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Americans have changed how they manage their household finances, and medical practices must adjust accordingly.
The Medical Group Management Association (MGMA) found that the average practice, regardless of size or type, needs to send out more than three paper bills before any payment is received. What’s more, the association’s research suggests the average number of paper-form patient statements required to get any compensation for services rendered is increasing.
Let me assure you, America’s healthcare consumers are not becoming a bunch of deadbeats; not most of them at the very least. They’ve changed how they manage their household finances. And, as a physician, you need to be more than aware of this change; you must adapt your billing methods to it or else face the potential of watching your practice falter and potentially fail.
You may be aware that the amount of first-class mail carried by the U.S. Postal Service has diminished dramatically over the last few years. In the past decade alone volume has decreased about 30 percent. Much of the remaining mail consists of bills and the occasional birthday card from someone’s grandma.
Distressingly, 98 percent of all bills issued by healthcare providers in this country are paper form; which means most medical practices behave like someone’s sweet grandma when it comes to securing payment.
The days when the head of household sat down at the kitchen table to pay bills once or twice a month are over. Even the U.S. Postal Service has come to know that. A survey conducted by Billtrust that found more than 60 percent of Americans prefer to pay their bills online. People who get bills online pay them quicker; literally when they see them in their e-mail inbox.
By contrast, when a paper-based bill arrives at a home, even if it is completely clear and comprehensible, it gets put to the side to be revisited at another time and, possibly, paid after that. One of the inherent limitations of paper bills sent from medical practices is that all the relevant information is not always included in the bill or it comes piece-meal in different envelopes on different days. This confusion creates resentment among patients, who are making more dollar-related decisions about healthcare. And all that means you don’t get paid promptly.
An online billing and payment service is a better option because it lets the patient see all the associated charges in one place, and it facilitates a quicker payment.
Many practices are unwilling to move to an online service because they fear the shift might hinder operations and productivity. While that is an understandable concern, it’s misguided. The best online service does not upset your office’s routine, can be implemented quickly, and does not require “time-sucking” staff training.
An online billing service can cut the time and cost to produce and issue a bill for a $100 charge by 50 percent, according to PatientPay, Inc. Further, it reduces, if not eliminates, the need to send costly follow-up statements seeking payment. That adds up to real cost savings: no paper, no envelopes, no postage. And, importantly, it frees personnel from a time-consuming, error-prone process to focus on tasks that are more strategic or customer-facing.
But more than the billing process, an online service can also eliminate the need to manually reconcile accounts. Find a service that does all the posting automatically and watch how your business manager goes from grumbling to grinning.
As we all contend with the pressures of high-deductible health plans on cash flow, online billing and payment service can decidedly improve your account receivables; which can help you continue to operate in today’s and tomorrow’s challenging healthcare business environment.
Tom Furr is the chief executive officer at PatientPay, Inc, a patented, cloud-based service for physician groups and their patients to process and manage bills and balances. E-mail him here.