Electronic claim payment trends all point to one dynamic: faster turnaround.
Simply put, businesses and consumers now expect near-immediate access to funds when they have been given notice of transfer. Luckily, that era of real-time payments is not too far off for health plans.
Today, multiple factors are converging that place the future of digital payments in a broader context (i.e. the introduction of new payment models and the ever-changing reimbursement landscape). Priming for success necessitates health plans ask the right questions to design near-term and long-term payment strategies.
That question? How does faster money movement impact how my organization does business?
Looking at the data
82% of consumers want to make their healthcare payments in one place, and 85% of consumers say they prefer an electronic payment method for their medical bills—yet most providers still send out paper bills.
Moreover, the U.S. healthcare system racks up higher administrative costs than any other healthcare system. Private health plans alone spend $158 billion on administrative costs each year, with average administrative costs per payer hovering around 17.8%.
While many payers have implemented some form of electronic payment, many initial technology deployments were launched to meet compliance requirements as a response to market pressures. Few organizations considered long-term viability or coming advances when setting their plan in place.
Meaning: You’re simply not getting the most out of your current systems.
Getting started: The near-term
You may have taken the plunge into electronic payment by implementing automated clearing house (ACH) payments. But this is merely the foundation for maturing digital payment strategies.
Short-term strategies should focus on incremental steps that allow for the evolving world of faster payments.
The reality is that ACH typically only covers 80% of healthcare transactions. So you’re still relying on legacy processes (i.e. paper checks) for the remainder of payments.
Next steps: Future positioning
Health plans must develop strategies that consider where both the industry and digital payment market is headed over the next five years.
Some trends may include:
Growth of consumer-directed healthcare, tax savings accounts, and high deductible plans.
Shifting consumer behaviors and evolving digital expectations driven by the pandemic are requiring healthcare businesses to reprioritize. Payers and providers must consider the adoption of digital payments to meet the increasing consumer demand.
With an increase in patient financial responsibility, providers are looking to health plan partners to collect payments. Even more notably, most patients are looking for digital payment options.
Going forward, you should consider how to best navigate changing reimbursement models and work with providers and consumers.
Emerging payment technologies.
The use of peer-to-peer payments and digital wallets has grown in popularity, especially among younger generations. And while this isn’t directly applicable to the healthcare industry just yet, such payment systems are becoming the norm and with that come certain consumer expectations.
Venmo, one of the first applications to become mainstream, offers consumers a way to directly transfer money to another person. It takes a couple of days to get funds from Venmo to a consumer’s bank account, but other applications, like Zelle, are changing that dynamic.
The problem? The evolution of these technologies run in stark contrast to ACH processes, where a payment is posted, but a provider may only be able to access a percentage of the amount owed the first day.
That’s why it is vital to prepare for short-term and long-term needs. Payer executives can (and should) establish goals and strategies that align with industry and other digital payment movements.
The Wrap Up
It’s time to retire the 1980s-era healthcare billing and payments. And looking at healthcare’s transformation as an opportunity, rather than a forced change, is key.
The effort of conjoing healthcare with digital payments and data is central to treating patients like paying customers… and treating healthcare as a business — a mindset adjustment that organizations urgently need to make, as the ability to receive bills quickly and digitally, and pay them in the same manner, has become critical in today’s digitally-driven world.
If you’d like to see what Zelis is doing for the new wave of healthcare digitization, please reach out to your Zelis representative or contact us here.