Last year, American Express released a report that analyzed the spend tendencies of 15 health systems (excluding labor). Most of the health systems studied had annual revenue of $250 million to $1 billion and 300 to 1,000 beds. The total account spending among the health systems was $1.66 billion, and there were 505,565 total invoices studied.
Here are eight statistics from the study on health systems and their current trends in accounts payable and invoices.
• Roughly 91 percent of health system invoices are paid via paper checks instead of an electronic payment system.
• Health systems could save an average of $500,000 per year if 60 percent of invoices were switched to electronic payments (assuming a cost of $2 per check).
• Hospital equipment and medical supplies have an average days payable outstanding — the number of days between the supplier invoice date and the payment clearing date — of 45 days.
• Roughly 84 percent of the health system industry’s invoices average less than $2,500, but this only accounts for 11 percent of “total spend.”
• Invoices ranging in size from $2,500 to $100,000 comprise 16 percent of the industry’s invoices and 56 percent of “total spend.”
• Average DPO across all spend categories and all health systems in the study was 39.5 days.
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