Healthcare has been transitioning from paper-based processes to electronic transactions for years — but the pace has been slow. Despite regulatory mandates to convert payments to electronic channels, much of the industry still largely relies on paper and telephone calls for billings and payment.
According to the Trends in Healthcare Payments Eighth Annual Report, four out of five consumers get their healthcare bills in the mail. Alternatively, 86% of providers report receiving paper checks and explanations of payment (EOPs) from one or more of their payers. This, in addition to high-risk security breaches, is damaging consumer loyalty and trust in the industry. Here's how:
Customers are frustrated by their healthcare payment options
Technology has given consumers a retail mindset: 24/7 shopping opportunities, delivery on demand, and an unprecedented ability to compare prices of products and services. For consumers, healthcare transactions should be no different from other transactions. They expect the same payment experiences and innovations found in other industries — where costs are communicated clearly and payment options are convenient.
Consumers prefer to pay their bills through online payment channels. According to InstaMed, 75% of consumers pay their household bills online. And with the growing popularity of payment cards and digital wallets, 72% of consumers report a preference to pay their medical bills electronically as well.
Healthcare providers need to recognize that the patient financial experience is just as important as the patient care experience. The InstaMed survey points out that patients are ready for their healthcare providers to catch up with the rest of the world’s digital revolution. Nearly eight in 10 consumers still receive a paper medical bill, but only 21% of consumers actually want to use checks to make healthcare payments.
The healthcare industry still views consumers as patients — not purchasers. When it comes to digital payments and processing, U.S. healthcare is a fragmented smattering of systems that lack universal standards. Many healthcare providers still collect and deposit paper checks, and manually post and reconcile claim payments in their accounting systems. A PwC Health Research Institute (HRI) survey summed-up the industry’s billing and payment systems best: a horse-and-buggy model in a world contemplating driverless cars.
Data security is a concern
The impacts of compromised data cost the industry not just financially, but in reputation and customer attrition. Security is foremost on the minds of providers, payers and consumers as the industry struggles to keep data secure. In fact, according to InstaMed, 2017 saw more healthcare data breaches than any other year: Six million records were impacted during 477 health data breaches. One in four consumers has had their healthcare data breached at some point.
It makes sense, then, that 47% of consumers have significant concerns regarding the security of making payments for both their medical bills and health plan premiums. Healthcare providers need to invest in data security improvements not just for consumers' sake, but also because data breaches take large tolls on the impacted organizations. In total, data breaches cost the industry more than $3.6 billion per year.
Personal and sensitive information such as social security numbers, birth dates, payment card information and insurance coverage identification are all at risk. The value for this information on the black market is high, so it is no surprise why healthcare is such a prime target for cybercriminals.
Address consumers' concerns by outsourcing
Healthcare is more complex than many other industries — a tangle of relationships between patient, healthcare provider and insurer, governed by regulations such as HIPAA. And amongst these relationships are payment and billing systems that really don’t work well together. But there is a potential cure: outsourcing.
Outsourcing payment solutions such as lockbox, receivables, bill pay and remote deposit capture keeps you a step ahead of the changing payments landscape. Scale with technology to keep overhead in check and stay current on software — while offering consumers the secure payment options they want. Additionally, innovative payment solutions such as Deluxe eChecks make it easy for healthcare organizations to streamline their payment processes.
Healthcare providers benefit by working closely with their payment processing vendors. Streamlining and optimizing payment processing expedites the patient payment process while increasing back office efficiencies. Moreover, healthcare providers that offer seamless, secure and flexible billing and payment options will retain more customers — and continue to attract new ones.
The information provided in this blog does not, and is not intended to, constitute legal or financial advice.