Healthcare is an undoubtedly complicated space for all the players involved (the providers, insurers, patients, pharmaceutical manufacturers), particularly when it comes to payments. Not an entirely surprising fact, given that it is the collision of two highly specialized and extremely regulated worlds.
The good news, TransCard CEO Greg Bloh noted in a recent conversation with Karen Webster and Mastercard EVP of Digital Payments and Labs Jess Turner, is that progress has been visible in recent years. On the business-to-business (B2B) side of things, payments have improved quite a bit in terms of digitization. Large providers, drug manufacturers and insurance firms have big innovations that are moving them away from checks.
That's not such good news on the business-to-consumer (B2C) or business-to-small-and-medium-sized-business (B2SMB) front, where checks still, more or less, dominate the landscape. The payment flows are often a bit indirect, Bloh noted, such that the disburser is one or two entities removed from the end consumer — making the secure routing of a payment from its source to its proper destination both challenging and slow.
“The way the whole industry has evolved, it is very layered. Having the ability to facilitate getting those payments to the receiver, and doing it in an expedient fashion, is a huge issue in the marketplace," he said.
It’s an issue that TransCard is committed to remediating, in partnership with Mastercard Send. Instead of forcing customers to take checks as their only option (with all the unpleasant waiting that comes with that form of disbursement), firms that work with TransCard will be able to offer their customers instant digital payments — delivered to their debit cards via the Mastercard Send rails.
“Healthcare alone has so many intricate needs that I had no idea about until we dug in,” Turner said of the project, noting that it was exactly the kind of use case the technology was built to tackle. That’s because, when a customer is dealing with the healthcare system, worrying about how to receive the payment is likely their least important concern.
Cutting The Clutter Out Of The Process
While from a consumer standpoint, the payment process in healthcare might look like a payor cuts a check and a payee gets it in the mail, Bloh noted that the process is rarely that simple. In between the decision to pay and the customer getting paid, there is “a lot of back-and-forth verification of information, and packaging and sending out supplementary data like explanation of claims or documentation.”
It’s a complex transaction, and partnering with Mastercard to tap into Send allows TransCard to cut much of that complexity out of the flow for any of the common payments in healthcare, like claims payouts, rebates and incentive programs. Instead of that entire verification process, Mastercard can easily and directly verify consumers via their debit card numbers — thus, making it possible for the disbursers to push funds immediately.
“One of the big concerns with the corporations we deal with is security, and how do you know that the person getting the funds is the person who is supposed to be ultimately getting the funds,” Bloh explained. “This is where the networks have a big advantage, because of the verification system[s] they have built in. To be able to not just move money, but also validate it in between is a massive offering.”
Moreover, the consumer isn’t handed a complicated or onerous validation process — they aren’t digging around for a credential or trying to find an account number. It’s a good experience, an experience the customer is familiar with and trusts. They pull out their wallet, enter their debit information and the funds flow directly to the account associated with it.
Plus, that process can happen for both smaller payments and much larger payments, and “you have a requirement to really understand where the funds are going and where they are coming from,” Bloh said.
Customers, he added, are under no obligation to choose this method. If they prefer, they can stick with the check. However, what TransCard has tended to see so far is that, when people are offered the option to be paid now, they generally take it.
A reality, Turner noted, that the team at Mastercard Send has observed in many more verticals than healthcare.
The Foundation For Innovation
Healthcare, she explained, is not a place where consumers are particularly excited to find themselves — and, generally, they like it even less when money is on the line. Yet, for all the ways it is different (and infinitely more regulated and complex than most other verticals), Turner noted that the needs “go hand in hand with what we’ve seen in places like SMB payments or the gig economy, or in lending.”
The similarity, she explained, is in how opening the door to instant payments can become a launching pad for a host of other innovations within the segment. Payments are powerful motivators, and the ability to tie instant payments to something can often give the initiative built on them a powerful push.
Both Bloh and Turner were tight-lipped on the specific use cases one might observe in healthcare, though both noted they might have a lot more to say on the subject as 2019 rolls on. However, they both agreed that the benefits are a myriad, and will probably be surprising as they come up.
Today, for example, insurance companies can pay out claims to patients or offer them reimbursements. Tomorrow, with the power of instant payments, they could offer direct cash-rebate incentives to go to the gym or reduce one’s BMI.
“This could be a great way to ... influence people’s behavior throughout the year,” Turner said. “The use cases in healthcare are almost limitless.”
Healthcare, Bloh and Turner noted, needs the push. Though its various issues and difficulties can’t be solved by better payment infrastructures and processes, offering consumers and small practices a way to accept payments from large corporate entities that doesn’t involve a multi-week wait period for a check? Well, that’s certainly a step in the right direction — and every turnaround starts with making many of those.
That's because, as Bloh noted, instant payments in healthcare make life easier and more transparent for everyone involved — and good experiences are a breeding ground for other, better experiences. That, Turner agreed, is exactly the experience Mastercard Send was designed to support.
“We have the technology — it’s scaled, it’s here and now we have to find a way to help people with it,” she said.