“How much will this doctor’s visit cost?”
It seems such a simple question, but for many people, the answer is rarely straightforward. A maze of complexities often results in the patient unsure of how much to pay. And when the bill arrives, making the payment is not always simple or easy.
In most industries, consumers and businesses have embraced a variety of modern payments methods including digital wallets, kiosks, mobile point-of-sale terminals and more. Yet, the healthcare payment experience has not evolved the way other industries have. Elavon recently interviewed hundreds of patient and healthcare information technology (HIT) company executives across the U.S. to understand the opportunities and challenges facing healthcare payments.
In the survey, patients named healthcare the hardest industry to make payments by an overwhelming margin, with 46% of respondents choosing the sector. The next closest was airlines, with only 18% of respondents.
Why Are Healthcare Payments Lagging?
There are a multitude of factors behind why healthcare payments are so far behind other industries. From the consumer perspective, our survey found that most consumers feel it is difficult to make medical bill payments compared to paying for other goods and services.
Part of this stems from the fact that the healthcare industry lags other industries in terms of price transparency and payment options. The lack of transparency can cause concern and confusion among patients about what they owe and how to pay, often leading to either delayed treatment to avoid paying high, unexpected costs or significantly late payment for medical bills.
From the business side, sending and collecting payments has become a timely, costly, administrative task. According to a 2017 Becker’s Hospital CFO Report, on average, a patient will receive 3.3 billing statements before paying an outstanding medical bill. Delayed payments can lead to fewer appointments and longer receivable cycles, negatively impacting the hospital or office’s bottom line and, ultimately, the ability to provide treatment.
The Opportunity for Innovation and Payment Integration
Payments providers have a unique opportunity to change the patient experience, increase satisfaction and improve the ability to pay medical expenses.
One of the biggest issues to address is providing patients with access to healthcare cost information through self-service channels. As consumers become more comfortable with digital payments in other industries, they will expect the same experience in healthcare. Our survey found that 66% of patients are registered on at least one provider portal to manage payments and billing, and 67% would likely use an interactive voice response (IVR) to pay bills and obtain balance information.
However, generational differences do matter when it comes to making a payment. For example, the study found that Millennials were twice as likely (42%) to select online banking bill payment compared to respondents aged 38 and older (21%). Respondents aged 54 and younger were the heaviest users of mobile apps and PayPal, while less than 5% aged 55 and over reported using mobile apps and PayPal to pay medical bills and preferred paying at the time of service, postal mail and online portals.
Payments solutions, particularly in healthcare, should strive to meet the expectations and comfort levels of different generations. One way to address this is by implementing an omni-channel, integrated payment approach.
Nearly 30% of HIT companies do not have a payment solution integrated into their platform. Only 34% of HIT company executives surveyed indicated their companies offer payment solutions for mobile point-of-sale tablets. Providers are increasingly using mobile tablets to streamline patient intake so enabling payments through those tablets can be a meaningful opportunity to drive receivables collection at the time of service.
Platform support for digital wallets was also low, at a reported 25% by the HIT company executives, even though digital wallet usage continues to grow steadily in the U.S. Keeping in step with healthcare consumer expectations requires innovating payments at the pace of other industries. In addition to automating payment processes and increasing overall receivables collection, an omni-channel, integrated payments strategy should improve the patient payment experience.
Payments solutions providers have an opportunity to bridge the gap between how HIT executives approach integrated payments and what patients want. By understanding consumer preferences and pain points, the payments industry can enable healthcare providers to further enhance the payment experience for their staff and their patients. Developing and providing omni-channel strategies and digital payment innovation is necessary for the healthcare industry to progress, benefitting both patients and service providers while bringing healthcare payments in alignment with other industries.