Quarter 1 2019 - Volume 24, ISSUE 1

Picture This: Mobile Payments
Remove Billing Inefficiencies

The inefficiencies and costs associated with paper billing
are obvious.

By Deirdre Ruttle

The digital revolution is in full swing, as paper processes disappear across industries. Mail volumes declined by 5 billion pieces or almost 4 percent in 2017, according to the United States Postal Service. Online shopping increased six times faster than brick-and-mortar shopping during the 2017 holiday shopping season (First Data), while a record 7,000 retail stores closed or were set to close in 2017 (Fung Global Retail and Technology). The world we live in is being shaped by tech giants like Apple, Amazon, and Uber who are giving us access to more and more at our fingertips. Yet, the healthcare industry has somehow managed to resist the digital revolution and continue to rely on inefficient paper processes.

The Healthcare Paper Problem
Paper seems to be everywhere in healthcare. There are an estimated 3,000 printed pages per consumer healthcare record (AthenaHealth). The industry’s paper problem runs particularly deep in healthcare payments, where every touchpoint is dominated by paper as the primary form of communication, including paper medical bills to patients. Fifty-eight percent of providers reported that paper statements were the primary method of collecting from patients (Provider Healthcare Payments Survey 2017). Yet, 41 percent of providers have not changed their patient statement in over five years (Provider Healthcare Payments Survey 2017). The reliance on an outdated way of billing may be a major contributor to why 73 percent of providers report that it takes longer than 30 days to collect from patients (Provider Healthcare Payments Survey 2017). Paper can make payment processes take weeks and months, when they could take days, hours, or even just a few seconds.

The inefficiencies and costs associated with paper billing are obvious when considering the time it takes for paper to travel in the mail and the cost of stamps and paper envelopes. However, a less obvious but significant cost results in the frustration and confusion consumers experience with paper bills. While 79 percent of consumers still receive a paper medical bill, only 21 percent of consumers want to use checks to make healthcare payments (Consumer Healthcare Payments Survey 2017). Additionally, 70 percent of consumers are confused by their medical bills (Consumer Healthcare Payments Survey 2017). Consumers who cannot pay how they want and are confused by their bills may respond in a few different ways: 1) they will call the provider or billing service to ask questions about their bill; 2) they take longer to pay the bill because they have to go through the effort of locating their checkbook and purchasing a stamp; 3) they may ignore the bill altogether because they don’t understand what they owe or how to pay. Each of these options leave billing services spending more time and money trying to collect from confused and frustrated consumers.

If healthcare were to fully embrace the digital revolution for payments, billing services could have the dual benefits of reducing overhead costs and staff time spent on inefficient paper processes as well as guarantee more payments collected. Meanwhile, consumers could finally manage their payments how they know best—electronically and automatically.

Consumers Want Digital Experiences in Healthcare
Online payment options allow healthcare organizations to offer a convenient payment experience to consumers similar to the ones they encounter in other industries. In fact, when asked how they normally pay their monthly bills, 63 percent of consumers said they go online to pay—making this payment channel the most popular among consumers for six years in a row (Consumer Healthcare Payments Survey 2017). Within online payment options, billing services have the opportunity to offer digital wallets and set up payment plans and automatic payments, which ensure payments without mailing multiple statements and interaction with billing staff. Plus, patients prefer to pay this way.

We can look to consumer experiences in different industries with leaders such as Amazon, Uber, or Starbucks as examples for excellent consumer payment experiences. These companies have listened to what consumers are looking for and have created experiences that are positive from end-to-end. But healthcare, of course, is more complex. We must take the best experiences from these brands and modify them to work in the healthcare atmosphere. 

Some of the best experiences from the aforementioned brands involve mobile. There is a consumer demand for mobile experiences in healthcare, too, as shown by the 65 percent of consumers who said they would download a mobile app to pay all of their healthcare bills (Consumer Healthcare Payments Survey 2017).

Mobile Payments in Healthcare
Since 77 percent of Americans own a smartphone (Pew Research Center), many industries have found that reaching consumers through their phones is a way to offer a convenient and frictionless bill payment experience. A new approach that has become common for mobile banking is the ability to take a picture of a bill or check with a smartphone and then automatically pay or deposit that balance in a few easy steps. Paper is eliminated from the rest of the payment process. The consumer doesn’t have to write a check and mail a bill because it is automatically processed through the mobile app.

Billing services can also leverage technology that lets them reach consumers through their phones to reduce the friction in the healthcare payments experience. A photo bill-pay experience in healthcare lets consumers easily make a payment without the hassle of mailing a check. This saves billing services the time they would typically spend processing mailed paper check payments. Plus, mobile payment options offer convenient features like paperless billing that further improve efficiencies for billing services.

As vice president of strategy for InstaMed, Deirdre Ruttle oversees the company’s strategic objectives, corporate brand, and thought leadership activities, including the publication of the “Trends in Healthcare Payments Annual Report.” Prior to her current role, she held leadership positions in product management and marketing at InstaMed, where she worked closely with U.S. payers and providers on launching healthcare payment solutions. She previously held senior marketing roles at alphabroder and Collages.net, where she led marketing strategy to drive use of business-to-business and business-to-consumer e-commerce platforms.