In an October 2011 survey, Javelin Strategy & Research found that 54% of consumers use a credit or debit card most frequently to pay for goods or services. Only 21% relied on cash.
Your practice already takes patient payments in plastic (we hope!), but would you ever consider taking them only in plastic? Some doctors are eliminating cash from their cash flows, and finding that it’s reaping benefits on their processes.
Advantages: Swiping Makes it Simple
Healthcare is the third most embezzled industry in the U.S., following only banking/finance and government. Quit taking cash, though, and your embezzlement risk goes down to nearly zero.
The handling of cash accounts for much of the fraudulence that occurs in medical offices: nearly 45% of practice managers reported to the Medical Group Management Association that they’ve had cash stolen from their businesses, either before or after it was recorded on the books.
“Cash dispersion and cash receipts are typically the root of the problem,” said Kim Whitehurst, president and CEO of Commonwealth Medical Management Services, regarding medical office embezzlement. “[Embezzlers] take a little bit of money every month.”
The paper (or digital) trail automatically rendered by credit card use not only keeps that $20 co-pay out of a staffer’s pocket – it keeps you from having to take the bill to the bank.
Think about your current processes: in most practices, the tasks related to managing cash – issuing receipts, tallying totals, locking money up, transporting it to the bank – take up a lot of time and energy.
Not to mention that you have to always have a bundle of bills and coins on hand to issue change to your cash-paying patients, plus have safeguards in place to monitor and protect that stash.
Disadvantages: Cash Means Convenience, to Some
Then again, a decision to no longer accept cash may prove unpopular to some of your patients.
In the Javelin study mentioned above, the use of cash was notably more common among people over age 65, who, depending on your specialty and demographics, may make up a large portion of your patient base.
Refusing cash could make your older patients feel alienated and inconvenienced. Additionally, it heightens the odds that they’ll need to pay with checks, which have double the drawbacks: they need to be taken to the bank to be cashed and they bear the risk of bouncing.
Plus, plastic isn’t free to accept. Credit card companies charge a 2-3% fee for each transaction, which is why many merchants insist that patrons rack up a minimum purchase amount to use them. Debit cards don’t incur the same fees, but many consumers run their debit cards as credit cards, or consider them one in the same anyway, so it can be difficult for practices to strictly accept the only debit.
Many cashless practices report that those credit card fees are offset by the elimination of the costs associated with managing and transporting tender, but that may not be the case for all.
Would the Switch be Smart for You?
If you’d like to make yours a plastic-only practice, take a couple of factors into consideration.
How many cash-paying patients do you see on a typical day that might be hesitant about paying cash? Do those patients have debit or credit cards to pay with? Perform a no-cash beta test to find out: during a set trial period, have your front-desk staff request that patients use a card when they pull out cash, and see what responses they get.
If that goes well and you decide to go cashless, publicize your changes in policies in emails or handouts to patients, and keep your cash drawer around during an initial transition period of a month or two before doing away with it altogether.
While you may be surprised at how little pushback you get to a no-cash policy, there’s always a chance that a stubborn patient or two will refuse to play by the rules and will always leave the bank cards at home.
For those holdouts, flexibility is in order. Accept the cash – exact change only – and have it set aside in the business office immediately.
Would you consider going cards-only in your medical office? Why or why not?
