Consumer Trends in Healthcare Payments: Transparency, Simplicity and Convenience are Key

Overview: Current State of Consumer Trends in Healthcare Payments

Consumer trends in healthcare payments are increasingly important as patients take on greater responsibility for managing their healthcare expenses. Rising healthcare costs and high-deductible health plans cause more consumers to look for ways to manage their medical expenses. Healthcare providers and insurers must understand the impacts of these trends to better meet consumer needs and improve the financial experience.

Healthcare payments in the United States are complex and often confusing. The healthcare system is a mix of private and public insurers, with a variety of payment models and pricing structures. Many individuals struggle to understand their medical bills and often face unexpected charges. Also, the high cost of healthcare is a key consideration for consumers and can even be a barrier to accessing care for many people.

As a result, there is a growing trend towards consumerism in healthcare, where patients have a more active role in managing and paying for their medical care. This trend leads to rising consumer demand for digital payments, flexible payment options, and greater price transparency in healthcare.

COVID-19 Pandemic Continues to Influence Consumer Payment Preferences

The COVID-19 pandemic sparked sharp increases in contactless payments and other electronic payment options. Initially, the rise in touch-free payments was sparked by a need to prevent the spread of germs, as well as an uptick in virtual care. These factors continue to affect healthcare payments. Also, consumers are now accustomed to the convenience and around-the-clock access of online payment methods.

Similarly, the pandemic drove an increase in digital messaging between healthcare organizations and their patients, and these patients want to continue using these types of communication.

• 67% of consumers what to continue using digital and electronic payment options, such as receiving eStatements and paying online
• 60% of consumers want to continue to keep using electronic communication channels with providers, such as email and text reminders for medical bills

High Cost and the Growing Need for Price Transparency

The rise of high deductible health plans forces consumers to shoulder greater financial responsibility for their healthcare. This scenario leads to disturbing trends, including pervasive medical debt and consumers delaying treatment, even for a serious condition.

• Nearly 1 in 10 consumers owe at least $250 in medical debt
• 38% of consumers put off treatment due to costs
• 27% of consumers put off medical treatment for a serious condition due to costs

The cost of healthcare is causing more consumers to want to know what they will owe prior to receiving a medical service. Knowing the financial implications of their healthcare decisions beforehand helps them to make more informed choices and better manage their expenses.

Federal mandates for price transparency require hospitals to post clear and accessible pricing information online about the services they provide. While the rule applies to hospitals, most consumers what to know the cost of other healthcare services, too.

Trends show a growing number of consumers are checking prices for their healthcare. Even so, some people may not know where or how to find this information.

• Only 21% of consumers always know how much they’ll owe before a provider visit
• 86% of consumers say it’s important to know how much they’ll owe before a provider visit
• 41% of consumers have used the online pricing information from their hospital or health system

Consumers Want Medical Bills That Make Sense

Whatever the costs may be, consumers want to receive medical bills that are easy to understand.

• 71% of consumers are confused by their medical bills
• 76% of consumers received an unexpected medical bill

Healthcare payment terms such as deductible, copay and coinsurance are often misunderstood by someone who is not a medical billing professional. Meanwhile, the format of the bill itself can make it hard for consumers to determine what they owe and what is covered by their insurance carrier.

The complexity of medical bills can have significant impacts on both healthcare providers and health plans. Confusion about these invoices can create delays in payments and lead to more customer inquiries and grievances.

A Clear Call for Digital Technology in Healthcare Payments

Various statistics point to the contrast between what consumers want versus their actual experience when paying healthcare bills.

Nearly all healthcare providers use electronic health records and other digital tools to manage patient information. These systems also help to enable consumers to access their medical claims and other personal health information via a patient portal. However, many lack the option to pay healthcare bills online. With most consumers already receiving and paying recurring bills online the pressure is on the healthcare industry to follow suit.

• 73% of consumers prefer to pay medical bills online
• 81% of consumers want to pay health plan premiums online
• 35% of consumers had no option to pay their medical bill online
• 66% of consumers are likely to or already use a mobile app for medical bills
• 80% of consumers are likely to enroll or are already enrolled in eStatements from providers

Likewise, many people appreciate the ease of digital wallets like Apple Pay^® and Google Pay™, as well as peer-to-peer payment services, and they want to use these same platforms to pay their medical expenses.

• 58% of consumers are interested in or already use digital payment platforms, such as Zelle, PayPal and Venmo, for medical bills

Regardless of whether a payment is made online, or in the office, healthcare consumers overwhelmingly want to use electronic methods, such as a credit card, debit card, eCheck, and health benefit accounts (HSA, FSA and HRA, etc.).

• 91% of consumers prefer to pay medical bills electronically
• 93% of consumers want to pay for their health plan premiums electronically

Beyond the call for digital payment channels, healthcare consumers want flexibility in how they pay down their balance. More patients, especially those who struggle to pay off large balances, want payment plan options to help manage their healthcare bills. This is even more pertinent in the current economic environment where inflation is driving an influx of “buy now pay later” options.

• 46% of consumers have used a payment plan without fees to pay a medical bill
• 26% of consumers have used a payment plan with fees to pay a medical bill

The Bottom Line For a Better Consumer Healthcare Payments Experience

Healthcare providers and payers who want to respond to these consumer trends must deliver clarity, convenience and simplicity in healthcare payments. Consumer preferences clearly indicate the optimal route to meeting those needs is through digital channels.

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References

Gallup, Americans Sour on U.S. Healthcare Quality, January 2023
InstaMed Consumer Healthcare Payments Survey 2022
KFF, 1 in 10 Adults Owe Medical Debt, March 2022