Reliance on manual payments holds back health care industry
Payments is the "last mile" in the health care supply chain, where automation promises to deliver significant cost savings and efficiency improvements to help both suppliers and providers.
While electronic payments have become the preferred payment solution in most B-to-B transactions, adoption in the health care industry has lagged.
The numbers tell a sobering tale. An independent report sponsored by GHX found the majority of large health care suppliers distribute 20% or more of their invoices by paper. Further, 76% of these companies receive fewer than half of all payments electronically. Data shows it also costs as much as $31 to manually process each invoice and cut paper checks, a process prone to a high rate of errors.
Many providers mistakenly perceive that manual payment methods offer better cash management. But when taken in the context of the complete invoice and payment cycle, manual payments not only have higher processing costs to the provider and supplier, but also result in delays between processing and making payments. When payments are delayed, supplier costs rise, which are passed on to the provider in the form of higher prices.”
In today’s health care environment, the situation has become painfully clear: This ongoing reliance on manual processes fails to support the industry’s mission to strip waste and inefficiency out of the system to ensure the focus remains on providing outstanding patient care.
Recently, however, there has been renewed focus by both health care providers and suppliers to embrace e-payables to enjoy the cost and efficiency benefits other industries have long enjoyed.
Thanks to advancements in this technology, providers and suppliers can now deploy a standards-based payment platform that offers procure-to-pay and solutions that improve the invoice and payment process across the entire healthcare trading community, helping to drive measurable cost savings and operational efficiency.
With e-payment, suppliers benefit from predictable and accurate payments and can redirect valuable resources to growing their businesses. Widespread adoption of e-payment in health care will enable timely and efficient payments, better pricing and lower operational costs, allowing both providers and suppliers to deliver on the promise to lower the overall cost of health care while maintaining high standards for patient care. All this leads to improved collaboration between suppliers and providers. The procure to pay process finally looks bright for the health care industry.