4 Ways Inadequate Medical Bill Design Can Cost Your Practice

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How a healthcare provider tries to collect its bills can affect the timeliness and revenues received. Nearly 90 percent of healthcare providers still send innocent-seeming paper statements to their clients. However, the choice to send unclear or basic paper statements can be the difference between a profitable healthcare provider and those forced to close their doors. If careful attention is not paid to medical bill design, profits suffer.

Unfortunately, many healthcare providers disregard the importance of medical bill design and then lament the skyrocketing costs of their collections efforts. Poor billing design decreases profitability in four ways:

1. Increases Days in Accounts Receivable

Medical bills lacking an intelligent design often lead to customer confusion by de-emphasizing key information such as how much is due for which services. Confused clients typically call customer service for clarification, delaying the collection of bills. This increases the number of days a balance sits in accounts receivable, interrupting the revenue cycle. Confused patients are also more likely to procrastinate, putting off a bill they can’t understand. The longer a bill remains outstanding, the more likely more expensive collection methods will become necessary,

2. Increases Administrative Overhead

Confusing bills can increase administrative overhead in two ways:

  • Higher customer service costs. Unclear bills cause more calls by patients to customer service, which increases the need for more customer service representatives. Thus, healthcare providers spend more on customer care staffing, training, and management
  • Higher collections costs. The longer collections efforts take, the more likely more expensive means will be needed, like sending dunning letters, which requires even more staff, and then eventually involving collection agencies that will take a significant cut for their services.

3. Increases Provider Costs

Patient confusion about how much is owed for which services leads to more bills, which means higher costs for billing materials. More statements mean more money spent on

  • Paper
  • Toner
  • Envelopes
  • Postage

Physically processing these additional statements also requires more time by staff, and eventually more staff, to handle the overload.

4. Increases Customer Dissatisfaction

A smooth and easy billing process is fundamental to a positive customer experience, which can have a powerful impact on profitability. A flawed and incoherent billing process leaves the patient feeling confused, angry, and dissatisfied. Customers are inherently turning to the internet to read reviews before they shop for a medical provider. Research shows that due to the availability of alternatives, U.S. businesses lose up to 30 percent of its customers each year. In today’s internet-centered world, keeping patients happy leads to positive reviews and an increased likeliness of returned business — and even new patients. Studies have shown that as little as a 5 percent increase in customer retention can yield a massive improvement in revenue streams. Customer satisfaction closely correlates with patient retention and lower patient accounts receivable balances.

An intelligent billing statement is an important touchpoint that helps build valuable customer relationships. Medical bill design matters. Poorly designed medical bills create patient confusion, erode customer satisfaction, discourage timely payments, and increase administrative overhead. Medical bills that are easy to read and clearly spell out how much a patient owes for each service rendered will lead to a much healthier bottom line when it comes to collections.

MailMyStatements offers a variety of billing services, including statement design help and color printing. Start a conversation today to learn about our easy and free onboarding process, and how upgrading your statement design can dramatically benefit your revenue.

Hugh Sullivan is the CEO of MailMyStatements, an industry-leading healthcare billing, and payments company. He has over 25 years of experience as a seasoned healthcare executive, was the co-founder of ENS Health — a highly successful national healthcare electronic data interchange company, and has served in various leadership roles within Optum, a UnitedHealth Group company. Considered as an industry thought leader, Hugh is an expert in using health IT to improve healthcare information exchange, which can enhance the quality of care, improve efficiency, and reduce costs.


You can follow Hugh on Twitter @hughdsullivan

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MailMyStatements is a technology-driven statement, payment, and collection vendor that specializes in simplifying the client billing process. #patientstatements

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