Provider, payer systems lag consumers’ desire for digital payments

As patients’ out-of-pocket shares soar, they’re looking for technology to help understand bills and facilitate payments.

As consumers take on more responsibility for their healthcare bills and expect on-demand services from mobile devices, providers and payers need to up their game.

Consumer experience with healthcare organizations will extend to how they pay for services and the ease with which they handle growing financial responsibilities with a variety of healthcare organizations, according to results of a survey recently released by InstaMed, a company that facilitates medical billing and payments.

The growing trends were highlighted in InstaMed’s ninth annual report on Trends in Healthcare Payments, which highlights survey results from its analysis of surveys of consumers, payers and providers, as well as folding in other research and data from other industry sources.

There’s a disconnect for consumers, who want and expect more electronic convenience in paying bills, preferring both digital billing and smartphone or web-based approaches to paying bills. And it matters, because consumer payment responsibility now reaches $365 billion, in terms of out-of-pocket spending for medical care.

However, the vast majority of consumers still get bills on paper, and such approaches lead to avoidable billing costs—it’s also an indirect cause of protracted payments from consumers, InstaMed’s survey results assert.

Part of the reason for slow payments includes the opacity of billing correspondence, says Chris Seib, the company’s chief technology officer and co-founder, who reviewed the findings at InstaMed’s recent Healthcare Payments Summit last month in Philadelphia.

For example, 70 percent of consumers are confused by medical bills, while a similar percentage—71 percent, to be exact, are confounded by insurers’ explanations of benefits, Seib says. And consumers, many of whom are stretched thin financially, typically struggle to manage healthcare expenses. Some 61 percent say they’ve received a bill for more than expected; 50 percent of consumers received an unexpected bill; and 24 percent of consumers had accounts sent to collection services. Other industry surveys indicate that 56 percent of consumers would not be able to pay large medical bills.

Their ability to settle bills also is complicated by not knowing what medical services will cost them out-of-pocket. Some 88 percent of consumers say they want to know their payment responsibility upfront; similarly, 81 percent of consumers say they want either payers or providers to give them an online estimation tool to get a grasp on costs before heading in for treatment.

Consumers will drive providers and payers to offer more electronic capabilities, Seib believes. Only 17 percent of consumers receive their bills electronically, but 71 percent of them would enroll in a program to receive electronic statements from payers or providers. Online payment capabilities are getting more traction from consumers as well—from 2015 to 2018, there’s been a 88 percent increase in payments through a health plan’s website and a 121 percent increase in payments through an online portal.

In fact, 86 percent of consumers are clamoring to make all of their healthcare payments in one place, with the vast majority of those saying they would make all provider payments through a payer’s website, if possible—that percentage rose to 88 percent of consumers in 2018, up 23 percentage points in only one year.

Enabling consumers to set automatic payments to break large healthcare bills into manageable chunks is a relatively untapped approach for facilitating consumer payment, survey results indicate. “Automatic payments allow consumers to essentially ‘set it and forget it,’ when it comes to healthcare payments,” he says. “This is critical for payments that consumers can financially pay but add some level of inconvenience to the consumer.”

Provider collection processes have been slow to adapt to rising consumer responsibility, the InstaMed survey results show. Balky payments are still the rule—71 percent of providers say it takes more than a month to collect any payments, and 81 percent of providers can’t collect $1,000 in 30 days.

And paper is still the primary mode for handling billing, respondents noted—90 percent of providers use paper and manual processes for payment collections. Along the same line, 71 percent of providers don’t offer electronic statements, and 61 percent don’t give consumers the option of automatic payments.

Margin-challenged providers also could reap financial benefits by moving to electronic transactions; a practice could save more than $15 and almost 40 minutes on average for a single medical claim by using all seven HIPAA-standardized electronic transactions designed for billing, industry studies suggest.

While payers are more likely to offer electronic information to consumers, they still lag behind consumer preferences. For example, 72 percent of consumers want electronic statements for premiums, but 42 percent of consumers can’t get electronic statements from their health plans.

Both payers and providers thus still have a long way to go to meet consumer expectations for on-demand healthcare and the technology that supports their increasing responsibility to pay for it, Seib says.

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