B2B Payments

The Pain Relievers And Remedies For Health Care Treasury


The health care sector is one with some complex, unique challenges when it comes to B2B payments. Just ask Capital One Bank’s Treasury Management Group, which recently published the findings of a survey on accounts payable and corporate payments trends in the health care sector.

According to the study, which was conducted at last year’s American Health Care Association and the National Center for Assisted Living’s 66th Annual Convention, the majority of health care companies are looking to upgrade their AP systems this year — 63 percent of those surveyed, in fact.

That figure becomes even more significant when placed against the finding that more than half (58 percent) also said that, in the last few years, their companies had already made moves to upgrade their accounts payable processes.

According to Capital One Bank Executive Vice President and Head of Treasury Management and Enterprise Payments Colleen Taylor, these findings are indicative of the health care industry’s overall embrace of more strategic, robust payment solutions.

“As payments technology continues to advance in the health care sector, we fully expect organizations to implement improvements as needed, whether it be to automate the accounts payable process entirely, leverage commercial card usage or improve data analytics,” Taylor said in a statement.

The Pains Of Health Care Payments

Despite the forecast, the ability for the health care industry to actually implement those stealthier payment technologies and treasury management systems is a challenge, said the bank’s executive vice president and head of treasury management for the bank’s product management and innovation group, Patrick Moore.

“Managing payments across the various health care businesses, such as senior living facilities, hospitals or individual providers, in the health care field can be cumbersome and lead to inefficiencies and increased costs,” Moore said in a recent discussion with PYMNTS. “Some may have very limited staff — for example, in a senior living facility — and the primary focus should be on caring for the patients, not spending time figuring out cash flow, processing checks and paying vendors.”

That doesn’t mean these businesses aren’t interested in improving cash management processes, however.

According to the Treasury Management Group survey, more than half of the health care professionals surveyed said that they would like to see investments in AP processes go to building up their data aggregation and analytics capabilities.

A Remedy For Friction: The Commercial Card

Moore pointed to some tools that the health care industry has already adopted in pursuit of improving the AP process.

“The health care industry has been an early adopter of commercial cards, particularly virtual cards, with their one-time card numbers, coupled with fraud defenses, which make this type of commercial card one of the most secure transaction channels,” he said.

[bctt tweet=”‘The health care industry has been an early adopter of commercial cards.'”]

Indeed, Capital One’s research supports the conclusion that the health care sector embraces the commercial card and that fraud protection is high on the priority list when it comes to deciding what to implement in accounts payable.

More than one-third of respondents said they prefer to use a commercial card over another payment method because of the control it offers over spending, as well as the security it provides.

When it comes to introducing new technologies and AP processes, investing in risk management and fraud protection were high on the list of where these professionals would like to see their company’s focus, more so than other factors, like mobility and cloud computing.

Moore expressed the ability for the commercial card to relieve some fraud concerns that health care professionals may have.

“Commercial cards afford the health care provider the ability to control credit lines and set credit limits and restrict spend to certain merchant types,” he said. “This control makes commercial cards one of the most secure ways of delegating spend to employees.”

Naturally, these features mean additional benefits, like spend management and more efficient digital payments.

According to the bank’s survey, 27 percent of respondents said that accounts payable efficiencies were their top motivation behind using a corporate card product, with 21 percent naming cost reductions as their main reason.

“Using commercial cards can provide multiple benefits by allowing a company to stop or reduce the use of costly and time-consuming checks,” Moore elaborated. “Additionally, card programs increase transparency, control and security. They can also lead to opportunities for more efficient supply chain management, such as consolidating relationships and working with preferred vendors, receiving discounts and taking advantage of flexibility in payment terms.”

The Unique Ailments Of Health Care 

The benefits of using solutions like commercial cards and virtual cards can be realized by many sectors — everybody wants safer, more efficient payments processes, after all.

But Moore explained that the health care community is particularly challenged in ways other markets may not be, leading AP professionals in this space to pursue solutions that can come from card products and other treasury management technologies.

“The rising costs of health care, along with recent Medicare and Affordable Care Act changes, have created a need for organizations to streamline their operations, use better technology and find new areas to cut costs,” Moore said.

[bctt tweet=”‘The rising costs of health care created a need for organizations to streamline operations.'”]

But unique hurdles can mean health care may benefit even more from easing treasury management friction and getting on board with new payment efficiency methods. And that, said Moore, can be good news for everyone.

“Health care, in particular, is an industry focused on driving efficiency and reducing cost,” added Moore. “This, coupled with the technology build, suggests health care can be — and should be — an early adopter of this innovation. Moreover, with the advent of Big Data and the focus on analytics, health care is uniquely positioned to not only benefit from, but drive, where and how banks are investing in this domain.”


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