Payments Innovation

How To Fix Healthcare Payments

Back in the good old days of healthcare, the employer paid for all (or most) of the freight, and the out-of-pockets for consumers were tiny — about 5 percent. When patients didn’t pay (and many didn’t to the tune of $60 billion in write-offs annually), it was an annoyance, but not always a showstopper for providers.

However, it’s becoming a showstopper. On average, patients now pay 20 percent out of pocket on top of deductibles that hover around $1,800 annually, growing to 30 percent over the next few years.

In the latest Topic TBD, Bill Lodes, EVP of strategy at payment systems provider First American, told Karen Webster that providers have a different incentive to not only fix healthcare payments, but improve delivery models and billing practices.

 

Telemedicine, Portals And Recurring Payments

Lodes said that the models of delivery are changing, where traditional management plans are no longer the only options. For one, there are now concierge models, where physicians charge fees to patients on an annual or monthly basis and patients have 24-hour access to their providers. Think of it as more personalized medicine, where the appointments last well beyond mere minutes as they did in the past.

Another option is, notably, the rise of telemedicine, which connects providers and patients through apps and websites — with the convenience of saving time, and perhaps best-suited to basic health issues.

There is also the self-funded model, where employers provide healthcare benefits to employees using the company’s own funds and must assume the direct risk for paying the claims. Here, the onus is on the patient to do research, to find the provider of an MRI, for example, that can be cheaper than the one down the street.

The overarching mindset is one of saving time and costs.

The shift to those models demands a shift in how payments are collected, said Lodes — no easy task in a system that is hardly known for its tech advances. No longer can they rely on collecting payment at the time the patient is in the office, especially if there is never an in-office visit in the first place.

“Now, patients and providers are responsible for … having to make a one-time payment or set up a payment plan,” he said. For the providers, he added, “to manage the process with a legacy system is difficult.”

As the newer healthcare provider models offer a more immediate environment for scheduling appointments with doctors, getting seen (whether in person or online) and having treatments or prescriptions rendered, the push for providers to get paid is more immediate as well, said Lodes. Companies, such as First American, are being enlisted to address the upfront costs of it all when it comes to payments, including the credit card and ACH payment.

Lodes noted that  at least for now  there is still, of course, room for the traditional in-person visit.

“Where we stand today [is] still in the early stages,” he said of the transition. “Certainly, we see a fair share of doctors who have researched these models, have spent the time taking a look into the pros and cons of this model and have been setting up those practices, limiting the numbers of the folks that are in that practice and charging that monthly, reoccurring fee.”

New Patients, New Ways To Pay

The creakiness of those legacy systems, said Lodes, is exposed more fully in an age where more patients, hailing from Generation X, are making payments of all types from their mobile phones.

“They want to make payments right away,” said Lodes, shedding light on the traditional push and pull of payments in healthcare, where payment might be rendered before or after a visit or procedure, and all of it dependent on the plan the patient is on.

However, uniformity is needed  as to what is to be paid, when and even how. This transparency can be aided with new payment options, such as financing that can be wrapped around the service at the time of rendering.

Addressing The Pain Points (Even While Managing Pain)

“With more sophisticated plans coming into play, [they need] to be more upfront with the patient as to how much they are going to be responsible [paying] for that procedure,” Lodes said.

This suggests that there may be other models that need to be wrapped around that service, with such financing options as payment plans, recurring transactions, and setting up the ability to store credit cards and pay securely in a manner that meets payment card industry (PCI) compliance requirements.

“I think this is going to become even more prevalent in the future as we go to some of those newer models,” he said.

Clearly defined payment terms also include tracking the balances that can change across each stage of a procedure, and can be addressed with a card on file, for example. Automating and recurring payments helps ease the paper chase, the billing and non-billing paper statements that are sent to patients post-visit, which are done manually and inefficiently.

“There are people coming into the marketplace [who] are providing those types of technologies that allow some of the legacy players to catch up and offer those [portal experiences] on your iPhone or Android,” Lodes told Webster.

However, as the transition toward tech-based healthcare marches on, there will be a continuing need for companies like First American “to provide those technologies,” he said, “to make it easier for the patient to interact back and forth with the doctor and their insurance company.”

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