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.