For many consumers in the US, “How will I pay for my medical care?” is a loaded question. It usually leads to more questions, like “How much do I owe today?” and “What does my insurance cover?” and “Is there a payment plan for this?” There remains a great deal of uncertainty around people’s ability to cover the costs of their medical services, let alone what their payment options are when they’re leaving their doctor’s office or healthcare facility. And this is the case whether or not they have a major medical policy.
And the fact that their providers often can’t answer these questions at the point of sale (or, shall we say, checkout?) means they may not collect even a copayment from patients. As soon as a patient walks out the office door, an opportunity to collect something is lost. It’s a palpable challenge for providers and their cash flows.
Let’s look at the ways healthcare providers plan to meet these collection challenges—and how their plans align, if at all, with their patients’ payments preferences. The title of this post is a “spoiler alert” for what continues to be an opportunity for healthcare organizations, and that’s that…
The Big Picture: Collections Trump Convenience
First, consider findings from BillingTree’s recent Healthcare Operations and Technology Survey. Among the healthcare organizations surveyed, there was a relatively low adoption of technology-enabled payment collection technologies. While such technology would surely enhance customer service and lower costs for healthcare providers the way it has for organizations in other industries, there are inherent complexities that make it a lesser priority than, say, collecting payments once the patient has left the facility.
For a closer look at insurance billing and payments, read Tomorrow’s Healthcare Payments, Part 1: Understanding Today’s Limitations and Tomorrow’s Healthcare Payments, Part 2: Exploring New Forms of Automation
Few healthcare providers in the BillingTree study rely on automation and many lag behind consumer adoption of electronic payments. When asked what forms of patient payments they accept, traditional methods take the top two spots:
- Onsite and mail payments – 93.3%
- Over the phone via live agent – 86.7%
- Web portal payments – 66.7%
- Other – 13.3%
- Interactive Voice Response (IVR) system – 6.7%
What’s more, most respondents indicated that they had no plans in 2016 to adopt new technologies. When asked how they will enhance or augment their payment collections in the next 12 months, electronic methods don’t even make it into the top three. Here’s the breakdown:
- Payment plans – 26.7%
- Third party collections – 26.7%
- Adding more staff – 20%
- Adding a Web portal – 20%
- IVR – 13.3%
BillingTree notes the irony in that “the 26.7% of healthcare providers turning to third party firms are likely to take advantage of technology through the systems and processes adopted by those outside agencies.” This goes to show that when it comes down to dollars-and-cents, many providers find more value in making payments investments outside of the electronic realm, even if technology ultimately generates payments for them via collections agencies.
And BillingTree found that among their 2016 Collection Agency Operations and Technology Survey respondents (over 70% of them collect healthcare debts), fewer are accepting cash payments—and increasingly adopting mobile payment solutions. And looking ahead to future technology investments, interest in Online Portals ranked above Live Agent-Assistance, at 86.7% and 82.2%, respectively.
Consumer Healthcare Payment Trends
Next, let’s peek at highlights from InstaMed’s 2015 Trends in Healthcare Payments report. From the consumer perspective, trends follow the greater marketplace, where online and paperless payments are getting more popular. Of the consumers surveyed:
- Most (87%) said that they primarily receive their healthcare bills via mail, while 48% said that they preferred to pay through an online channel, which might be a provider or health plan’s website, their bank’s bill-pay portal, or a mobile app.
- When asked their preferred payment method for their healthcare bills, 72% of consumers said that they preferred to pay with an electronic payment method, including credit or debit cards; ACH; an HSA, HRA, or FSA; or digital wallets.
- The share of online healthcare payments from a mobile device expanded to 18% in 2015—up from 11% in 2014 and 2% in 2011.
It’s all not doom and gloom from the provider camp. There’s good news from the InstaMed study—from a tech adoption standpoint—regarding providers’ sentiments. When questioned about their various collection methods in 2015, 92% said that they accepted payment cards from patients, and 53% said that they preferred an electronic payment from patients including payment cards, ACH, and digital wallet.
Are Providers Following Trends?
While the BillingTree study indicates that actually investing in payments technology is happening more slowly for healthcare providers, the InstaMed research shows that there’s movement in the right direction. BillingTree takes a positive outlook, stating, “In 2017, we look forward to seeing whether healthcare organizations, who have looked to traditional staffing and outsourcing solutions to tackle capacity issues, begin to follow the lead of their peers in other industries and embrace a technology approach that can help to ensure compliance while enhancing customer service and increasing collection efficiency.”
Isn’t it fair to say that healthcare providers are indeed following trends—they’re just doing so at a slower pace?
And what about health insurance companies? Find out what’s making Healthcare Payors Go Digital.