Progress Made in Healthcare as Flexible Financing Gains Traction

Transforming healthcare — in terms of payments efficiencies, so that providers get paid and patients are able to handle the financial responsibilities tied to getting the care they need — is a bit like turning a battleship around on the open seas.

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It takes time, planning and coordination. Behind the scenes are teams and crews working in tandem to change course.

Recent statistics from the government, available here, indicate that health care spending in the United States grew 7.5% last year, reaching $4.9 trillion or $14,570 per person. The industry accounted for 17.6% of U.S. GDP.

Significant Pain Points

Pain points persist: As PYMNTS Intelligence and American Express detailed in joint coverage through “Pains and Gains: Conquering Healthcare’s Payment Woes,” more than half of payment leaders are concerned about delays in processing payments and claims, which they see as significant operational risks. Eighty percent of the firms that we surveyed said that believe streamlining these processes is crucial, only 53% have adequately automated their workflows. The end result is that 84% of organizations report financial losses due to outdated accounts receivable processes. 

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On the patient facing side of the equation, 70% of providers still use paper for patient communications. The industry itself is grappling with waste to the tune of $760 billion to $935 billion due to industrywide payments and claims inefficiencies.

Even before the pandemic, PYMNTS Intelligence noted that the rising costs tied to out-of-pocket expenses and obligations led to some staggering numbers: The annual value of patients’ out-of-pocket medical expenses topped $63 billion — and roughly $7.5 billion went unpaid. Providers were collecting only about a third of the patient responsibilities, which accounted for 30% of healthcare costs.

Meanwhile, knowledge and avoiding proverbial sticker shock can help ensure that patients move toward paying their bills. As many as 89% of patients consider knowing their bill and making a payment before their visit to be an easy way to pay. Around 59% of patients would consider leaving their healthcare provider due to services not being covered.

Platforms in Favor

But the digital shift through the pandemic and beyond has been bringing more solutions — evidenced in digital interactions, platforms and flexible payment plans — to market.

There’s wide recognition on the part of consumers that platforms can help streamline interactions with providers. As PYMNTS reported, 71% of consumers would like to use a platform to schedule appointments and want to use that single point of access to pay their bills. The data show that 72% of consumers say they want a platform that helps them arrange financing options for their medical bills, and 71% want assistance with finding financial services providers to arrange that financing.

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In terms of just a few of the innovations and initiatives that have been notable through the past year, PYMNTS reported in late December that Anatomy Financial has raised $19 million in a Series A funding round to expand its solutions that enable healthcare practices to convert their billing workflows from paper to digital. The company’s solutions include healthcare lockbox services, explanation of benefits, conversion to 835 files, and smart reconciliation. The lockbox offering eliminates the need for practices to manually open mail, scan and organize documents, deposit checks and enter data into their practice management systems.

Automation and Faster Payments

Earlier in the year, and in an interview with PYMNTS, Big Data Healthcare (a wholly owned subsidiary of Fifth Third Bank) President and Co-Founder Dean Puzon said, “Automation can significantly transform the payment reconciliation process in healthcare,” adding that the future of healthcare payments is defined by the benefits of automation, artificial intelligence and data-driven innovations. Automation can also apply predefined rules to categorize and process payments, directing any unmatched items that require human intervention to the appropriate staff. Streamlining the claims and payment procedure reduces the time it takes to process payments, too.

The rise of instant payments may do much to help move healthcare’s digital shift along. PYMNTS Intelligence reported earlier this year that 83% of small healthcare businesses used real-time rails to send or receive payments last year, with roughly 8 in 10 of those organizations reporting high levels of satisfaction.

The modernization of healthcare payments, for all stakeholders, remains a work in progress, with marked improvements … but much work remains to be done.