Healthcare’s payment systems are long overdue for an upgrade. While other industries are advancing digital transformation, health care remains hampered by paper checks, an outdated process that increases costs, slows reimbursement and strains provider relationships. That’s why the motivation to solve the paper check problem goes beyond just adopting digital payments. It’s about eliminating inefficiencies, reducing risk, and modernizing the way healthcare does business.
Paper check issues
Healthcare still relies heavily on paper checks, and that comes at a cost. Despite the growing popularity of personal transactions, 30% of B2B healthcare payments still rely on paper checks.
Manual check processing is slow and full of hidden expenses in time and money. Processing paper checks is not only 3-5 times more expensive than electronic checks; it also requires printing, mailing, and human supervision every step of the way. These complex steps can cause providers to delay payments, increase the risk of errors, and increase labor costs as payment volume increases.
As one of the most vulnerable payment methods, paper check fraud has risen dramatically since the pandemic—with fraud rates reaching 165% nationwide from 2020 to 2023. This vulnerability becomes a liability in a space where payments must meet strict regulatory requirements and provider-payer relationships are critical.
While adoption of digital technology accelerates for many, paper checks continue to burden operations and negatively impact the bottom line for others.
Transformative digital payments
While paper-based payment processes have held back some developments in healthcare, digital payments are revolutionizing the industry, with major players adapting to the new digital environment by turning to payment solutions that address today's business needs and help them prepare for the future. Such solutions can provide health plans and TPAs with a clear path to optimize operations, strengthen provider relationships, prevent fraud, and reduce costs.
Financial impact and operational efficiency
Payments are more than just transactions. Payments play an important role in claims management and how providers optimize revenue to keep their business healthy. The healthcare industry in particular faces siled payment workflows, wasting $760 billion to $935 billion annually due to payment inefficiencies. Finding solutions that help eliminate these silos and provide integration and interoperability for core and revenue cycle systems can help unlock the potential of digital payments. If implemented correctly, payers can save up to $3-5 per check, while providers can save hundreds of hours in manual processing and posting costs.
Solutions that can be easily integrated into existing core platforms and revenue cycle solutions make implementation easier, speeding time to market and delivering immediate value to payers and providers by eliminating manual processes and ensuring payment and posting accuracy. Just like integration between systems can help payers and providers benefit immediately, so can the reach of a network. Broad network access to providers that already accept digital payments is critical to the rapid expansion of digital payments strategies. Of course, gaining adoption is one thing, sustaining it is another. This is where supplier satisfaction comes from.
supplier satisfaction
Strong provider relationships are critical to maintaining a stable, high-performing network, and the payment experience plays a key role in building that trust. For providers, moving to digital payments can help improve cash flow, reduce risk and streamline operations.
Providers expect payments to be timely, accurate, and easy to manage. Modern platforms should offer free electronic payment and remittance options, allowing providers to choose the method that best suits their workflow.
By automating payment preferences, streamlining payment processing, and accelerating reconciliation, modern payment systems reduce administrative burdens, minimize support issues, and reduce costs. In fact, $193 billion in industry costs could be avoided through automation. The result is fewer delays, fewer disputes and a more seamless payment experience, resulting in increased long-term provider satisfaction.
Security, compliance and fraud prevention
Because paper checks can be intercepted, tampered with, or misused, they are often the target of fraud. Modern payment solutions offer stronger protection by embedding security into their core design, rather than layering it in as an afterthought.
Modern payment platforms must go beyond basic controls. This integration is important because fragmented security approaches create vulnerabilities that fraudsters can exploit, while comprehensive protection protects financial and sensitive data.
Real-time fraud detection and security must be built into the core design of the solution, not added as an afterthought. It is necessary to keep up with the scale and sophistication of today's threats. Artificial intelligence, machine learning, and layered protections such as authentication, transaction monitoring, and access control further strengthen defenses even before the point of payment.
Compliance is also non-negotiable. The powerful solution supports state regulatory requirements and provides a detailed audit trail, ensuring risk mitigation and reporting readiness.
move payment forward
By adopting modern digital payment solutions, payers can streamline operations, improve provider relationships, and reduce the risk of fraud. Best of all, they gain a flexible, scalable foundation designed to meet today's needs and tomorrow's challenges. The path forward is clear: secure, integrated digital payments can simplify complexity and drive healthcare forward.
As health care evolves, our payment systems must evolve with it. Start by leaving the paper behind.
Photo: CaptureTheWorld, Getty Images
Tom Davis has more than 20 years of experience in the healthcare field in a variety of sales and marketing positions. Tom has led product development and e-commerce initiatives teams and held senior management positions at Fortune 500 companies, including General Electric, Genworth Financial and Sun Life Financial.
Since 2008, Tom has been involved in two successful start-ups and helped establish ECHO Health as an industry leader in electronic health benefit payment solutions.
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