This article originally appeared on Healthcare Business Today.
Hundreds of experts have opined on the flaws of paper checks in dozens of stories in the last few months. From Payments Dive—“When it comes to payments, checks are something of a relic,” said one expert—to CNBC—“The check is inherently insecure,” said another—the sentiment seems to be pushing towards a consensus: the era of paper checks is drawing to a close.
Yet, despite this overwhelming evidence and expert opinion, many industries, particularly healthcare, continue to cling to this outdated payment method, seemingly oblivious to the winds of change sweeping through the financial world. In the rapidly evolving landscape of healthcare finance, providers face a critical crossroads: embrace digital disbursements or risk becoming obsolete. The persistence of paper checks for patient refunds is not just an inconvenience—it’s a symptom of a larger problem that threatens the very sustainability of healthcare organizations. As we delve into the hidden costs and missed opportunities associated with paper checks, it becomes clear that this is not merely a matter of modernization but a crucial step towards ensuring financial health and patient satisfaction in an increasingly competitive healthcare market.
The statistics are alarming: 82% of providers still rely on paper checks for patient refunds, each costing up to $6.30 to process, according to reports from TechTarget and PYMNTS.com. This outdated practice is more than a financial drain; it’s a liability in an era where USPS issues warnings about rampant check fraud, with the Federal Reserve Bank of Boston estimating losses at $24 billion last year alone. But the cost goes beyond dollars and cents. In a consumer-driven healthcare market, patient satisfaction is currency. A recent JP Morgan report says that 44% of consumers find slow refunds the most frustrating aspect of their healthcare financial experience–a ticking time bomb of patient attrition and damaged reputations.
Healthcare providers must act now to implement digital disbursement solutions. This is not a matter of keeping up with trends; it’s about survival in an increasingly competitive and consumer-focused healthcare environment. The transition to digital disbursements is non-negotiable for several reasons. With declining margins, providers cannot afford the luxury of inefficient processes. Digital disbursements offer immediate cost savings and operational efficiencies. In an age where patients have more choices than ever, providers who offer a seamless financial experience will have a significant competitive advantage, according to recent reports by both FT Partners and McKinsey. As check fraud escalates, robust digital solutions offer security measures that protect both patients and providers. Additionally, as healthcare regulations evolve, digital systems are better equipped to adapt quickly to new requirements. Digital platforms also provide valuable data that can inform strategic decisions and improve overall financial performance.
Healthcare providers should be thinking critically about their current disbursement processes. A thorough audit to quantify the true cost of paper checks to the organization is essential. With this information in hand, providers can set ambitious goals for digitization of disbursements within the next 12-18 months. Investing in the right technology is crucial; partnering with a digital disbursement provider that understands healthcare’s unique challenges and can integrate seamlessly with existing systems is key to success. As organizations prepare for this transition, it’s important to educate staff and patients about the benefits of faster, more secure refunds. Once implemented, continuous assessment of the impact on patient satisfaction, operational efficiency, and financial performance will guide further improvements.
The healthcare industry stands at a pivotal moment. Those who cling to paper checks are not just falling behind—they’re actively jeopardizing their future. Digital disbursements are not a luxury or a future consideration; they are an immediate necessity for any healthcare provider serious about financial health, patient satisfaction, and long-term success. The choice is clear: evolve now or risk becoming a cautionary tale in the annals of healthcare history. The time for digital transformation in healthcare payments is not coming—it’s already here.
