4 Digital Principles Help Patients Understand Financial Responsibility

The disconnect between how providers bill and how consumers want to pay contributes to the likelihood that many patients will take more than 30 days to pay their bills.

Trends in the healthcare industry are clearly and overwhelmingly demonstrating that consumers owe more for medical services. Overall, consumer out-of-pocket spending in the industry is growing rapidly, from $416 billion in 2014 to an expected $608 billion by 2019, according to the Kalorama Foundation.

However, education and outreach to consumers regarding healthcare payments have hardly kept pace with the increase in payment responsibility. As a result, 72 percent of consumers are confused by their explanation of benefits (EOBs), and 70 percent are confused by medical bills, according to InstaMed’s Trends in Healthcare Payments Eighth Annual Report: 2017 . This confusion results in a widening divide between healthcare organizations and the customers they serve.

It would be easy to assume that pouring resources—such as signage, staff outreach, and brochures—into educating consumers is the answer to solve this confusion. In a time of tight margins and shrinking budgets, providers must seriously consider what sort of return would result from such an investment of time and money. Will consumers be receptive? If they are, will it even make an impact? Unfortunately, probably not.

Instead of taking on the heavy burden of educating consumers about healthcare payments, providers can embrace best practices and tools from the digital world to help consumers better understand and navigate their payment experience. For providers that are not sure whether the digital world applies to their customer demographic, consider that while mail volumes have declined by five billion pieces in 2017, digital transactions accounted for 60 percent of all transactions when consumers were asked how they made purchases in the previous 10 days, according to a Kleiner Perkins trends report.

Here are four principles for harnessing the power of the digital world.

Consumers don’t want paper. In 2017, 79 percent of consumers reported receiving paper medical bills, but only 21 percent of consumers want to use paper checks to make their healthcare payments, according to InstaMed’s report. The disconnect between how providers bill and how consumers want to pay may be a major contributor to why 73 percent of providers report that it takes longer than 30 days to collect.

Despite these trends, eliminating paper statements isn’t necessarily the answer. Statements can be powerful tools in helping consumers understand and fully adopt the digital payment options offered by providers. A streamlined statement design that removes payment coupons and clearly promotes e-statements and online payments will leverage an established touchpoint to make that digital connection.

Consumers are always connected. Proof of the digital world’s reach is best demonstrated by the 77 percent of American adults who report being online daily and the 26 percent who are online constantly, according to the Pew Research Center. This persistent online connection frequently shapes how they make payments, including their common household bills. When asked how they normally pay their monthly bills, 63 percent of consumers said they go online to pay, according to InstaMed research.

Based on recent sentiment data in the research, consumers want online healthcare bill payment options too. More than half said they want to pay medical bills through an online payment channel.

Although providers can offer standalone online payment portals to satisfy this demand, the data also tells us that integrating payments with existing online portals, such as health plan member portals where consumers already go to make healthcare payments, such as premiums, greatly expands the digital touches providers have with consumers. Consumers do want this option, as 71 percent said they wish to pay all of their healthcare bills in one place.

Providers Primary Sources for Collecting Patient Payments

Source: Trends in Healthcare Payments Eighth Annual Report: 2017 , InstaMed. Used with permission.

Consumers want mobile. The digital world is made possible in large part to the proliferation of mobile devices among consumers, most notably the smartphone. For the 77 percent of Americans who own smartphones, access to the digital world is always at their fingertips. Smartphones are no longer a technology reserved for younger generations. When the ownership data is broken out by age brackets, smartphone ownership is strong across all demographics—even in the over-50 age group, according to the Pew Research Center.

The data demonstrates that consumers want a mobile experience in healthcare, too. Most notably, 80 percent of consumers want to check in for a provider visit on their secure mobile devices where they can control their healthcare experience from the beginning. This includes understanding their payment responsibilities up front and saving payment cards on file for future payments—all from a mobile app at provider check-in. These can be standalone apps just for a providers’ customers. However, as demonstrated in the data above, consumers prefer a streamlined approach to their healthcare payment experience, as 65 percent of consumers would download a mobile app to pay all of their healthcare bills, according to InstaMed’s report.

Consumers want automated payments. Digital wallets allow consumers to save payment information on file for future and recurring payments, ensuring convenient and simple payment experiences for all transactions. These can also greatly expand the digital payment functionality offered to consumers.

For example, automatic payments leverage saved payment methods to collect as soon as a balance is due with minimal or no consumer interaction. This guarantees provider payments while removing the hassles and costs of traditional consumer payment methods, which is especially helpful for smaller balances. Automatic payments are growing at an impressive rate of 196 percent per year, according to data on the InstaMed Network.

Automatic payments also can help consumers facing higher expenses by scheduling payments over time. This is especially crucial for the 81 percent of covered workers in 2017 who had to meet deductibles before their health plans covered most services, a statistic reported by the Kaiser Family Foundation.

With payment plans, providers have a way to ensure payments for their services without multiple paper statements and staff follow-ups. This is similar to how many retail giants allow consumers to pay without interest over time for bigger ticket items such as appliances. Approximately 75 percent of providers surveyed offer payment plans at their organizations, according to InstaMed research.

Incorporating digital strategies into the revenue cycle process increases timely patient payments. In addition, because most consumers desire the convenience and flexibility of online options, offering services like mobile payments and portals raises patient satisfaction. The use of technology also relieves some of the patient education burden about their financial responsibilities, as online options are often easier to understand and offer immediate responses to patient questions.

Chris Seib is chief technology officer and co-founder, InstaMed.