With the growth of patient out-of-pocket bills, it is becoming more important for Revenue Cycle Management (RCM) companies and medical groups to evaluate the true cost of processing a patient bill and how reducing these costs can impact profitability and efficiency. Often times while evaluating cost, RCM and medical groups will only look at the cost to send a traditional paper statement, overlooking all of the other cost drivers that hamper profitability.
With traditional paper-based medical billing, the same patient statement usually gets “stuffed and stamped” anywhere from three to seven times before it gets paid. However, the real cost is not just sending out paper statements but instead the processing required once mailed back to the business office, a lock box or called in by the patient. Most RCM and medical groups have a team of people in the back office that open envelopes or files, process payments via check or credit card, and post the payment data in their system. Recent third party data shows that collecting an out-of-pocket bill from patients can cost anywhere from $7.00 to $15.00 per bill if a call center is used to collect payment. By examining both the direct and indirect costs, the inefficiency starts to become clear.
Electronic billing for patients streamlines the entire collections process by reducing old-fashioned, costly paper-based traditional methods that demand an increasing amount of time and resources.. Sending patient bills electronically allows patients to receive bills quickly and conveniently pay online, which accelerates the payment collection time. In addition, by integrating electronic payments into your back-end billing system, the payment information can automatically upload and reconcile, eliminating the need for manual entry. Electronic posting not only saves time and money, it also reduces manual error.
While there is value in reducing paper statements, postage, and back-end processing costs, there is also an opportunity to address the need for patient engagement demands. If you are interested in true patient engagement, I would encourage you to send a bill via electronic text message or email to your patients and see how they respond. What we find is patients normally engage within the first twelve hours after sending a text message and twenty-four hours after sending an email.. In the end, empowering a patient to pay their bill electronically reduces costs and leads to more efficient operations, which results in more true patient engagement.