What one rural health system learned by modeling exceptions before go-live

This post is part of a five-part series profiling health systems featured in Patient Affordability as a Strategic Imperative, new research from Cedar and The Health Management Academy (THMA) on how health systems are responding to rising patient out-of-pocket costs. Read the full report for all five case studies and THMA's complete findings.

System B cut monthly billing statement costs by roughly 63%, from $35,000 to about $13,000, by moving to fully electronic billing, then learned a costly lesson about modeling policy exceptions before go-live.

System B doesn't turn patients away. It's an identity the independent, not-for-profit regional referral system holds onto deliberately: a "patient taker" that serves a predominantly rural, Medicare- and Medicaid-heavy region in a state that hasn't expanded Medicaid. Leadership is candid about why. Collecting aggressively from patients "instills brand dissatisfaction, creates barriers to access, and opens the door for competitors," as the system's CFO put it in the case study.

That philosophy shapes everything downstream, including how the system approached modernizing its billing experience. When planning the shift, leadership weighed an outside platform against building on its existing EHR, and ultimately chose to work with its EHR's technical team, a decision specific to what that platform offered and what the system needed at the time.

The payoff was real: moving to 100 percent electronic, paperless billing cut monthly statement production costs by roughly 63 percent, from $35,000 to about $13,000. But the more instructive part of the story came next. After go-live, the system began reverting delinquent accounts back to paper billing, on the theory that a physical reminder might prompt payment. It didn't work. Paper costs crept back up, and the savings eroded. Leadership eventually concluded that patients who intended to pay would respond to any reasonable channel, and patients who didn't intend to pay wouldn't respond to any of them. They reversed course and kept everyone on electronic billing.

"A more significant number [of patients] went from gold plans, silver plans to bronze plans," the CFO said. "I fully expect there to be more out of pocket, which ultimately means more bad debt."

System B's lesson for other systems isn't about any one platform choice. It's about exception modeling. The system's own experience shows that the exceptions you don't plan for before go-live are the ones that quietly erase your gains after it, regardless of which technology path you take.

FAQ

How much did System B save by switching to electronic billing?
Monthly statement production costs fell approximately 63%, from $35,000 to about $13,000.

What went wrong after System B's paperless billing rollout?
The system began reverting delinquent accounts to paper billing to try to prompt payment. This eroded the cost savings over time until leadership reversed the policy and kept all patients on electronic billing.

What's the broader lesson from System B's experience?
Model every likely exception to a new policy before go-live. The exceptions discovered only after launch are often the ones that erode early wins.

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