The Problem With Paper
It's just too slow...
It’s no secret that getting paid in healthcare is a headache. More than half of the United States’ workforce is currently enrolled in high-deductible insurance plans, causing the percentage of providers’ revenue that must be collected directly from patients to rise to 30%.
This spells trouble for providers, as collecting patient responsibility is anything but easy. In fact, in 2020, 63% of providers reported that it takes them more than 30 days to collect after a patient encounter. And when attempting to collect bills of more than $1,000, that number rises to 78%. No matter how you slice it, getting paid quickly is a struggle–and it’s not that hard to see why: in our current insurance-driven healthcare system, the patient collection system is often dictated by the timeliness of insurance providers.
An Insurance-Driven Collection Process
Many healthcare clinics implement collection practices that look something like this:
Step One: The provider submits the claim to the insurance company.
Step Two: Once payment is received from the insurance company, the provider mails a paper bill to the patient.
And because the nature of working with insurance providers means that claims may not be resolved (and thus payment may not be received) for weeks or months, once it’s finally time to send a bill to a patient, the appointment for which you are mailing them a bill has often become a distant memory… This reality only fuels the unfortunate fact that patient forgetfulness is one of the leading causes of nonpayment. Forgetfulness is especially prevalent among Millennials, the United State’s largest generation by population, as 54% of Millennials admit to having difficulty remembering to pay.
While the delay in billing caused by the insurance claims process causes issues for providers, the method by which the majority of providers are sending bills further hinders the speed of the collection process. You see, 66% of patients receive medical bills through the mail, and 58% of providers rely on mailed paper statements to collect.
Working With The United States Postal Service
One piece of First-Class Mail should be delivered within two days if sent within a local area. But if that piece of mail is sent outside of a local area, it could take five days! Then, consider that if a bill gets dropped in the mailbox after the mail has already been picked up for that day, another day must be added to the delivery time. And if the receiving patient has a P.O. box or fails to check their mail daily, a few more days could be added to the true delivery time. Essentially, the best-case scenario sees a bill go from a provider’s office to a patient’s hands in two days, while the worst-case scenario could be upwards of five times longer.
The problems, regrettably, continue. Most paper medical bills request payment by check or credit/debit card payment coupon, returned via an accompanying envelope. This means that patients are being asked to get a stamp, fill out either the coupon or a check, and then mail the payment information back to the provider.
So even in a best-case scenario world, where the bill reaches the patient in only two days, the bill will still take at least two more days to return to the provider. And that overly idealistic four-day turnaround ignores the reality that if a patient has any issues with obtaining a stamp or a check or just plain forgets about the bill, the return of the payment information could be delayed by days, weeks, or even months!
An Additional Obstacle: Human Error
But the length of bill delivery and payment information return is not the only issue driving the speed (or lack thereof) of paper billing. Paper billing also introduces a level of human error into the billing process that should make any provider uncomfortable. While an impressive feat in many ways, the mail system relies on people to deliver paper envelopes into the correct mail slots among hundreds or thousands of mail slots each day, and as anyone who has ever received mail knows, sometimes mail gets delivered to the wrong address. So, the fate of paper bills is also at the mercy of the mail carrier properly delivering the bill.
But the human error isn’t only on the mail carrier side; it also exists with the patient, as about 50% of mail is marketing mail. This means that bills are fighting for eyeballs amongst an influx of junk mail, so the bills you count on to collect ~30% of your revenue arrive into your patients’ homes amidst a cohort of flyers and coupons destined for the landfill.
The paper billing method simply takes too long. A few days for delivery to the patient, plus a few days for return to the provider, plus however long it takes the patient to find a stamp and remember how to fill out a check, equals weeks and maybe even months before the provider is likely to ever see payment!
Many providers attempt to remedy this by introducing a payment portal aspect into the billing process. This is a good starting point, as it removes the need for patients to find a stamp and mail anything back. But if this payment portal system relies on mailed paper bills to notify the patient of their balance, it is still slower than it needs to be!
Bringing Speed And Convenience To Your Collection Process
It’s 2021; providers should not be relying on paper bills any longer. Smartphones are abundant, the internet is everywhere, nearly every single text message is opened and read, and daily email usage has become the norm for most people. Why then do we insist on sending very important, and often sensitive, medical information inside paper walls?! Why don’t we deliver bills where we know they will be seen, and seen quickly?
Unlike paper bills, text messages and emails are received by their recipients almost instantaneously. Within seconds, a patient can receive a text or email bill–hours before a mail carrier might even pick up the paper bill from the mail deposit box. Then, with modern technology, providers can include links to electronic versions of the bill and allow payment in just a few clicks via a payment portal. This means that in many cases, a patient could pay a bill sent via text message before its paper colleague even found its way from the doctor’s office to the post office!
And for the providers struggling to collect bills over $1,000, electronic bills coupled with payment portals enable providers to easily offer flexible payment arrangements. Instead of asking for payment within 30 days, providers can empower patients to pay over several months.
Making the jump from paper bills to text and email-delivered bills is a no-brainer for providers. And Peachy exists to help providers easily implement the modern, 21st-century billing processes that will enable them to quickly collect patient payments while also allowing patients the flexibility to avoid delinquency by making payments over a few months.
If you’re interested in getting paid faster, let us know.