexorable march from the simplicity of co-pays to high deductible health plans. One industry expert notes that, “It wasn’t that long ago that health plans covered 87 percent of medical bills. Now they cover 65 percent.” According to Aon Hewitt’s 2013 Private Exchange Survey, growth rates of high deductible health plans (HDHPs) has been averaging 10 percent per year, and as more employers promote the plans, the growth rate is accelerating.

If you still need motivation, let me share with you some research findings on consumer behavior when it comes to paying bills.

  • The people who stack up their bills once or twice a month and write checks are far and few between.
  • Folks who get bills in paper form tend to delay paying them versus those that arrive digitally.
  • Medical bills are often not paid because they are complex and confusing and the hassle to find out what the charges are for and what’s owed translates into…delayed payment.
  • Even the US Postal Service, that organization that depends on your paper bills as the bulk of what makes up first class mail today, has come to realize that 60 percent of consumers prefer to pay bills online, the result of a survey they conducted among people just like your patients.

Take a break from reading of the latest diagnostic breakthrough in a medical journal. Look at your practice’s balance sheet, particularly the A/R line. Before market forces push you to sell or close up your practice, embrace change in patient billing and balance management. Go away from paper and move toward better, more manageable profitability with online billing methods.


Tom Furr is founder and CEO of PatientPay of Durham, NC.

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Currently there are "5 comments" on this Article:

  1. Mr. H,

    Your continued support of marketing tripe like this is dragging down the remaining value of this segment. If this is what “Reader’s Write” has become, please cancel the segment and just put up a “listening now” piece.

    [From Mr H] I’ve thought about closing the Readers Write off to vendors since they often can’t resist some PR-assisted pitching, but that’s painting with a broad brush. I’m still not ruling it out.

  2. I have to disagree with the above posters. While Tom certainly works in the industry and would benefit from having all people take his advice, he never promoted his specific product – just the industry. How is that any different from promoting computers for hospitals and clinics on the clinical side? (and isn’t that the whole point of HIStalk?)

    As a competitor in the practice management sphere, I would argue that he’s dead-on. You can have the most advanced clinical technology in the world, but if you can’t get paid, you won’t be able to hold onto it for long. Better technology on the practice management side is a good goal, regardless of where you buy it.

  3. “What’s consistent is advertising and the studious avoidance of disappointing those who might place those ads, which means the stories are often reformatted, feel-good vendor fluff pieces.” – Mr. HISTalk on the HIT trade publications

    [From Mr H] I would be surprised if anyone mistook a reader-submitted editorial (like this one or any other) for a news story. Editorials by definition express opinion.

  4. Seriously? Healthcare billing has been primarily electronic for years whereas electronic medical records usage is something that is still consistently fought against in many sectors and requires incentives from the government to even use. CMS has required electronic claims for years but there was never an incentive payment for that change…

    I realize your focus is for patient statements, but that is not the bread and butter of any healthcare organization’s revenue cycle. And the roadblock to electronic patient billing is not the billing office, it is getting patient buy-in, patient portals that are user friendly, getting patient email addresses and the requisite patient consents to even send them electronic correspondence.

    If you’re going to hop on the soapbox of electronic patient billing you should focus on the real roadblocks, not the billing office.







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