Healthcare providers, payers and consumers continue to feel the impact of the COVID-19 pandemic. Negative operating margins, conflicting priorities and rising costs are some of the challenges healthcare stakeholders faced in the past year. However, the data suggests that the pandemic’s fallout is compounded by years of inaction.
The pandemic gave consumers more convenience with virtual and self-service channels than they have ever had before. Consumers now expect convenience everywhere, including in healthcare payments.
Most consumers report that they are confused and surprised by medical bills. Both trends can be due in part to how long it can take statements to reach a consumer – often more than a month after the service.
Digital payments offer consumers convenience and will help providers to collect faster with fewer resources. Also, consumers are more likely to pay their bills when they have online options.
Without a convenient payment experience, consumers with individual insurance risk missing a payment. Nearly half of health plans reported missed and/or late premium payments from members as a top challenge.
The pandemic stretched providers far beyond their limits. In addition to so many in healthcare feeling burned out, provider organizations face considerable financial struggles. Many provider organizations reported operating with negative margins and needing external funding to remain in business. Surges in COVID-19 variant outbreaks added to the fiscal stress.
Expenses related to healthcare workers have increased significantly. Labor costs are projected to continue to rise in the years to come. Many provider organizations are now challenged to attract, train and retain staff for vital positions, both clinical and administrative. In addition, provider organizations are more likely to incentivize staff with monetary rewards to help close staffing gaps.
Current collection processes hurt the financial health of provider organizations. The majority of providers still use mailed paper statements and staff-dependent processes to collect from patients, even though these are significantly more costly than electronic and paperless options. Additionally, the majority of providers say it takes more than two statements to collect a balance in full.
There is no real precedent to predict how and when patient volumes will return to pre-pandemic levels. In fact, there are more questions than data. Will patients return sicker due to missed screenings and increases in unhealthy behavior like excessive drinking and weight gain? Whatever the answers, healthcare payer organizations do not seem adequately prepared to handle any upticks, considering the operational challenges reported in 2022.
It’s hard to ignore retail’s push into healthcare. Large corporations are making strategic business moves into the healthcare space, which will heat up competition for consumer loyalty. However, health insurers will have the advantage with their deep ties to employer groups, where consumers report being satisfied with their health plans and value their benefits over wages.
Arguably, provider networks are one of the strongest assets for any healthcare payer. To improve the relationship with providers, the payment experience should be closely examined for opportunities to eliminate negative experiences. For instance, most providers still receive paper checks from payers and a significant portion of providers saw increases in fees for claim payments. However, most providers prefer free electronic funds transfer (EFT) from payers.
Learn about the latest trends impacting healthcare providers, payers and consumers.
Note: all information above is via the Trends in Healthcare Payments Thirteenth Annual Report.
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