According to the Consumers Union, total wasted spending in healthcare is $765 billion. Of that $765 billion, $190 billion – nearly 25% – is identified as excess administrative costs. However, that label does not accurately describe the problem. Administrative costs mainly refer to the time and money spent collecting, processing, posting and reconciling payments. The reason these costs are in excess is because of a disconnect between providers, payers and consumers in the healthcare payments process. As much of the industry continues to rely on manual, paper-based processes and multiple, disparate systems for managing payments — both payer and consumer-driven — there will continue to be a disconnect.
A major cause of the disconnect is that providers are challenged to collect payments from both payers and consumers, which complicates the process for a few reasons. First of all, there are inherent differences between payments from payers and payments from consumers. They are different types of payments, they originate from two very different sources (payers vs. individual healthcare consumers), and they are collected at different times in the payment process. These discrepancies have given way to disjointed collection processes and the need for multiple vendors.
Another complication is that these payments have changed considerably in recent years. Since January 2014, payers have been federally mandated to support electronic funds transfer (EFT) and electronic remittance advice (ERA) in accordance with the requirements specified in the Affordable Care Act (ACA). While this change offers providers significant cost savings, faster payments and the security of government regulation, some hesitate to adopt electronic payments for fear of disrupting their processes. Consumer payments have also changed in recent years. 19.7 million consumers are enrolled in high deductible health plans, which makes their out-of-pocket costs higher than ever before. Many consumers are confused about their payment responsibility and how to pay it, which is only exemplified by the disjointed payment processes they encounter in healthcare. Additionally, consumers have expectations to be able to pay for things however they want, whenever they want and with easily accessible information and communication about their payment — expectations that have not traditionally been met in healthcare.
Some providers have tried to address each of these challenges by implementing new technologies into their payment processes. However, this often results in the use of multiple vendors trying to solve different aspects of the same core problem. To solve this, providers need a solution that addresses all healthcare payments that improves the experience for all parties involved and ultimately connects and lifts the healthcare economy.
What if providers could collect from both payers and patients on one technology platform – the same platform for healthcare and payment transactions – and collect all money deposited directly into their bank account with automated posting and reconciliation to their bank? Providers would collect more money, because electronic and automated payments are faster and enable providers to more effectively manage the revenue cycle. Patients would benefit from convenient consumer-friendly payments that let them pay their way, which makes them much more likely to pay in full and on time. Payers would benefit from meeting HIPAA requirements for ERA/EFT and improving their relationship with their provider networks. A connected network streamlines the healthcare payment process to the benefit of all parties involved.
Connecting and lifting the healthcare economy has been at the core of InstaMed’s mission for more than ten years. This year, InstaMed is excited to welcome members of the InstaMed Network to Philadelphia for the 2016 InstaMed User Conference. This year’s conference will focus on the power of the InstaMed Network, which connects all constituents of the healthcare industry on one platform – simplifying, streamlining and improving the payments process for payers, providers and consumers. Providers, payers and consumers will all come together to discuss trends and innovations affecting the healthcare payments industry, leveraging the knowledge and experience of each group to elevate the conversations and identify new opportunities to help the healthcare economy improve and grow.
The InstaMed User Conference begins the evening of Monday, April 4th with a Welcome reception and continues Tuesday, April 5th with a full itinerary of events hosted at The Franklin Institute. The event will conclude with a dinner reception for all attendees.