The Growing Role of Consumers in Healthcare Payments
These costs are expected to increase unless the healthcare industry recognizes and addresses the critical role of consumer choice and the impact of the digital economy on new payment channels. Below are some trends driving shifts in consumer payment preferences and how they may impact cash flow as patient responsibility continues to increase.
From 2011 to 2014, providers had an increase of 193 percent in patient payments.
Over the last decade, patient responsibility has steadily shifted to consumers due to factors such as high deductible health plan enrollment and the Affordable Care Act (ACA). Due to these trends, the total dollars and transactions paid by consumers for medical bills has grown significantly. We have seen this also in the exchange where 90 percent of consumers have purchased the Bronze and Silver plans, which have higher overall patient responsibility .
The challenge now is that provider organizations (who previously worked just a few payers) need to bill and collect payments directly from hundreds or even thousands of patients. To ensure these payments are collected in a timely manner, new processes and technology can help accommodate consumer expectations for simple, secure, and convenient experience for consumers to pay.
72 percent of providers indicated that it takes more than one month to collect from a consumer.
Consumers expect a simple, convenient healthcare payment experience as they have seen in other industries, including the retail and travel industries. However, in the healthcare industry, there are often limited choices for online and electronic payment due to the unique challenges we face in healthcare. Automating the entire payment collection experience can help minimize any manual effort and allow you to collect more, including: more payment channels, deliver patient statements online, offer automated payment plans, encourage patients to save cards on file, and automate the posting and reconciliation of all patient payments. It is important to consider a single vendor that can deliver all of the functionality in a single solution in order to minimize the number of disparate vendors for all of these transactions.
Approximately 93 percent of consumers indicated that they wanted to pay their healthcare bills online.
As healthcare becomes more dependent on consumer payments, it is imperative that providers offer credit card acceptance to efficiently collect those payments from consumers. InstaMed's research confirms that 85 percent of all patient payments in 2014 came from credit cards versus 81 percent in 2011. A focus on enhancing the consumer payment experience will ultimately improve collection rates, increase patient satisfaction and minimize manual work for staff, including with more self-service payment channels for their patients such as an online and mobile optimized patient portal, text messaging, bank bill pay websites and IVR solutions.
Online payments made from a mobile device expanded to 11 percent of gross transactions.
The growing use of mobile devices has enabled consumers 24/7 access to email and online services - 63 percent of consumers use their mobile devices exclusively to go online. Based on our research, consumer healthcare payments from a mobile device have increased from 2 percent in 2011 to 11 percent in 2014 and are expected to exceed 18 percent in 2015 overall. As our population shifts and the millennials become the largest demographic in our workforce, it is important to consider a mobile strategy to engage patients.
By 2015, 50 percent of healthcare organizations will have experienced one to five cyberattacks .
Provider organizations are seeking ways to connect electronically with consumers to streamline the payments process, which can significantly increase risks of a data breach and security risks if not handled properly. Without enterprise-level security, provider organizations leave sensitive payment information exposed for anyone to access at any point.
To most effectively protect all payment data, provider organizations must use credit card encryption technology wherever they may collect payments, which allows all credit cards to be encrypted at the point of sale and in the back office. Additionally, embedded payment solutions allow providers to securely collect payments online and from mobile devices without ever having credit card data passing through the networks.
Conclusion: These growing trends in healthcare payments are forcing the industry to understand the critical role of consumer preferences as they make decisions regarding the payment options offered to improve patient engagement and collection rates in the future.
Jeff Lin is senior vice president of product management at InstaMed. He leads the exploration, evolution and execution of InstaMed products. The report may be downloaded at www.instamed.com/trends.