Consumers are driving change in healthcare
Industry trends featured in the Trends in Healthcare Payments Sixth Annual Report: 2015 are telling us that consumers have become a new, critical stakeholder in the healthcare industry, challenging the way many in the industry currently do business.
Hospitals and health systems, in particular, must reevaluate how to maintain their cash flow as they can no longer rely on a group of payers for all or most of their revenue; instead, they must collect higher balances from consumers. To maintain cash flow, healthcare organizations can look to other industries that meet a high level of payment assurance through a more consumer-friendly payment experience. Read on to learn more about these trends and what they mean for the future of healthcare.
The amount a consumer must pay before a health plan pays any portion has increased by 255% since 2006.
Increasing enrollment in high-deductible health plans (HDHP) has been a major factor in consumer payment responsibility as consumers must meet a deductible before their health plan covers any portion of the services. Yet, HDHPs are only part of the story as consumer cost sharing translates into out-of-pocket costs including deductibles, copayments and/or coinsurance.
Data from the InstaMed Network confirms this trend as the total volume of consumer payments to providers on the InstaMed Network increased by 94% from 2012 to 2015, growing 25% on average each year.
74% of providers reporting seeing an increase in patient responsibility in 2015.
Healthcare providers are seeing the trend in increasing consumer responsibility firsthand, challenging them to collect a growing portion of their revenue directly from patients. However, providers can only expect to collect 50-70% of a balance after a visit.
Therefore, it is no surprise that more than half of providers reported that their primary revenue cycle concern in 2015 was related to patient collections.
76% of consumers said that they were confused by their healthcare bills.
Rising consumer payment responsibility has changed how consumers approach visits to providers. Consumers are pushing back against the “mystery” of the healthcare costs with questions about payments becoming more common in the provider-consumer relationship.
The impacts of this change are real: about half of consumers will switch providers for the ability to understand cost upon scheduling and to easily understand and pay a bill using a preferred method. (Accenture 2014 Global Consumer Pulse Survey)
91% of consumers reported that it was important to know their payment responsibility prior to a provider visit.
Consumers want to know upfront how much they will owe and then understand how to make their payment. This consumer demand goes beyond providers making their retail pricing available. The need is for consumers to understand an estimate of what they will actually pay based on their benefit information which can include variables like their deductible, copayments and coinsurance.
By making it simple for consumers to understand what a service will cost, healthcare organizations can set payment expectations and then offer multiple payment options upfront – enabling a faster time to payment.
87% of consumers received a paper medical bill from their providers in 2015.
Consumers bring experiences from innovators in other industries where payments are simple and convenient to set their expectations for the healthcare industry. However, the industry has primarily relied on print-and-mail methods for the payments process, which are costly and inefficient for providers and offer a poor experience for consumers.
The poor experience starts with a paper EOB from the health plan that looks like a bill with an amount owed, yet says, “This is not a bill.” Then the consumer receives a bill from the provider for their actual payment responsibility, which is printed and mailed weeks or months after a visit and the EOB, but often does not clearly indicate what is due or how to pay.
For health systems and hospitals, this is further compounded as consumers frequently receive multiple paper bills from different departments at the same organization. For example, when a mother delivers her baby, she may get a bill for an anesthesiologist for the epidural, one from the obstetrician for the delivery, and another for the baby’s care.
75% of consumers opt to pay their household bills through online payment channels, including bank bill pay portals, websites and mobile apps.
A digital experience offers consumers the freedom of choice to manage payments whenever it is convenient for them. Companies like Apple and Uber are shining examples of how to use online channels to disrupt traditional consumer experiences, including how consumers manage their payments. Digital wallets within online patient portals allow consumers to easily manage payment information at their convenience as they already do in other industries.
Digital wallets increase the adoption of automated payment channels by allowing consumers to save payment information on file when a one-time payment is made. In addition, consumers have greater control of their automated payments in digital wallets as they are able to set maximum payment amounts and update payment information as needed.
81% of providers reported that payment security is a top concern when collecting payments.
Healthcare organizations must be cognizant of how consumers want to pay while protecting their systems from a data breach. Compounding this risk are the evolving and complex financial regulations that can be a drain on a healthcare organization’s resources, especially with the recent Europay, MasterCard and Visa (EMV) fraud liability shift and updates to Payment Card Industry Data Security Standards (PCI-DSS).
However, by leveraging advanced payment technology such as point-to-point encryption (P2PE), healthcare organizations can significantly reduce their risks to exposing payment data while allowing them to more easily meet the necessary standards to accept any payment method.