Healthcare costs and healthcare payments are closely tied, but worlds apart.
As the COVID-19 episode slowly winks out (for now), hundreds of millions of Americans are confused, paying higher premiums and copays and getting refunds slowly, if at all. And yet, they are more aware than ever of the importance of the healthcare system and their need to access it. For many, it’s very difficult.
Curing payment pains associated with complicated medical billing gets to the heart of how payments technology is moving medical money in smarter, faster ways. In PYMNTS’ latest Faster Healthcare Payments Report done in collaboration with Mastercard, the healthcare landscape gets a good going-over, from consumers managing the cost of pharmaceuticals to healthcare providers plugging up payment leaks and becoming more efficient.
“Digital disbursements and other new payment strategies and technologies are reshaping the medical and pharmaceutical industries as service providers look to ease patients’ prescription payments. Paper checks may become a thing of the past if healthcare’s trend toward modernization continues,” according to the new report.
Real-Time Payments Get Healthy
Despite widespread efforts to malign the paper check, it’s still a staple in healthcare payments and a prime cause of slow-moving money.
With a brutal shove from the pandemic, more healthcare organizations are now onboarding with digital platforms and solution providers to digitize and speed up the flow of funds.
“Issuing patients’ disbursements via paper checks often creates problematic experiences for recipients, as checks can easily become lost or stolen,” Mastercard‘s Senior VP of Digital Payments Silvana Hernandez told PYMNTS. “Those that do arrive properly often take a long time to travel through the mail, which can create entirely new issues,” she said, adding that “The healthcare sector is still clinging to such legacy methods.”
Some researchers estimate that Americans left close to $40 million of healthcare refunds and rebates in the form of paper checks unclaimed between 2012 and 2019, illuminating inefficiencies around healthcare’s rigid billing and payments systems.
“Interest in real-time payment rails had been growing even before the pandemic added financial strains that made waiting for payments especially painful,” according to the latest Faster Healthcare Payments Report. “A report estimated that the share of real-time medical payments made by insurance plans and healthcare providers will increase at a 100 percent compound annual growth rate (CAGR) from 2018 to 2022.”
As the report noted, “[online] bill payments currently made to providers and payers via automated clearing house (ACH), check and debit cards are particularly likely to be replaced by real-time methods by 2022.”
Pushing Past Paper
Whether it’s the astronomical price of pharmaceuticals or the colossal cost of surgeries and hospital stays, the post-pandemic world demands faster payment options. This is an area of intense interest among digital solution providers looking to take the sting out of medicine.
Swift digital push payments haven’t seen much adoption across the healthcare sector, Hernandez explained in a recent interview with PYMNTS. Lack of awareness surrounding available digital payment solutions, as well as the effort required to update legacy infrastructure and practices, could be holding back the healthcare industry from modernizing payments.
“[One barrier to adoption has been that] healthcare is a complex, highly regulated industry,” Hernandez noted. “These industries are a little bit slower at adopting innovations because their systems are older and difficult to change. They were not born digitally — it’s a transformation they need to go through.”
“Paper check disbursements still dominate the healthcare industry, but payment solutions providers are already working toward a shift,” the report states. “Fast, digital transfers can reduce strains on consumers’ household budgets, and the easier solution providers can make the adoption process, the more likely the medical sector will change its ways. Improvements could result in consumers feeling providers care not just for their health and wellness, but also for their wallets.”
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Photo courtesy of: Pymnts.com
Originally Published On: Pymnts.com
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