Healthcare payments in the US are expected to hit $5 trillion per year, including both consumer and payer payments, CMS reported. A 2014 report from the Consumers Union says that over 30 percent of these should be considered as wasted as a result of payment processing is inefficient, as well as obsolete paper-based billing and administrative processes.
These expenses are projected to go up, with the only way that doesn’t happen being if the healthcare industry comes up with a way to address the effect of consumer choice and the impact of the digital economy on the newly available payment channels. Several of the billing services have been facing issues with hospital-based clients who do not interact with clients at the point of service. Office-based clients on the other hand do not raise these same problems as often.
In light of these specific challenges, we are going to examine some of the driving shifts in consumer payment preferences, as well as how they affect cash flow when patient responsibility goes up. This information has been laid out in the 2014 Trends in Healthcare Payments Annual Report from InstaMed.
The Changing Trends
Between 2011 and 2014, providers have seen a 193 percent increase in patient payments. Over the past ten years, patient responsibility has gone up due to factors like enrolling in deductible health plans, and the Affordable Care Act. These trends have resulted in significant growth in the total dollars and transactions paid by customers. This is also evident in HIEs where consumers signed up for the Bronze and Silver plans, both of which entail higher overall responsibility, as reported in the March 2015 Effectuated Enrollment Snapshot press release from CMS.
The main roadblock at this time is for billing services and their clients, who before now depended on payments from just a few payers, and are now required to bill directly from hundreds of patients, if not thousands. In order to make sure these are collected timely, services will no need to identify the new processes and technology according to client expectations which involve simple, secure, and convenient payment channels. Almost three-fourths of providers have also let out that it takes over a month to collect from each consumer.
For consumers who want a simple payment method that is also convenient, the ideal experience is one mirroring what they have been able to avail in the retail and travel industries. But in healthcare, the choices for online and electronic payment are often limited because of the challenges we face.
Automation of the whole payment collection experience can be used to bring down manual effort as well as let you collect more clients. Billing services should start bringing in more payment channels, as well as delivering patient statements online, offering payment plans, and urging patients to save their cards on file. Also important are the automation of posting and reconciliation of patient payments for all the clients.
Around 93 percent of consumers have shown some indication that they prefer paying their healthcare bills online. With more dependency on consumer payments inside the healthcare industry, it is important that providers give credit card acceptance to collect payments efficiently.
Research from InstaMed has confirmed that 85 percent of all patient payments in 2014 were made using credit cards, compared to 81 percent in 2011. Billing services working in tandem with customers can ensure the provision of self-service payment channels for patients, like online or mobile portals, SMS notifications, bank bill pay, and IVR solutions. Emphasis on boosting the payment experience for clients can raise collection rates and patient satisfaction, as well as minimize manual work for staff.
Online payments conducted from a mobile device have gone up to comprise 11 percent of the gross value of total payments. The growing use of mobile devices allows consumers to access their email and online services round the clock, with 63 percent of consumers using their devices simply to go online. Research shows that consumer healthcare payments made from a mobile device have gone up from 2% in 2011 to 11% in 2014. With the population shifting the way it is, millennials are about to become the largest demographic in the workforce, which is why, it is important to make up a mobile strategy that engages patients.
The emerging trends in healthcare payments will force the industry to figure out how consumer preferences and decisions affects the payment options offered to patients. Billing services that offer more e-payment channel options to customers can boost patient engagement as well as collection rates in the future.