This year’s Trends in Healthcare Payments Annual Report makes it clear that change is needed for all stakeholders.
Findings in the report point to digital-first, personalized experiences as the future of healthcare payments.
This is the third year you’ve released this report in the COVID-19 pandemic. What are some of the lessons learned through those experiences? How did the pandemic skew the data in the report?
The most important lesson we have learned is to trust the data to help tell the story – even in a pandemic. The data has overwhelmingly shown that healthcare has been hit hard by the pandemic’s impacts. This year’s report reflects that constant turmoil.
Amid the pandemic, there was an incredible surge in digital usage. Based on this year’s data, we believe that demand for digital connections will be permanent. Consumers likely won’t accept a return to manual processes and paper payments in any industry, including healthcare.
Over the years, your report has led the charge in exposing how consumers are stakeholders in healthcare payments. Were there any new revelations to support this trend?
Once again, consumer trends point to growth in payment responsibility. Yet, providers and payers have not made the necessary changes to help consumers adapt to this. This is best captured in 87% of consumers who were surprised by a medical bill in 2021.
However, the surprises for us came when we looked at the consumer trends by demographics, including age and race. We found that 74% of millennials versus 27% of Baby Boomers would switch providers for a better healthcare payments experience. Additionally, Black consumers are 17% more likely to use financing options with fees for medical bills.
Price transparency is a constant headline in healthcare – how is the industry responding to the mandates?
Yes, there has been a huge push for price transparency through federal legislation in recent years. However, compliance with the mandates is unfortunately low. We’re seeing providers choose fines over compliance, while consumers aren’t aware of many of the requirements.
It’s hard to tell at this point what, if any, progress will be made through any legislation. Either way, it’s clear that the industry has to face some harsh truths. In fact, only 20% of consumers always know what they will owe at the time of service, yet almost all consumers want to know what they will owe upfront.
You mentioned that consumers owe more for healthcare. What is the data in this year’s report telling you on that front? Is the industry making any progress in addressing consumer payment needs?
Yes, consumer payment responsibility continues to grow for both medical bills and health plan premiums. That is one trend the pandemic had essentially no impact on.
While consumers owe more, healthcare seemingly has not made it easier for them to pay. For example, 70% of consumers receive medical bills via mail, but only 9% of consumers want to pay bills with a paper check.
However, where payment innovation is introduced, consumer payments increase. We’re even seeing a 7x growth in payment volume for providers who had more than one payment option.
Based on this year’s trends, where do you see the future of healthcare payments headed?
The industry is really holding on to the slow, inefficient and costly payment processes. Ultimately, that’s just not sustainable – especially not after a pandemic that took such a financial toll.
More broadly, payments are getting faster, more digital with increased visibility. Healthcare can’t possibly remain immune to that progress.
Digital-first, personalized payment experiences offer healthcare the opportunity to better connect with consumers, as well as reduce costs and risks. This will be the future of healthcare payments.
Deirdre Ruttle is Chief Marketing Officer for InstaMed and Head of Healthcare Payments Marketing for J.P. Morgan.