Deep Dive: How Digitizing B2B Payments Can Power Healthcare Providers’ Telemedicine Transitions

Healthcare providers have faced new obstacles to serving patients during the pandemic as many are thinking twice about visiting doctors’ offices in person. Treating these patients safely and conveniently may require hospitals and clinics to think more broadly on how to reach them in their homes. This is leading many providers to turn to telemedicine offerings that help support remote care.

Healthcare organizations appear to be responding to pandemic pressures by adopting software that helps staff communicate virtually with patients and collaborate with one another. Digital tools that enable organizations to work more efficiently may also come into high demand among hospitals and clinics that are dealing with worsening financial strains. Many of these organizations’ budgets are affected by the delay or cancellation of revenue-driving elective surgeries to keep beds open for COVID-19 patients.

Medical providers will therefore need to secure digital tools from software vendors to offer virtual patient services and streamline internal operations. These organizations must carefully choose which payment options they use when purchasing tools from vendors to create smooth B2B transactions. This month’s Deep Dive examines how the pandemic is pushing healthcare providers to procure more software solutions and explores how financial constraints could encourage greater card use over checks for B2B payments.

Doctors Go Digital

Hospitals and healthcare clinics are becoming increasingly interested in how digital tools can help them serve patients during and after the pandemic. These tools can offer methods for reaching consumers who prefer to social distance, and some organizations believe that the convenience of telemedicine and other remote services will enable them to deliver better care to patients who may be reluctant to arrive in person at their doctors’ offices, regardless of the pandemic.

A December 2020 survey of 250 U.S. medical professionals found that 86 percent believed digital platforms improved their abilities to serve patients, for example, and 68 percent expected such platforms to remain in use post-pandemic. Providers are using the tools to deliver care remotely and to support their work in various ways, such as by giving medical professionals easy access to patients’ medical histories.

The Financial Picture

Healthcare providers may be concerned about how to best pay for these technology upgrades, as the public health crisis has left many businesses concerned about cash flows. A recent report found that organizations took in about 2 percent less revenue from providing healthcare services during the first three quarters of 2020 than they did during the same period in 2019. This finding contrasts with the 5 percent year-over-year rise in healthcare services revenue seen from 2018 to 2019. Such trends could be a wake-up call for the industry, given that healthcare costs typically “rise faster than inflation and have even grown during past periods of economic downturn,” the report said.

Other findings similarly indicate that hospitals’ operating margins dropped 28 percent year over year from January 2020 to July 2020 when taking into account federal relief aid. Hospital operating margins were down 96 percent if federal relief funds are left out of calculations. This kind of financial strain makes healthcare providers more focused on their cash flows, even as they look to procure new digital technologies. Providers may be able to ease these cash flows in part by adopting digital tools that support their accounts receivable (AR) processes alongside those that deliver telehealth.

AR automation solutions can be particularly meaningful to healthcare providers that are struggling to get paid faster and streamline their collections while coping with downsized workforces. Recent PYMNTS research found that 38 percent of healthcare sector respondents say that AR automation tools enabled them to improve their days sales outstanding (DSO), while 71 percent said it enabled their teams to be more efficient and 74 percent reported operational cost savings.

Healthcare providers can spend considerable time and effort processing paper-based patient payments and thus may find it important to encourage them to pay digitally instead. Providing payment portals that allow customers to use digital methods like credit cards can go a long way toward encouraging patients to shift away from paper-based transactions to electronic ones and could help boost satisfaction for customers who prefer those methods.

Leaving Paper Checks Behind

Healthcare providers are likely to want to use digital methods to make payments as well as to receive them. Many B2B payments still involve paper checks, as 42 percent of supplier payments were made this way in 2019. This method has its drawbacks, however. Using paper checks forces payers to spend on materials like postage and envelopes as well as designate staff to handle printing processes, wasting precious time and resources. Healthcare providers may be able to transact more efficiently and cost-effectively with their software vendors by using digital payment instruments that spare them from these costs and manual processes. Credit card and virtual card payments can offer a swifter, digital alternative and also bring budgetary benefits: Many cards provide cash back rewards — a helpful perk for providers.

Hospitals and healthcare clinics are adjusting their approaches to meet patients’ needs for socially distant treatments, and adopting and upgrading software solutions can help organizations rise to the occasion. Healthcare providers have their own budgetary concerns to be mindful of when transacting with software vendors, and moving beyond paper check transactions in favor of B2B card payments may prove to be just what the doctor ordered.