How Many More Reasons Do You Need?
By Tom Furr
The US Postal Service recently raised the cost of a first class stamp to $0.49, a 6.5 percent increase. Darrell Issa, the Congressman chairing the committee that approved the rate hike, admits, "This rate hike and the ones sure to follow will only push more and more private sector customers to stop using the mail altogether. The rate increase poses a direct threat to the 8 million private sector jobs that are part of the mailing industry as businesses shift from paper-based to electronic communication and mailers are priced out of business."
Think about it. If you had a supplier that said, “We are losing money because nobody really needs our product any more, but we are raising our prices so we can try to hang on a little longer,” how much longer would you stay with them? Or if I told you that your COGS was going up 6.5 percent and you had no alternative in vendors or processes, you might start looking at your business model and thinking about a way to work around that vendor.
In addition, bulk paper costs are expected to rise 2.5 to 6 percent over the next year. I can promise you that your vendors are not going to absorb those costs. If you are responsible for collecting payments from patients on behalf of hospitals and practices, it is a stone cold fact that you are going to see your costs rise next year. I wish I had better news for you, but unless you change something soon, you are going to have some very hard choices to make.
Once choice you can make now is to look at shifting to an online solution that allows you to present patient statements and collect payments easily. It’s not just what you need, it’s what patients want. I was talking to Allen Warren of A&H Billing last week and he explained that he adopted online bill pay because that’s what he prefers when he pays his bills. “When I talk to folks in this business, I ask them, ‘How do you pay your bills?’”, he said. “The funny thing is they all sort of laugh when they think about it. It seems so obvious when you step back from it.”
It’s no secret that I have been looking to drive online payments for our partners, but when the USPS admits that today more than 60 percent of Americans are paying their bills online and their response is to raise rates, how is that good business? It’s going to make consumers look for ways to not use their service. The question is do you want to go for that ride to the bottom with them? I know I don’t, and while I used to look at companies that offered online bill pay as innovative, I now just look at them as sensible.
The cost of postage is going up, the cost of paper is going up, and consumers want to pay their bills online. How many more reasons do you need?
Tom Furr is founder and CEO of PatientPay of Durham, NC.