Case Study: Paper Document Storage Costs

A Case Study- the University of Massachusetts Medical Center – Paper Document Storage Costs

Written by ComplianceBridge Policies & Procedures Team on December 23, 2010

All industries face the challenge of quickly and efficiently retrieving business related documents. But nowhere are those costs more explicit than the health care industry, that can face the challenge of over 1 million paper documents alone per hospital.

The University of Massachusetts Medical Center performed a study outlining the costs of having a burdensome paper document management system. They found that the costs were one giant (paper) weight on their organization.

“There are five major areas in which the manual system affects costs:

  1. Slow retrieval time results in delayed or lost income.
  2. The system is labor and space intensive.
  3. The manual system produces a risk of missing files which causes lost income.
  4. There is a lack of confidentiality.
  5. No back up exists to support disaster recovery.”

The costs of simply filing the documents are obvious; it costs labor, supplies, and equipment.
However, that burden is just the beginning. The UMMC outlines the burdensome practice of retrieving documents. They write:

“Even if the staff are conscientious about filing methods, locating documents is still a labor and cost intensive operation. In active file operations, the following functions are being performed for retrieval and filing:

  1. Receive a request;
  2. Travel to the file area (Current year files are located in 2 separate rooms, the past Fiscal Year documents are located in an additional location);
  3. Locate the appropriate section, identify and pull;
  4. Route file or document to the requisitioner (file is now unavailable to others) or
  5. Copy documentation requested and route to the requisitioner;

After the document is used, follow-up steps are:

  1. Files returned and sorted in batch sequence order;
  2. Travel to file area;
  3. Locate section, identify where the batch was originally located;
  4. File any new documents associated with the batch;
  5. Refile in the folder/batch;
  6. Travel back to area.

There are potentially 11 steps involved in retrieving and refiling requested folders.

Employing a secure, fast, online repository of documents seems completely worth it, even if you just take the filing and retrieving costs into account. Yet those costs are just the beginning, they do not account for the costs of lost and misplaced documents.

They continue: “A study performed by a bank in Los Angeles calculated a cost of $60.00 each to replace a missing file.” and that “based on the two week study… there are currently 146 document requests each month that go unfilled due to lost documents”. That is $8,760 a month, or over $100,000 a year just in lost documents!

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