Incremental analysis of the reengineering of an outpatient billing process: an empirical study in a public hospital

BACKGROUND: A smartcard is an integrated circuit card that provides identification, authentication, data storage, and application processing. Among other functions, smartcards can serve as credit and ATM cards and can be used to pay various invoices using a ‘reader’. This study looks at the unit cost and activity time of both a traditional cash billing service and a newly introduced smartcard billing service in an outpatient department in a hospital in Taipei, Taiwan. METHODS: The activity time required in using the cash billing service was determined via a time and motion study. A cost analysis was used to compare the unit costs of the two services. A sensitivity analysis was also performed to determine the effect of smartcard use and number of cashier windows on incremental cost and waiting time. RESULTS: Overall, the smartcard system had a higher unit cost because of the additional service fees and business tax, but it reduced patient waiting time by at least 8 minutes. Thus, it is a convenient service for patients. In addition, if half of all outpatients used smartcards to pay their invoices, along with four cashier windows for cash payments, then the waiting time of cash service users could be reduced by approximately 3 minutes and the incremental cost would be close to breaking even (even though it has a higher overall unit cost that the traditional service). CONCLUSIONS: Traditional cash billing services are time consuming and require patients to carry large sums of money. Smartcard services enable patients to pay their bill immediately in the outpatient clinic and offer greater security and convenience. The idle time of nurses could also be reduced as they help to process smartcard payments. A reduction in idle time reduces hospital costs. However, the cost of the smartcard service is higher than the cash service and, as such, hospital administrators must weigh the costs and benefits of introducing a smartcard service. In addition to the obvious benefits of the smartcard service, there is also scope to extend its use in a hospital setting to include the notification of patient arrival and use in other departments.