To measure the performance of smartcard billing, this study focused on the incremental cost of reengineering the billing system and the waiting time for cash billing. In using the smartcard service, patients reduced their waiting time by at a maximum of 8 minutes (as they did not have line up to see a cashier), and could immediately proceed to the hospital pharmacy to fill their prescription. The results reflect the benefits of the smartcard procedure. Although the waiting time was reduced (and users did not have to carry large amounts of cash with them), the unit cost of the smartcard billing service was higher than that of the cash billing service. Thus, hospitals have to weigh the unit cost against the obvious benefits. However, it is possible that the unit cost will decrease overtime as the hospital and patients better understand the new system. The sensitivity analysis showed that the hospital would be close to breaking even if 50% of patients used smartcards to pay their invoice, with four clerks in operation.
While the smartcard billing service had a larger unit cost than the traditional cash service, the difference can be considered relatively minor, and could be justified by taking into account the decrease in time and increased convenience. It can also be inferred that the hospital successfully created a positive image by providing patients with convenient service. Moreover, users were likely to have enjoyed the benefits of convenience, time saving, and the extra security that the card provided (such as not needing to worry about carrying large amounts of cash).
Furthermore, hospitals are non-profit institutions with patient-centered ethics, and should strive to make a patient’s time in the hospital as smooth as possible. Public hospitals have a key mission to provide community service, and this is only furthered by the availability of a smartcard billing service.
We found that the main difference between the cash billing service and smartcard billing service was the waiting time involved in cash billing and the giving of change. Users of the smartcard service saved at least 8 minutes by not having to use the cashier window and they did not have to carry a large amount of cash for outpatient transactions.
Such a system could also be used elsewhere in the hospital. For example, it could be implemented in other departments such pharmacies and in radiology departments that are frequently used by outpatients. If the system was used on a larger scale it could increase facility productivity and efficiency. Furthermore, the system could also be used by patients (i.e., swiping their cards) to notify nurses/doctors that they have arrived for their appointment.
From the viewpoint of the cost structure of the smartcard service, the labor cost is the main component of the unit cost. Regarding this hospital, the reengineering of the cash billing service does not increase labor costs. Under a cash billing system clerks are required to work in the cashier windows. With the smartcard service, some billing labor loading referred to nurses in OPD clinics, and thus the hospital would save approximately NT$29,633 per month per clerk. The results of the sensitivity analysis showed that the hospital could save NT$1,697 by removing one clerk, and patients using the cash billing service would save approximately 3 minutes in waiting time. Consequently, the idle time of nurses could also decrease as they would be responsible for processing smartcard payments. In other words, the reengineering of the billing service would improve OPD nurse productivity.
A key consideration is, however, that it is important to reduce the cost of labor because when idle time increases, production costs increase. Idle time is the unproductive time in a production process due to a number of reasons. When increasing production, hospitals must be able to keep track of idle time, and use that information to calculate productivity rates. Based on that information, the hospital can then eliminate idle time. It can be assumed though that idle time may increase as nurses become more proficient with the system.
The cash billing service also has other potential functions: the system could be used for new patient registration and inpatient billing services, and for outpatient billing services when the fees are especially high. Therefore, smartcard billing services cannot, as yet, completely replace cash services. Thus, a cash billing service has the characteristics of a fixed cost, and where cash billing has been replaced by a smartcard service, a part of the cost of cash billing services can be classified a sunk cost (e.g., depreciation, and costs that have already been incurred and cannot be recovered) [21–23]. As the activity level increases, total fixed costs do not change, but the unit fixed cost declines. Thus, the cost analysis focuses on the total fixed cost rather than the fixed cost per unit . Regarding decision-making, it is wise to include a fixed cost in the total cost, rather than as a per-unit cost. Where a fixed cost has been allocated , it is then necessary to identify whether or not it is avoidable .
The sensitivity analysis shows that we could suppose that hospital administrators install further cash billing windows to reduce the waiting time of cash billing users. While 53% of outpatients used the smartcard billing services, users of the cash billing service could reduce their waiting time by one third. Incremental costs could break-even because of the decrease in direct labor required for cash billing services in the hospital.
It is also important to provide further incentives for people to use smartcard billing services: greater convenience (including increasing the number of smartcard top-up stations in the hospital, special windows in pharmacies for smartcard users, to be used for inpatient services as well) and lower costs (for example, a discount if the patient pays by smartcard). These incentives are likely to be significant factors for users.
Furthermore, in the event that a smartcard transaction is unsuccessful, that is, the funds available on the card are insufficient, patients would add value to their cards at a top-up station or go and visit a cashier window to pay for their visit. If the rate of such crossover was reduced, the total cost for smartcards could be less than that for cash. Such failures would be likely to decrease as patients grow more accustomed to the procedure and remember to keep their card values high. However, in Taiwan, there are very generous government subsidies for hospital treatments and the amounts that patients have to pay are relatively small. These are generally easily paid with pre-paid smartcards, and patients seldom encounter problems paying by smartcard.