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The Importance of Consumer Healthcare Payments


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Make It Easy for Patients to Pay Their Ever-Growing Bills

The US healthcare payments market is expected to reach an estimated $5 trillion per year as a total of both payor and consumer payments by 2022, according to the Centers for Medicare & Medicaid Services (CMS). However, a 2014 Consumers Union report says more than 30 percent of those dollars are considered to be wasted due to inefficient payment processing and antiquated paper-based billing and administrative processes.

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. Many billing services also have unique challenges with hospital-based clients who have no interaction with consumers at the point of service, versus office-based clients. Recognizing these unique challenges, below are some trends driving shifts in consumer payment preferences and how they may impact your client's cash flow as patient responsibility continues to increase, as outlined in InstaMed's 2014 Trends in Healthcare Payments Annual Report.

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, in March 2015, nearly 90 percent of consumers had purchased the Bronze and Silver plans, which have higher overall responsibility, according to the March 2015 Effectuated Enrollment Snapshot press release from CMS.

The challenge now is that billing services and their clients, who previously relied on payments from just a few payors, need to bill and collect payments directly from hundreds or even thousands of patients. To ensure these payments are collected in a timely manner, billing services must identify new processes and technology to accommodate client expectations for simple, secure, and convenient ways to pay.

Seventy two 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. Automating the entire payment collection experience can help minimize any manual effort and allow you to collect more for your clients. Billing services should consider implementing more payment channels, delivering patient statements online, offering automated payment plans, encouraging patients to save cards on file, and automating the posting and reconciliation of all patient payments for all of your clients.

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. Billing services should work with their customers to offer 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. A focus on enhancing the consumer payment experience will ultimately improve collection rates, increase patient satisfaction, and minimize manual work for staff.

Online payments made from a mobile device expanded to 11 percent of gross dollar volume of payments.
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 millennials become the largest demographic in our workforce, it is important to consider a mobile strategy to engage patients.

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 they offer their patients. Billing services that offer more electronic payment channel options to customers can improve patient engagement and collection rates in the future.

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