If you’re a supplier for hospitals and health systems, you know it’s a rewarding yet…
Using paper records is costly. It’s more than just the price of paper, printers and toner cartridges. Across the healthcare industry, manual, paper-based processes may add as much as $18 billion to $22 billion in unnecessary annual expenses. Yet many provider organizations and their suppliers are still relying on these outdated processes for procurement, accounts payable (AP) and accounts receivable (AR). opens in a new tab
Crunching the Numbers
The world is going paperless, but some areas of the healthcare industry — including AP and AR — are lagging behind. PINC AI™ data shows that:
- As many as 70 percent of all invoices are paper-based.1Paper invoices are more prone to human errors. Paper records are also harder to track, easier to lose and harder to retrieve. They also take up a lot of storage space that could be utilized in other ways.
- Nearly 85 percent of healthcare purchasing is still done manually via paper checks. 2Paper checks can be significantly delayed compared with instant electronic payments. Delayed payments for suppliers and late payment fees for providers are not efficient practice and can create inventory shortages. Additionally, health systems that mail paper checks may miss out on discounts or rebates offered by suppliers for early term payments.
- Paper processes increase transaction and processing fees. As health systems increasingly transition to value-based care, it’s more important than ever to reduce transaction costs and avoid additional fees. This can help optimize value across an organization.
- The average cost associated with processing a paper check totals more than $7 per transaction.3On the other hand, electronic payment processing averages $4 per transaction. Electronic payments can save time and money both for health systems and their suppliers. Considering the number of transactions a large provider organization may process each month or each year, saving $3 each is substantial.4
- Non-automated invoices take nearly four times longer to process than electronic versions. Most people will tell you that time is money. In healthcare, losing time to processing invoices also can reduce the time staff spends focusing on the bigger picture of patient care.
- It’s estimated that 5-15% of orders experience match exception errors, and invoice exceptions mean delays in payment for the supplier. 5
It’s often because of competing priorities that procurement and accounts payable have fallen through the cracks. But the data is clear. The cost of paper records is high.
Healthcare leaders and their suppliers that truly want to save every dollar possible and create maximum efficiencies should be proactive in moving their supply chain processes to digital solutions opens in a new tab.
Premier launched Remitra™ to help members and their suppliers leave paper transactions in the past. Developed by healthcare experts, for the healthcare industry, Remitra is pioneering better integration between providers and suppliers opens in a new tab. Remitra offers a GPO and ERP-agnostic, cloud-based platform to integrate digital capabilities and streamline supply chain management, from procurement through to payment. The technology features a cohesive, end-to-end accounts payable and accounts receivable experience purpose-built for healthcare providers and suppliers.
Many large health care systems and enterprise suppliers have some level of EDI integration opens in a new tab, but adoption lags due to high barriers to entry. Remitra changes that by converting OCR data from paper records into EDI transmission standards, making it easy to transact digitally even as the long tail of paper-based invoicing is reduced over time
How Remitra Creates Efficiencies, Saves Money
Simplify Workplace Processes
Automation makes ordering and payment processes more reliable and predictable. Smoother workflows in the office allow for more efficient allocation of human resources. Staff can focus on providing patient care rather than worrying about ordering and payment processing.
Automation also builds more reliable relationships with suppliers. When suppliers know they get paid on time every time, the healthcare organization can count on supplies being delivered on time, reducing stress over inventory shortages. This may seem daunting, but an accounts payable department can be modernized in a matter of weeks.
Capture Discounts and Rebates
Many suppliers offer discounts or rebates for prompt payments as well as bulk orders. Automated systems opens in a new tab can help ensure payments are processed on time every time. They also can track ordering patterns and help identify opportunities to save money on supplies an organization is already purchasing. Remitra is so easy to use that providers can extract insightful data and leverage this information for significant cost savings.
Minimize Errors and Fraud
Paper records are vulnerable to human error as well as intentional misuse. Errors and fraud can be costly for health systems, especially for organizations that are penalized with fees. With Remitra, the average PO to invoice match exception rate can be reduced to less than 1 percent, minimizing errors while speeding up payment to suppliers by 10+ days on average.6 Remitra can help minimize these risks, increasing security and protecting an organization’s reputation in the marketplace.
Ease Burdens on Both Health Systems and Suppliers with Faster Payments
Payments delayed due to paper records are burdensome to suppliers, especially ones that operate on tight margins. This can delay the delivery of supplies and strain health system resources. It can also negatively impact an organization’s credit rating, which can limit future financial opportunities, across the enterprise. Many suppliers also charge fees for late payments. Late fees can add up quickly, especially if delayed payments become the norm.
Automating ordering and payments can ensure providers get what they need when they need it, while also minimizing financial risk all along the supply chain.
Digitize Supply Chain Management
Going paperless with Remitra streamlines supply chain management processes. Healthcare organizations can reduce the need for bulky file cabinets and other paper document storage. Digitizing procurement and accounts payable processes also reduces time spent searching through paper files for a misplaced document. Invoices and payment files can be retrieved electronically with just one click, which is important in today’s environment where much of the workforce needs remote access to files.
Remitra offers a cloud-based, end-to-end solution for managing ordering, invoicing and payments. Organizations can streamline the process and take advantage of all these benefits and more.
Getting Started with Remitra
Ready to take the next step and learn more about what Remitra can offer your organization? Starting the conversation is easy. Simply connect with us, to learn more about how Remitra can help modernize your accounting processes.