To Fix Patient Payments, Include Consumers in the Consumerization of Healthcare

The business of paying for healthcare hasn’t been taking care of itself as an industry when it comes to joining the connected economy — or even taking precursory steps to do so — but that’s changing fast.

As it did in so many other areas, the pandemic cast a somewhat harsh spotlight on how antiquated the system is — and the problems that it causes. Recognizing that banking customers in the healthcare space were feeling pain from the disconnect, Bank of America (BoA) acquired the AxiaMed payments solution in early 2021.

AxiaMed co-founder Kevin Kidd is now senior vice president and executive lead, healthcare strategy at BoA, the nation’s second-largest bank, where he’s helping lead the charge to modernize healthcare payments.

Seeing inefficiencies everywhere in his past life as a lawyer with healthcare providers and healthcare IT clients, Kidd told PYMNTS’ Karen Webster, “That was the birth of the initial business idea for AxiaMed. What I saw was the fact that the healthcare providers were using healthcare software systems that often didn’t have good consumer payment technologies built in. There are a lot of reasons for that.

“Healthcare is typically slow to adopt new technologies. It also can be slow with adopting new processes.”

Like the proverbial frog sitting unaware in a pot set to boil, the problems arose almost imperceptibly over decades as more health cost obligations were shifted to patients.

“Originally, patients were only paying a very small part of the overall payment,” he said. “Since the collections process and the technology were so time-consuming and costly, providers weren’t as focused on collecting the payments, since the effort wasn’t worth the small amounts they were owed in the past.”

It was also shortsighted.

Joking that he recently received a paper refund check from a health system totaling $1.37, Kidd said, “It took them a year to figure out that they owed me money. Then they sent a check in the mail for $1.37. It probably cost them $20 to send that check. Today, patients pay a much larger share of the overall healthcare costs and therefore, providers are more acutely aware of the inefficiencies caused by an outdated payments infrastructure.”

Moreover, he said, “Providers are now more reliant on getting paid by the patients in order to meet their margins while providing the right level of care. Technology is catching up for providers to basically collect from patients, but there’s still a long way to go.”

See also: Healthcare Payments Get Patient-Centered Overhaul in 2022

Curing Payment Experience

The patient-as-payer model is giving rise to the much-discussed consumerization of healthcare, which went from buzzword to best practice as fast as you can say “novel coronavirus.”

With BoA having many clients across the healthcare spectrum, Kidd said there’s a more serious push to embrace consumerization by providers and payers, including hiring executive leadership focused on the patient experience and consumerization.

Noting that simplicity is a prescription for painless payments, Kidd said that healthcare providers playing debt collector could leave a bad taste in patients’ mouths.

“We’ve all had that experience where we have an appointment or procedure and we have no idea what we’re going to pay,” Kidd said. “We make some level of payment at the office, but we don’t exactly know how much it’s going to cover. We receive a bill from the provider and an EOB [explanation of benefits]. They don’t match.

“We even get another bill after we’ve paid an amount, and we owe more. Then after we pay the larger amount, we find out that [we’re owed] a refund and we can’t get paid very well.”

BoA’s AxiaMed payments solution is an open, integrated payment platform that software partners can use to integrate omnichannel payments into their electronic health record (EHR) and billing applications.

“When a patient comes in, or even when they schedule, there are partners of ours that can take in some data as to why the patient is going to see the provider and it can provide an estimate of what they’re going to owe,” he said.

With PYMNTS’ research finding a clear correlation between cost unknowns and patients foregoing care, accurate estimates are a big deliverable for many stakeholders post-pandemic.

See also: 33% of Consumers Have Opted out of Needed Medical Care Over Cost

Payments in the Flow

Among the changes making patient payments less painful are new integrations with platforms like BoA’s new healthcare payment solution ecosystem and others that produce estimates and handle payment options.

For example, platforms including the AxiaMed payment solution and various software partners allow providers to have a card on file with patients.

“If, after finally adjudicating a claim, they find out that a patient actually owes $100 more, a provider could use that card on file to automate a payment for the patients,” he said. “They don’t have to reach out to the patient; the patient doesn’t have to send a check or anything like that.”

Payment plans and installments are also gaining popularity in the sector.

Kidd told PYMNTS he sees “more requests on the provider side for some type of integrated patient financing solution and/or payment plans. We power payment plans and also integrate to patient financing solutions for our providers. We allow them to utilize those integrated in their workflow. If a patient can’t pay, they have some way of going ahead and getting the care and financing over time with a third party.”

While he doesn’t see a year of “huge breakthroughs” for 2022, there’s much activity in connecting patients, providers and payments in ways that benefit all via mobile and data … particularly around patient engagement.

“I’ve seen a big pickup with that, and I think that type of thing will certainly continue to grow,” Kidd said.

See also: Healthcare Providers Use ‘Deep Data’ to Deliver Better Patient Outcomes