Consumer sentiments show the demand for contactless experiences that are also digital and convenient has been on the rise for years, and 2020 might be the year where the importance of this rising demand was fully realized.
According to the Trends in Healthcare Payments Eleventh Annual Report, there is a troubling disconnect between consumer expectations and payment realities in healthcare. In this year’s report, a large portion of providers are once again missing the correlation between the patient healthcare payments experience and overall patient loyalty and satisfaction. Legacy processes that depend on staff intervention and paper statements continue to dominate the industry. This persistent oversight puts patient loyalty and satisfaction at risk for provider organizations.
Providers who already faced payment challenges now confront new ones, due to effects of COVID-19 on their revenue. The financial losses for providers this past year were massive, stemming from shutdowns related to the pandemic. The focus on recovery will likely dominate budget discussions and provider strategy for years to come.
The pandemic highlighted how much the healthcare industry needs to catch up in the digital world. The word “contactless” is now ingrained in our common vernacular and is expected in every possible consumer experience. Consumer sentiments show the demand for contactless experiences that are also digital and convenient has been on the rise for years, and 2020 might be the year where the importance of this rising demand was fully realized. For providers to rebuild in a post-pandemic future, the benefits of contactless channels will be crucial to cut costs, promote efficiency and improve collections.
Troubling Disconnect Between Providers and Consumers
Year after year, the trends consistently show a disconnect between consumer preferences and their actual healthcare payment experience. For instance, 66% of consumers receive medical bills in the mail, yet only a small percentage want to return the payment through the mail—only 14% of consumers prefer to pay medical bills via mailed paper check. Additionally, 86% of consumers pay recurring bills online, but 58% of providers rely on mailed paper statements to collect.
Many providers still do not see how that disconnect affects their organization, as 42% of providers think collection efforts have no impact on the patient experience. Loyalty to a provider organization may depend more on payments, as more than half of consumers would consider switching providers for a better payment experience.
Consumers are responsible for the cost of provider visits more frequently and for higher amounts than in the past. This trend in payment responsibility stands to further bind consumer loyalty to the payment experience in healthcare, especially as consumers engage with providers for medical bills more often. For providers, the increase in payment interactions can ultimately be an opportunity to avoid patient attrition, as well as increase revenue.
The Financial Impacts of the COVID-19 Pandemic on Healthcare Organizations
The shutdowns and fear of COVID-19 caused a sharp decrease in provider visits, with huge effects on revenue. As a result of the decrease in visits, healthcare spending was down 2% over the previous year, the first decrease in recent years. Even as the restrictions were reduced in 2020, patient volume did not return to pre-pandemic levels as 73% of providers reported a lower volume of patients after initial shutdowns.
The decrease in healthcare spending and lower overall patient volumes put a strain on providers. Many providers reported their primary financial concern was related to the impact of the COVID-19 pandemic on their revenue cycle. Outside funding was critical for many providers to remain in business. The focus on recovery will likely dominate budget discussions and provider strategy for years to come.
Digital Channels and Experiences Are a Key to Recovery
Outside of the COVID-19 pandemic, provider organizations have not kept pace with the digital growth experienced in other industries. Throughout the healthcare industry, paper and manual processes still dominate provider processes related to patient check-in and collections:
The current processes providers use for patient collections require valuable resources. However, that investment does not guarantee that a payment is received. Six in 10 providers report that a balance can take more than a month to collect. Even after a balance is collected, there is no guarantee that the amount owed is the same as the amount paid. Nearly all providers report issuing patient refunds.
Savings await providers who leave paper collections behind and fully adopt electronic payment processes. Even a single visit with fully electronic transactions could offer a significant savings for providers. The potential of electronic transactions should be a key consideration for providers as they rebuild in the post-pandemic future.
Smaller Provider Organizations Benefited from Pre-Pandemic Digital Focus
Payment trends in smaller provider organizations offer hope for what can be accomplished with contactless payment channels. Payment data shows that organizations with 15 or fewer physicians saw growth in contactless payment channels for 2020:
These organizations may have been better positioned for the challenges of 2020 by relying on streamlined payment channels and processes already in place. Both payment channels allow organizations to increase collections with minimal staff involvement and fewer resources, such as paper statements. The efficiency of contactless payments may have attracted smaller organizations needing to increase cash flow without additional costs, even before the pandemic.
Finding the Path Forward to Rebuild
Payment trends in smaller provider organizations offer hope for what can be accomplished with contactless payment channels. This segment of providers saw payment growth in self-service and automated channels, even during a pandemic when non-essential services were closed. The financial consequences of the pandemic will require providers of all sizes and specialties to find remedies for their payment challenges quickly.
The trends indicate that the clearest path forward for providers will be paved with digital, contactless payment and communication channels, which can improve the payment experience and ultimately help providers collect more from patients at lower costs.
Deirdre Ruttle is chief marketing officer, InstaMed, and head of Wholesale Payments Healthcare Marketing, J.P. Morgan Chase & Co.