HPS News

In the News: Apply E-commerce to Consumer Health Payments

This article was featured in DigitalCommerce360 - here is the link to the original.

Before switching over to even a well-known platform for digital payment, each healthcare provider should run a return on investment analysis.

The world of healthcare billing and payments has been reinforced by regulatory bodies to have paper at the center. Those that are becoming leaders are figuring out how to change the paper experience to digital. However, they must give consumers the incentive to make payments online.  When they are successful, there is a higher conversion rate—more accessibility, more flexible to tailor to a person’s needs—just like a retail experience.

Take, for example, Amazon. When customers use the shopping cart, it is designed the same way as any healthcare billing/payment checkout process. When the process is familiar to the consumer, they are more likely to use it. Companies that move in that direction are ones that will have a higher conversion rates, fewer accounts sent to collections, and a much more timely, friendly environment for the consumer.

Digital banking set the stage

When banks started offering digital and online banking, a new era in currency exchange began. Banks offer electronic transfers, electronic bill payment, transfers between accounts, and even transfers to other customers of the bank. Since that time, payment platforms like PayPal and Venmo have emerged as options for bill payment and online purchases that don’t require a credit card or check routing number.

Currency exchange outside of the traditional bank is fast becoming a normal, everyday way to do business. When health care providers and their billing departments take advantage of these digital options, they can save money in printing bills, mailing out statements, and processing paper/check payments.

Online shopping is one place where healthcare providers can learn a thing or two about collecting payments. Most larger retail stores have an online presence. Their brick and mortar stores are slowly losing business to online shopping. This demonstrates that the general public is becoming more aware of the ease of handling things like shopping online, from home.

Printed statements and bills can easily be lost or misplaced, leading to the need to send an account to collections. If consumers received their bills via email, for example, with an embedded link leading directly to their account, they will be far more likely to pay the bill in that moment.

Emerging opportunity

In the retail and hospitality industries, point of sale systems (POS) have been in place for decades. Why isn’t there a POS system for healthcare payments? Are there software options or online platforms that health care systems can use to accept digital payments? Yes, there are. Is this the best option for every health care provider? Maybe.

Before switching over to even a well-known platform for digital payment, each healthcare provider should run a return on investment analysis. If the provider is a single physician working in a rural area, for example, there may or may not be online options that are cost effective.

However, larger healthcare providers, like urban or suburban hospitals, should consider the digital options. Let’s follow the trail of care: patient is seen in the emergency room (ER) for severe intestinal distress. The patient is attended to by a triage nurse, attending nurse, one doctor, and the attending physician. The doctor orders IV fluids, a full panel of bloodwork, and a CT scan. The nurses administer the fluids, the lab does the bloodwork, and radiology handles the CT scan, which is later read by a radiologist. The patient is diagnosed with food poisoning and is released with medications and orders to follow up with the family physician.

So, the hospital will generate bills for nursing care, the doctor who saw the patient, the attending who signed off on orders and treatment, the supplies for IV fluids and bloodwork, lab fees for doing the bloodwork, the CT scan, the radiologist who read the scan, the administrative work (admission paperwork, insurance filing), and charges for any medication administered. That is 9 separate bills!

When you go to dinner in a restaurant with your family and order 9 items, do you get 9 bills? Of course not! POS systems combine all the items into one bill. So, why can’t hospitals and larger care centers do the same? While some hospitals and urgent care facilities are doing better with this (i.e. one bill from the hospital that includes nursing, supplies, and administrative work, one bill for the CT and the radiologist) there is still much room for improvement.

So, the question becomes, why aren’t hospitals and large healthcare facilities taking advantage of such systems? Part of the reason is the amount of time and money it would take to put such systems in place and get them working properly. But a thorough cost-benefit analysis would show that the benefits would outweigh the costs in the long run.

Future  of consumer health payments

For those healthcare providers who are looking to the future, this is an area of administration that can become less costly and more profitable. Instead of having to pay 20 people to open mail, process payments, and send out receipts, a facility could have just 5 people who monitor overdue payments and keep accounts updated as new charges come in. The salaries of those 15 people you no longer need could equal a savings of up to $500,000 per year.

It is also important to consider the consumer. An ER or hospital visit is costly, even with insurance. If a patient has to deal with 9 bills, as in the above scenario, and cannot afford to pay any one of them off right away, then 9 billing departments are now either sending 9 accounts to collections (which costs the provider more money) or having to set up 9 separate payment plans for the consumer.

If there was a single bill, the consumer could make monthly payments on one account, meaning every department would be receiving a payment every month. When consumers have multiple payment plans, they sometimes must choose what will get paid in a given month and one or several departments will not receive any money.

Healthcare payment systems need to take advantage of the digital payment revolution. POS systems, combining billing across departments, and using online payment platforms will give health care consumers an easier, more simplified way to pay their bills, and help providers save money in administrative costs.