How Much Can Technology Improve Healthcare Payments?

Among the latest hopes for healthcare payments is blockchain.

Touted by observers and industry players as one of the top trends that could impact medical billing and data management for 2018, the technology is increasingly being viewed as part of the path to better efficiency in payments. For instance, ConnectingCare, a company that helps far-flung practitioners view patient data across different points of care, wants to use blockchain for cost forecasting and to enable direct pay options for healthcare bills.

More than 60 percent of patients in the United States do not pay the entirety of their medical bills, according to a recent study from TransUnion, which helps in the collection of those debts. That figure could rise to 95 percent by 2020.

Granted, some consumers don’t always know how much they actually owe — the confusion is sparked by the various insurance and physician documents going back and forth and is heightened by the delay in getting bills to new addresses and other factors — and medical costs are often further down on the list of debts to pay, after more vital expenses such as car and house payments. But that’s not stopping payment and commerce players from trying to use technology to bring more efficiency to the system.

Perhaps the most famous example, at least in a general sense, is the healthcare venture backed by Amazon, Berkshire Hathaway and JPMorgan Chase to launch a company that would reduce healthcare costs, among other goals. To achieve that, the collaborative — which still lacks a CEO — will create a constraint-free independent company that isn’t focused on profit-making incentives.

Another large, if relatively indirectly, effort toward better healthcare payments came from the Electronic Healthcare Network Accreditation Commission, or EHNAC. The group recently launched its Trusted Exchange Accreditation Program to “leverage existing industry-wide identity verification, authentication and privacy/security frameworks and best practices in use across the ecosystem,” according to a press release. The program could eventually lead to a better payments regime for healthcare providers.

More directly, some companies are striving to improve the healthcare payments system by providing better information — or, if you prefer, reminders — to patients still paying off their hospital and doctor bills. For example, ScrubPay, “provides SMS and email notifications when your next payment is due, taking the worry out of paying your medical bills on time and allowing you to better manage your healthcare expenses,” the Atlanta-based company said in a statement. The firm’s technology also enables patients to work with providers to come up with flexible payment plans, and do so via a mobile app.

No matter the technology, companies hoping to make profits in healthcare payments have a tough road. Numerous researchers have shown that consumers do not treat medical debt the same as credit or debit card debt, or other forms of outstanding bills. One reason involves incentive: A rule that took effect last year requires the three main credit reporting agencies to wait 180 days before putting unpaid medical bills on credit reports.

“It’s a big deal,” Matt Schulz, senior industry analyst at, told Time. “It builds time into the messiness of getting insurance claims taken care of.”

Additionally, younger consumers seem less enthusiastic about settling up with healthcare providers than do older patients. TransUnion found that in 2016 — the most recent data available — almost 75 percent of millennials did not pay their medical bills in full. That compares to 68 percent of Generation X consumers and 60 percent of baby boomers. In 2014, 68 percent of millennials failed to pay the full amount of their medical bills, a sign that the problem is getting worse for those charged with recouping expenses.

“It’s worth noting that millennials came of age during the 2010 Patient Protection and Affordable Care Act (ACA),” said a report from insideARM, which focuses on the collections industry. “Among other things, the ACA mandated health insurance, and it also allowed young adults to stay on their parents’ insurance plans until age 26. As millennials face the harsh reality of skyrocketing medical costs and skimpy paychecks, other expenses are simply coming before paying their medical bill balance.

That suggests that technology has its limits — no matter how new or disruptive the technology, there are forces involved in healthcare payments that go beyond software or digital channels. Besides blockchain, in fact, another big trend for 2018 in medical billing is getting better coding, which would reduce the number of mistakes that can lead to incorrect and delayed payments. As much as 80 percent of medical claims submitted to insurance companies included mistakes estimated at $68 billion, according to Practice Management Institute.


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