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The COVID-19 pandemic is transforming the way the healthcare industry hands payments.
COVID-19 overhauled the U.S. healthcare system overnight. Systems we paid little mind to before, whether they are life-saving medical supply manufacturers, critical hospital budgets, or ICU capacity limits, now garner universal attention. Doctors, nurses, and vaccine scientists -previously unsung heroes - have stepped into the spotlight, and continue to support us as we face an unknown future. And while the counts of COVID-19 transmission climb, hospitals are facing an unexpected financial toll.
COVID-19’s Impact on Hospitals as a Business
The American Hospital Association estimates the initial four-month financial impact of COVID-19 cost America’s hospitals $202.6 billion in losses. That’s 50 billion dollars of cash bleed a month.
In a post-pandemic world, “necessity is the mother of invention” is no cliché. New methods of doctor-patient interaction - slow to gain acceptance under normal circumstances - have seen overnight adoption. Telehealth has exploded. Mail-order prescriptions are on the rise. And in the face of bold challenges, healthcare is evolving in unprecedented ways. One such adaptation is hospital systems unearthing unconventional sources of revenue.
Calling Upon Your Back Office
The hospital back office, though it may seem as hidden away as the ductwork, is a place where administrators can not only cut costs but actually generate revenue.
This sounds counterintuitive, but it isn’t. Consider automation already present in the most basic of places as the grocery store. It offers shoppers reduced contact with employees to prevent transmission, lower headcount due to increased efficiencies, and fewer bottlenecks of impatient customers at the point of sale. And if even our grocery stores have graduated from the days of signing paper checks at the cash register, then why not healthcare?
The Hidden Benefits of Electronic Payments
There is an innate risk in visiting a physical location in a post-pandemic world. A fully electronic payment process in accounts payable means every step of paying hospital suppliers can be done safely and remotely. This includes preparing a payment file, submitting payment batches for approval, viewing remittances, researching payment history, etc. Reporting is no longer a mess of navigating maze-like bank portals or painstaking hours spent on reporting requirements. An electronic payments process benefits everyone from accounts payable managers to controllers. No one should need face-to-face interaction to keep critical healthcare operations flowing.
Paying Suppliers Differently Can Generate Money
Cost-cutting strategies and technologies are available in many forms. But one that transforms your AP department into a profit center is rare. Eliminating checks from your AP process provides an immediate gain to beleaguered healthcare systems.
Missed payment discounts result from manual payments that require intensive staffing to handle the mountain of paperwork required to make hundreds of check payments accurately.
Early adopters of electronic payments receive the immediate benefit of on-time payments and the full advantage of card rebate benefits without the cumbersome process of enrolling suppliers for credit card payments. Appalachian Regional is one example of a healthcare system that offloaded its manual burden and saved up to 20 to 25 hours per month. Upgrading to a fully electronic payment solution now earns Appalachian and its multi-location healthcare system $65,500 annually in rebate money.
Reduce Instances of Fraud
One proactive and equally important reason to upgrade legacy payment systems within your hospital back office is fraudulent activity.
Unfortunately, checks have a reputation for inviting both internal and external fraud opportunities to go undetected for months, even years. For this reason alone, there is no better time to secure a safer future for your healthcare organization than by upgrading the security of your payments. A fully indemnified payment process guarantees your payments’ security by matching the right payment to the right supplier, every time. And if something goes awry, a payment is made to the wrong party or at the wrong time; there’s zero liability on your healthcare system to recover that lost payment.
Change is Important
Many shifts in tandem create sweeping change but the most important change is the first.
Change doesn’t always have to be slow. As telehealth has demonstrated, the healthcare industry can adopt new strategies more quickly than in previous decades. The hospital back office is no exception, though it often goes overlooked. To boost any healthcare systems’ immediate efficiency, accessible new revenue streams are available with minimal time, technology resources, or commitment to learning a new system. Lower barriers to change by choosing a solution you can be up and running within less than 30 days.
Lauren Ruef has 10 years of professional writing and editing experience, from memoirs to financial blogs and web copy.