The healthcare payments industry is growing at a rapid pace; however, 25 to 40 cents of every healthcare dollar are spent on administrative costs. These costs are only poised to increase as changes due to reform and consumerism continue to reshape the industry – impacting the way many providers do business.
Data from the 2013 Trends in Healthcare Payments Annual Report confirms that the healthcare payments industry is evolving and outlines how providers can manage these changes. In particular, growth in consumer responsibility and the shift in payment methods will be crucial areas to increase focus. Below are trends featured in the report and best practices for providers to prepare for the future.
Click here to download the report.
Impacts of Consumerism in Healthcare Payments
67 percent of providers indicated that they saw an increase in patient responsibility.
A decade ago, payers and employers managed almost all of the health benefit decisions for patients. As a result, patients were relatively insensitive to costs as they took care of their healthcare needs. However, today, patients have higher deductibles (over 15.5 million have high-deductible health plans, AHIP) and have become consumers who are sensitive to their healthcare costs.
76 percent of providers said that it took more than one month to collect from a patient.
Trends in healthcare payments show the increase in consumer responsibility is accelerating, but many providers still rely on paper-based, manual payment collection and posting processes. Furthermore, consumers expect to pay healthcare bills when and how they choose, as they do for other bills. As a result, providers are spending more money and more time to collect, yet still accumulating a large amount of bad debt.
Meeting the Challenges of Consumerism in Healthcare Payments
79 percent of patients said that they would prefer to pay online through their provider or health plan website.
Consumers want to manage, pay and understand their healthcare bills in one convenient place. To resolve collection issues and meet the needs of healthcare consumers, providers must work with payers to help consumers take control of their healthcare payments.
55 percent of patients said that they normally paid their monthly bills online, and 24 percent said that they paid those bills via their bank’s bill pay portal.
A growing number of consumers now pay household bills using their bank’s bill pay portal, so they can easily manage all of their bills in one place. By enabling consumers to pay their healthcare bills this way, providers reach consumers where they are already accustomed to paying other household bills, which improves the ability to collect patient payments and simplifies the healthcare payments process.
Discovering Payment Assurance
78 percent of providers indicated that they typically mailed more than one paper statement to collect a patient payment.
In today’s healthcare landscape, providers must operate more efficiently to keep administrative costs low and collect more from consumers. Many industry experts believe that the recent influx of data and analytics due to innovation in healthcare technology, or Big Data, will give providers the ability to navigate the changes.
Click here to read more on Using Smart Big Data to Transform the Collection Process.
72 percent of patients said that they did not know their payment responsibility following a visit.
When you stay at a hotel, are you able to check in without giving your payment card? Of course not. However, consumers receive access to healthcare services with no assurance that they will pay their portion of the bill on time, or at all. Providers have opportunities to use Big Data and technology to accurately estimate responsibility and automatically collect payments, which creates a level of payment assurance already achieved in consumer-focused industries.
Click here to read more on Finding Payment Assurance in the Healthcare Industry with Smart Big Data.
Expanding Patient Payment Channels
76 percent of providers said that they offered the option of payment plans to their patients.
As providers and their clients increasingly rely on consumer payments for revenue, many have started to use more consumer-centered strategies, like payment plans, to collect payments. However, they will have to implement best practices and policies – including automating payments and communications, and ensuring payment data is secure – to improve collection processes.
Click here to read more on How Much Is Too Much? Best Practices for Patient Payment Plans.