The Growing Challenge of Patient Payments: Why Manual, Paper-Based Billing Is Failing
Written by: Carrie Murphy, Director of Solutions Management, Veradigm
Late patient payments can be a big problem for small practices.
Late payments disrupt your practice’s cash flow and operational efficiency. They create significant day-to-day challenges, such as difficulty meeting payroll, paying vendors, and maintaining smooth operations, and they necessitate meticulous cash flow management. Late payments place additional pressure on the A/R team, leading to decreased staff satisfaction; they can even affect practice performance, possibly reducing patient satisfaction.
Between rising healthcare costs and patients’ increasing out-of-pocket healthcare expenses, payment delays have become a growing problem, with 25% of payments to small providers arriving past their due date.
In today’s rapidly changing financial environment, traditional, manual billing processes are no longer sufficient. The solution? It’s time to replace outdated, paper-based billing systems with digital billing and payment solutions. By doing so, practices can meet patient expectations and provider operational needs.
Shifting financial landscape for patients
Unfortunately, modern patients often find healthcare billing complex and confusing. A 2022 survey found that nearly 40% of Americans are confused by their medical bills. The 2024 Healthcare Financial Experience Study reported that 58% of consumers found paying their healthcare bills stressful; 56% found understanding their financial obligations stressful.
Patients also find the healthcare payment process problematic. Consumers rank healthcare as one of the most difficult industries for making payments; 70% identify it as the most difficult. Patients’ confusion over healthcare costs, insurance benefits, and the billing process can prevent payment.
Today’s patients are used to handling their financial details digitally, from billing to communications to making payments. In a recent survey, only 46% of consumers preferred receiving medical bills in the mail (a number that continues to decline); however, 75% of providers still use paper bills, mailed statements, and manual collection processes.
The true costs of manual billing
Outdated, paper-based billing systems can significantly impact your practice’s cash flow. Paper statements take days to print and mail. Mailed payments further increase the time until payments are received, especially for payments made using paper checks. This lag makes it difficult to predict cash flow and interferes with financial planning.
However, the inefficiencies of manual, paper-based billing systems also reach beyond cash flow to decrease staff productivity, increase billing errors, and negatively impact the patient experience.
Decreased staff productivity
The inherent inefficiencies of manual, paper-based billing create a high administrative load for staff, decreasing productivity. Manually printing, mailing, tracking, and reconciling patient bills and statements requires more time, effort, and expense than performing the same tasks digitally.1
Manual processes also often force staff to duplicate their efforts: 74% of practices have to send patients multiple statements before receiving payment.
Increased billing errors
Billing accuracy is essential for your practice to be paid in full and on time, but offline billing processes are prone to errors. Some sources estimate that 80% of medical bills contain errors or overcharges. Billing errors can result in delayed payments and substantial revenue loss. Billing errors can also cause significant time loss for staff trying to correct mistakes.
Billing errors are problematic for patients faced with unexpected charges, often causing financial hardship and medical debt. Resolving errors is frustrating and time-consuming, involving long wait times to speak with billing staff and seemingly endless paperwork.
Billing errors significantly influence patient trust and loyalty. Patients unhappy with their experience may lose trust in their providers, making them less likely to share important health information or follow treatment guidelines. Research shows that 60% of patients would consider switching providers after receiving a bill with mistakes or a surprise bill.
Billing errors can also have legal or regulatory consequences, leading to additional financial losses.
Poor patient experience
Modern healthcare consumers desire greater transparency in their healthcare finances:
- 92% of patients want to know their predicted out-of-pocket costs before receiving treatment.
- Only 20% or fewer know what their healthcare will cost before receiving it.
However, paper medical bills are often unclear or present out-of-date information, making it harder for patients to understand how much they owe and why, limiting patients’ financial transparency.
Manual billing is also inconvenient and frustrating for patients, who are used to the straightforward digital experience offered by other industries. Modern consumers can make online purchases using fully digital processes to log in and make payments. They can configure, order, and pay for cars online, view utility bills online, and see real-time charges and payment information.
Patients expect the same seamless experience in healthcare. They want the ability to receive financial information, make payments, and check charge activity digitally. Many don’t want to call the billing department to answer financial questions. They expect to find answers online, at the time and place they find most convenient.
Studies show that today’s patients overwhelmingly prefer to receive bills digitally, regardless of age.2 Traditional printed, mailed bills don’t mesh with the expectations of modern healthcare consumers.
Why digital systems matter
Digital billing and payment systems provide a potential solution to help improve both revenue cycle management and the patient experience. Three key benefits of digital billing and payment solutions include:
- Faster payments
- Improved staff efficiency
- Greater patient satisfaction
Faster payments
Digital billing technologies can lead to faster payments by improving patient responsiveness. Currently, a disconnect exists between how providers bill patients and how patients want to pay, increasing the likelihood that many patients will take more than 30 days to pay their medical bills. However, electronic statements and payment portals allow patients to review and pay their bills immediately without delays or mailing hassles, reducing your practice’s average days in A/R.3
Limiting patients’ available payment methods can also affect the likelihood of patient payment. One study showed that 25% of consumers abandoned their medical payments due to restrictions on paying with credit cards.
Improved staff efficiency
Digital billing technologies can make patient billing processes significantly more efficient for practice staff. By shifting to digital billing and payment systems, you eliminate time-consuming manual tasks associated with printing, sorting, and mailing patient bills and statements. Making the digital shift also enables you to automate numerous patient billing and account reconciliation steps. These changes free significant staff time, allowing them to work more efficiently and with less pressure, increasing staff satisfaction.
Greater patient satisfaction
The digital shift helps patients by improving the transparency of their medical expenses. Digital billing solutions can provide itemized charges, details on insurance billing and adjustments, and up-to-date balances, giving patients confidence in their current financial responsibility.
Providing digital payment options is also crucial for patient satisfaction. 85% of healthcare consumers prefer using electronic payment methods. Many also want the option of making payments using mobile devices. Data from the Pew Research Center shows that smartphones are no longer a technology limited to younger generations but are common across all ages, including the over-50 group. Digital payment solutions—including online, mobile, or scheduled payments—enable patients to pay using their preferred method, at their preferred time and location.
The result? Patients are more satisfied and more loyal to your practice.
Adapting to the digital future
As healthcare and technology continue to change, it’s becoming increasingly important for providers to adapt their financial workflows to the needs of today’s patients. That means:
- Moving away from paper-based billing and payment systems
- Integrating digital-first solutions to streamline patients’ payment journey
At Veradigm, we provide intuitive, secure, and scalable digital billing and payment tools to help healthcare organizations take a digital-first approach to their revenue cycle. Our solutions are designed to accelerate cash flow and support a more satisfying experience for patients and staff alike.
The path forward is clear: Better patient payments start with better billing and payment technology.
Let Veradigm help you take the next step. Download our infographic here.
References:
- Veradigm, 2023. Veradigm Intelligent Payments – Basic Bundle. VDMP-1277.
- Veradigm, 2023. Veradigm Intelligent Payments – Basic Bundle. VDMP-1277.
- Veradigm, 2025. Veradigm Intelligent Payments. VDMP-1268.