Is Paperless Billing Right for Your Health System?
Paperless billing seems like a home run for the healthcare industry. It’s not hard to see why—it improves patient satisfaction, meets consumer demands, and reduces printing and postage expenses.
There’s just one catch: It could also cost your Health System a ton of money in missed payments.
Rather than relying on traditional paperless billing, leading Health Systems should utilize technology that monitors patient engagement to communicate more effectively and ensure the highest probability of payment. By leveraging smart technology, one Patientco client realized over $3MM in additional payments that would have been missed by only sending eBills to patients who opt out of mailed statements.
So, is paperless billing right for your Health System? The answer is yes, if done correctly. Read on to find out how your organization can use smart technology to deliver a better patient experience and maximize patient payments.
Drawbacks of Paperless Billing:
Paperless billing isn’t a new concept: the retail and financial service industries have embraced it for more than a decade. Although healthcare is moving in the right direction by focusing on digital engagement, revenue cycle leaders should proceed with caution. Our research shows that traditional paperless billing can also negatively impact payment rates.
What happens, for example, if a patient signs up for paperless billing but stops using their email address? Or if an e-Bill gets caught in their spam filter? What if the eBill reaches their inbox but the patient simply doesn’t open the email? There’s an art to getting patients to open emails. From an industry perspective, unfortunately, 77.5% of all healthcare emails sent are never opened, according to a 2017 MailChimp study.
For a Health System with traditional paperless billing, the story ends there. The patient’s account balance is sent to collections or written off without any real follow-up. In fact, some patients won’t even know they have an outstanding balance until they get a call from the collection agency.
Smarter Paperless Billing:
To address the challenges associated with paperless billing—particularly the issue of non-payment—Patientco developed SmartSuppress™, an intelligent paperless billing technology that incorporates:
- Patient Engagement Tracking
- Client Business Rules Mapping
- Automated Communication Triggers
- Consumer Preferences
SmartSuppress™ enables Health Systems to monitor consumer behavior and automatically tailor the patient financial experience according to their business rules. For example, if a patient opts in to paperless billing but doesn’t open an email within a set period of time or leaves a bill unpaid, SmartSuppress™ can automatically trigger a mailed paper statement as a secondary reminder.
Let’s say your organization typically sends 150,000 statements each month, and you suppress 5% of those due to electronic billing opt-ins. If your average printing and postage costs are ~60 cents per statement, paperless billing saves you about $4,500/month, or $54,000/year. While that might sound like a lot of money, revenue cycle leaders should consider the hidden cost of saving that $54,000.
When Patientco rolled out SmartSuppress™ to a large health system, we found that payments resulting from additional triggered communications (i.e. mailed statements sent to inactive e-Bill recipients) in the first quarter accounted for over $840,000 in payments (and growing)—that’s more than $3MM on an annualized basis that may have never been collected without the additional communication.
So when considering paperless billing, you should ask yourself: Is saving that $54,000 worth losing the opportunity to collect $3MM?
The Bottom Line:
How can leading Health Systems use this insight to drive optimal results?
1. Ask yourself the $3MM Question.
With traditional paperless billing, your organization may save money but could also miss out on millions of dollars in payments. Is that a risk you’re willing to take?
2. Think big picture.
Avoid the temptation to follow industry trends without considering the implications—particularly the impact on your bottom line. Explore options that enable your organization to accommodate patient preferences and maximize net collections by balancing cost with communication effectiveness.
3. Take action.
Use smarter, automated technology and tracking tools to measure consumer engagement, tailor communications, and drive better business outcomes. More patient engagement equals more dollars.
Healthcare might be behind other industries in adopting paperless billing, but that doesn’t mean Health Systems have to rely on an outdated model. Leading Health Systems will look for ways to leverage new technology to monitor patient engagement, increase statement effectiveness, and maximize payments. After all, patients can’t pay their bills if they never see them.