Medical billing lags in adapting to technology

Electronic billing systems provide consumers with the ability to pay their bills from anywhere at anytime. It's a convenience that most Americans have come to expect from the companies with which they interact. However, few patients are able to experience this level of accessibility when it comes to paying their healthcare expenses.  

90s tech for modern billing
Despite extensive technological advances in healthcare software over the last decade and a half, medical billing remains largely stuck in the past. According to Bloomberg Business, since the beginning of the 21st century medical payments are the only category to report an increase in paperwork. In fact, an infographic from PwC Health Research Institute showed that only 15 percent of commercial insurer payments were sent electronically in 2013. 

Bloomberg further reported that the number of medical bills paid through the mail by households also increased in this time, despite the fact that the number of overall payments made through the mail by families decreased by 40 percent. 

Because of this refusal to adapt to online payment methods, patients - some of whom are still sick or recovering - are often left sorting through piles of paperwork and watching the mail for a check that may or may not be on its way.

A high price to pay
The failure to adopt medical billing software can add up. In the first three months of 2015 alone, claims clearinghouse Emdeon spent $87 million dollars on postage, nearly a quarter of its total revenue, Bloomberg reported.

Which such high costs, why are healthcare agencies still resisting the switch? One reason could be the initial financial investment required to go digital. Like any technology advancement, money needs to be put in at the beginning before you can see results. 

The fact that there are so many players involved could also be a factor. In order for a medical practice to fully implement online billing, all of the insurers that the office accepts also need to be on board. If insurers don't participate, medical professionals have little incentive to do the same. 

A 2014 study by Health Affairs found that administrative costs in hospitals in the U.S. accounted for about 25 percent of total expenditures. The total ranked the U.S. above all seven of the other countries studied - Canada, England, Scotland, Wales, France, Germany and the Netherlands. And the international health policy experts that conducted the study reported that the number was increasing.

Nationwide adoption of medical billing software could be a solution to bring down these administrative expenses, allowing more money to be focused directly on patient care.

Steps toward implementation
But not all insurance payers are behind the times. PwC Health Research Institute reported that 73 percent of Medicare payments were sent electronically in 2013. 

UMass Memorial Health Care's four hospitals have also made a push toward online payments from insurers over the last decade.

"Anything that we can do to help make the process of understanding and paying their bills easier for our patients is good for them and good for us also," John Salzberg, the vice president for revenue cycle, told Bloomberg. 

The government has taken steps to encourage the system towards greater efficiency. Bloomberg reported that the Affordable Care Act limits the amount that insurance companies can spend on things that aren't medical costs. That includes administrative expenditures. The law also required health plans to have the ability to pay physicians via electronic transfer by January 2014. 

As more and more players in the healthcare economy embrace online medical billing solutions, the system will become increasingly efficient and appealing for providers and consumers alike. 

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Kevin McCarthy's picture

Kevin McCarthy

Industry News Editor

An avid traveler and news junkie, Kevin covers a range of topics from healthcare technology to policy and regulations. As a former journalism student, he enjoys finding stories relevant to small practices and is passionate about keeping them informed. Before joining NueMD, Kevin worked for Turner Broadcasting as a Programming Intern where he conducted legal research and contributed to editorial content development. He received his bachelor's degree in Communication from Kennesaw State University and currently serves as the Industry News Editor at NueMD.

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