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2 © 2017 InstaMed. All rights reserved.
Consumer healthcare spending
is expected to grow to $608 billion
by 2019.1
of consumersare confused by their medical
bills and EOBs.
page 36
page 30
Source
1 Kalorama Foundation
rank direct-to-consumer solutions as their top priority in 2017.
of payers
of providers report it takes one month or
longer to collect from patients.
page 24
%73
%40
%74
© 2017 InstaMed. All rights reserved.3
All content, including text, graphics, logos, icons, images and the selection and arrangement thereof, is the exclusive property of InstaMed and is protected by U.S. and international copyright laws. No portion of this document may be reproduced, modified, distributed, transmitted, posted or disclosed in any form or by any means without the express written consent of InstaMed.
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Consumers Are Demanding More From Healthcare
Paper Is Hurting All Healthcare Stakeholders
Omnichannel Payments Are Impacting Healthcare
Provider Sentiment
Consumer SentimentPayer Sentiment
Executive Summary
Healthcare Data Is Under Attack
Contents
44 Conclusions
4 © 2017 InstaMed. All rights reserved.
Healthcare in the Spotlight
Healthcare was front and center in the
news in 2016 as the country ramped
up to the November election. Each
candidate campaigned on the future
of healthcare in the United States. For
all the attention healthcare gathered,
there was no indication of a shift in
the trend towards consumerism or any
overwhelming sentiment within the
industry about the election’s impact. In
fact, when surveyed about the impact
of the 2016 election on healthcare, the
response from healthcare providers
was almost evenly split among positive,
neutral and negative.1 The data analyzed
in this report reveals that whether
the American Health Care Act (AHCA)
becomes the law of the land or the
Affordable Care Act (ACA) remains in
place, there are four key areas that
require the industry’s attention.
Consumers Are Demanding More From
Healthcare
The new reality in healthcare is that
consumers not only owe more – in
the form of deductibles, copayments,
coinsurance and health plan premiums
– but the amounts are higher than
they ever have been before. However,
many in the industry are slow to
recognize the new role of consumers
as an industry stakeholder. When
consumer demands are ignored, the
consequences are severe – irreparable
damage to an organization’s brand
resulting in lost patients and members,
and ultimately revenue.
Executive Summary
Sources
1 Provider Healthcare Payments Survey 2016
2016 Trends in Healthcare Payments
Omnichannel Payments Are Impacting
Healthcare
What exactly are consumers
demanding from healthcare payments?
The data reveals that common
assumptions are incorrect. First,
consumers do not view healthcare
as different from other industries.
Second, consumers want multiple
ways to pay all of their healthcare
bills and premiums just as they do
for their household bills – everything
from paying online to making payments
through their bank’s bill payment
site. Third, and most surprising,
consumers across all generations want
convenience through online payment
channels and electronic payment
methods when it comes to healthcare
payments.
When surveyed about
the impact of the 2016
election on healthcare,
the response from
healthcare providers was
almost evenly split among
positive, neutral
and negative.
© 2017 InstaMed. All rights reserved.5
The purpose of this report
is to objectively educate
the market and promote
awareness, change and
greater efficiency.
Paper Is Hurting All Healthcare
Stakeholders
Paper remains ubiquitous within the
healthcare industry. The true costs of
paper are hurting the entire industry,
which continues to be burdened by high
overhead and lack of resources. Forward-
thinking organizations are looking to
the untapped potential of electronic
transactions to streamline and simplify
healthcare payments, as well as satisfy
the consumer demand for convenience
in the industry. The industry needs to go
paperless now more than ever.
Healthcare Data Is Under Attack
Any healthcare organizations unsure
if their data is at risk should assume
the worst. Ransomware is a rapidly
growing threat that has proven to
have the capability to paralyze an
entire organization as seen in the
recent attacks of WannaCry. However,
ransomware is just one of many threats
to data in the industry. The threats will
only grow as the industry attempts to
keep up with the increases in demands
for a consumer-centric, electronic
healthcare payments experience.
Survey of Industry Drivers
The 2016 Trends in Healthcare
Payments Annual Report identifies the
healthcare payments industry shifts
that are business drivers for payers
and providers to make changes to
address consumerism, improve cash
flow, operate more efficiently and
enhance data security. The purpose
of this report is to objectively educate
the market and promote awareness,
change and greater efficiency. These
trends highlight quantitative data derived
from the InstaMed Network and feature
qualitative, proprietary, independently
gathered survey data from healthcare
providers, payers and consumers
nationwide.
Consumers across
all generations want
convenience when it
comes to healthcare
payments.
Any healthcare
organizations unsure if
their data is at risk should
assume the worst.
6 © 2017 InstaMed. All rights reserved.
As consumers owe more in healthcare,
payers and providers are challenged to
adapt to the consumer’s new role as an
industry stakeholder.
TRENDSin HEALTHCARE PAYMENTS
Consumer Healthcare Financial Realities
In 2016, healthcare spending grew
to $3.4 trillion and is expected to
reach $5.5 trillion by the year 2025.1
Much of this growth has been and
continues to be spurred by increasing
consumer payments for healthcare
services and health plan premiums.
Overall, consumer spending in the
healthcare industry is expected to
grow to $608 billion by 2019.2
When this report was first released
in 2010, 10 million consumers were
enrolled in high deductible health
plans (HDHPs),3 which require
consumers to pay a minimum
deductible amount before their health
plans cover any portion of the cost.
Less than a decade later, 75 million
consumers are enrolled in HDHPs, a
more than seven-fold increase.4
The average deductible for covered
workers with single coverage has
doubled from $735 in 2010 to
$1,478 in 2016.5
Consumers Are Demanding More From Healthcare
Sources
1 Centers for Medicare & Medicaid Services
2 Kalorama Foundation
3 AHIP 2010
4 CDC’s National Center for Health Statistics
5 Kaiser Family Foundation
6 U.S. Department of Health and Human Services
Data from the InstaMed Network
confirms this trend as the total volume
of consumer payments to providers on
the InstaMed Network has increased
by 58 percent from 2013 to 2016,
growing 16 percent on average each
year. (Figure 1.1)
Consumers are paying more to have
health plan coverage as well, with rates
for health plan premiums on the rise.
In fact, premiums for plans available to
consumers via HealthCare.gov increased
by an average of 22 percent in 2017.6
1.1
Increase in the Total Volume of Consumer Payments to ProvidersFrom 2013 to 2016, the total volume of consumer payments to providers on the InstaMed Network has increased by 58%, growing by 16% on average each year
2016
2013
© 2017 InstaMed. All rights reserved.7
What Does This Mean For Providers and
Payers?
The impacts of consumer payments
on the healthcare economy are felt by
both providers and payers alike.
As seen in recent years, the trend in
increasing consumer responsibility
requires that providers must collect
a larger portion of their revenue
directly from patients. This holds true
for 2016 as 72 percent of providers
reported an increase in patient
responsibility over 2015.7 Since
2013, the majority of providers have
consistently reported this increase in
patient responsibility.
Sources
7 Provider Healthcare Payments Survey 2016
8 Payer Healthcare Payments Survey 2016
9 Consumer Healthcare Payments Survey 2016
10 University of Connecticut’s Health Disparities Institute
11 UnitedHealthcare Consumer Sentiment Survey
The burden to collect from patients
has become a growing concern for
providers as the top three provider
revenue cycle concerns in 2016
were related to patient payments:
increases in patient responsibility for
payment, how to increase cash flow
and ways to reduce days in accounts
receivable. In particular, the last
concern is validated by the 73 percent
of providers who reported that it takes
one month or longer to collect from a
patient. (Figure 1.2)
In 2013, the ACA changed the
landscape of the healthcare economy
by greatly expanding the individual
market. As a result, millions of
consumers now buy health plans
directly from payers.
Payers must now interact with
consumers in ways that they rarely
did before, including collecting
monthly health plan premiums
directly from consumers instead of
working primarily with an insurance
broker or employer group. The
political landscape and questionable
future of the ACA has done little to
stymie payer concerns about their
relationship with consumers as 40
percent of payers rank offering direct-
to-consumer solutions as their top
priority in 2017.8
1.2
Significant Delays to Collect From Patients 73% of providers reported that it takes one month or longer to collect a patient payment
%73
When this report was
first released in 2010, 10
million consumers were
enrolled in HDHPs. Less
than a decade later, 75
million consumers are
enrolled in HDHPs.
Healthcare Is Wrought With Confusion
Despite these relationship shifts
driven by consumer payments, many
in the industry have been slow
to acknowledge or encourage the
consumer’s new role as an industry
stakeholder. Consider that 92 percent
of consumers reported that it was
important to know their payment
responsibility prior to a provider
visit.9 (Figure 1.3) Yet, only a third of
consumers understood their payment
responsibility when a deductible or
copay were part of their health plan.10
This gap is perpetuated by a general
lack of literacy on common terms in
the healthcare payments vernacular
– only seven percent of consumers
could successfully define terms
such as plan premium, deductible,
co-insurance and out-of-pocket
maximum.11
8 © 2017 InstaMed. All rights reserved.
Sources
12 Consumer Healthcare Payments Survey 2016
13 Consumer Healthcare Payments Survey 2016
14 2015 The Hospital Consumer Assessment of
Healthcare Providers and Systems (HCAHPS) Survey
15 Deloitte
16 Melior 2015 Consumer Survey
There are various contributing factors to
this confusion. One disconnect is that
consumers may not receive statements
for services until weeks or even months
have passed. Another cause can be
lack of billing consolidation between
different organizations under a single
business identity, which means that
a consumer could reasonably receive
multiple statements for what they
consider to be one visit.
Consumer Demands Have Real Impacts
The ability to ignore or deprioritize
consumer demands in healthcare
payments may no longer be an option in
the near future. The consequences of
inaction go beyond just longer days in
accounts receivable or bad debt.
The trends now delineate a clear
correlation between the payment
experience and a healthcare
organization’s brand. For example,
patients who are satisfied with billing
are five times more likely to recommend
the hospital.14
How a consumer views a healthcare
organization has direct ties to that
organization’s revenue. Between 2008
and 2014, hospitals with excellent
HCAHPS patient ratings had a net
margin of 4.7 percent compared to
just 1.8 percent for hospitals with low
ratings.15 Additionally, 75 percent of
consumers reported that they prefer
health plans with payment capability
when they were selecting a plan.16
1.4
Consumers Are Confused by Healthcare Bills 74% of consumers are confused by EOBs and medical bills
Typically, consumers are only
aware that they may have payment
responsibility after they seek
healthcare services when they are
sent an explanation of benefits
(EOB) by their health plan. Though
it discusses payment responsibility,
the EOB typically includes bold
language that it is not a bill and
should not be paid by the consumer.
This mixed messaging may be one
of the reasons that 74 percent of
consumers are confused by EOBs.12
Consumer confusion does not lessen
when the provider sends a statement
for payment responsibility as 74
percent of consumers were also
confused by their medical bills.13
(Figure 1.4)
Only 7 percent of
consumers can
successfully define terms
such as plan premium,
deductible, co-insurance
and out-of-pocket
maximum.
1.3
Consumers Want to Know Payment Responsibility Upfront92% of consumers reported that it was important to know payment responsibility prior to a provider visit
%92
© 2017 InstaMed. All rights reserved.9
Are Providers the Ultimate Lenders?
The Patient Financing Debate
As consumer responsibility soars,
providers are seeking ways to ensure they
get paid. This shift has created industry
buzz around patient financing.
Businesses often seek lending solutions
for their cash flow problems. Patient
financing offerings have been in the
market since the 1990s, and the market
for elective procedures is the strongest
and most mature. Alternatively, the
market for non-elective procedures
(procedures that are medically necessary
and/or essential) has been wrought with
challenges and churn of business models
and lending structures. In spite of the
challenges, the market for non-elective
procedures garners attention because
it is the largest slice of the $3 trillion
healthcare economy.
There are three models for non-elective
patient financing: self-funding, recourse
lending and non-recourse lending. Self-
funding is what providers do today when
they carry the account as a receivable
and attempt to collect the money directly
from the patient.
The recourse lending model requires the
provider pass the underwriting criteria
of the lender to launch the patient
financing program. As patients elect
to join the program, their receivable is
funded to the provider by the lender in
exchange for a one-time discount fee and
ongoing service fees from the provider.
Additionally, the lender has the right to
recover losses from the patient by way of
a pre-defined process of recovering the
loss from the provider.
The non-recourse lending model requires
the provider to agree to the terms and
fees of the lender to launch the patient
financing program. Then each patient is
required to pass the underwriting criteria
of the lender for funding to occur and any
losses are borne by the lender without
recourse to the provider. The lender has
the right to accept or deny each patient
based on its underwriting policies and
procedures before entering into the
lending agreement with the patient
and funding the provider. Non-recourse
lending may result in patients facing very
high interest rates and fees, as the lender
does not have any other option to offset
their losses.
Recourse models have high recourse
rates for consumers with weak credit
and poor ability to pay and therefore do
not add much value in exchange for the
discount fees and service fees charged.
Non-recourse models deny funding to
those with weak credit and naturally
select consumers that have good credit
and access to other credit facilities.
It is debatable whether a viable
financing market exists for non-elective
procedures. However, for providers
that are self-funding, it is essential for
those businesses to deploy the most
efficient and consumer-friendly collection
models. This is where payment plans
play a big role. Payment plans, deployed
with the proper collection methods,
policies, procedures, technical security
and compliance, can yield equally high
collection rates without the fees pursuant
to recourse and non-recourse lending. In
effect, the self-funding model powered
with payment plans replaces the lender
as an intermediary with technology and
improved business practices.
10 © 2017 InstaMed. All rights reserved.
Omnichannel Payments Are
Impacting Healthcare
Whether a baby boomer or millennial,
consumers want omnichannel options to
make their healthcare payments.
TRENDSin HEALTHCARE PAYMENTS
Sources
1 2015 McKinsey Consumer Health Insights Survey
This Isn’t About Millennials – Consumers
Across All Generations Want Payment
Convenience
Inaccurate generalizations on how
consumers want to pay their healthcare
payments persist within the industry
and indicate that consumers prefer one
channel for their healthcare payments.
For example, incorrect assumptions
are made when statements like “baby
boomers pay their bills by check” and
“only millennials are making payments
online” are used to make business
decisions for providers and payers
alike. The data tells a very different
story. Consumers want an omnichannel
payments experience regardless of their
demographic attributes, like age. An
omnichannel payment experience means
that consumers have multiple channels
to make payments with the freedom to
decide which channel they want to use.
What Are Consumers Demanding?
There is a new stakeholder in the
healthcare payments market –
consumers. As outlined in the previous
section, healthcare organizations
must find new ways to meet consumer
demands or face impacts to their
bottom line.
The first step to meeting consumer
demands is to understand consumer
expectations of the healthcare
payments process. On this point,
the data tells us that consumers do
not view healthcare payments as
different or distinct from payments
they make in other industries. When
surveyed, traits that consumers value
closely align between commercial
and healthcare industries. The traits
include giving great customer service,
delivering on expectations, making
life easier and offering great value.1
Put simply, consumers do not view
shopping online or using a ride-sharing
service as different from paying their
medical bill or health plan premium.
If consumers can have an up-to-the-
minute status on their pizza delivery,
they expect the same type of visibility
in healthcare.
Consumers do not view
healthcare payments as
different or distinct from
payments they make in
other industries.
© 2017 InstaMed. All rights reserved.11
Sources
2 Eighth Annual Billing Household Survey, Fiserv Inc., 2016
3 Consumer Healthcare Payments Survey 2016
4 Consumer Healthcare Payments Survey 2016
5 Consumer Healthcare Payments Survey 2016
When consumers are asked about
payment, there are more similarities in
preferences across generations than
contrasts. For example, 88 percent
of people under 40 pay their monthly
household bills online, while 78 percent
of people over 40 pay their monthly bills
online. There is no significant difference
between generations when paying their
bills online.4
This same principle holds true in
healthcare as 73 percent of people
under 40 preferred to make a payment
for their medical bill online, while 52
percent of people over 40 preferred
online payments in healthcare.5 When
survey data is tracked year over year, all
generations are showing an increased
preference for online payment channels
and electronic payment methods.
Walk into a retail location like CVS or Walmart 10%
Give payment information over the phone 19%
Mail a payment 36%
Pay through a mobile app 16%
Set up payments through my bank’s bill-pay portal 29%
Go online to pay 71%
81%Online
2.2
Consumers Want to Pay Premiums Online 4 out of 5 consumers wanted to pay their health plan premiums online
2.1
Consumers Want an Omnichannel Experience: All the Ways Consumers Pay Their Household Bills
To understand this trend, we can look to
the data on consumer preferences for
paying their monthly household bills. In
2016, 19 percent of consumers switched
payment channels for their bills from
month to month.2 In other words, one
out of five people will pay the same bill a
different way each month.
When surveyed on the payment channels
they use for household bills, consumers
overwhelmingly selected online payment
channels, but other payment channels
are still being used.3 (Figure 2.1) This
data tells us that while consumers may
prefer online channels, they still want to
be able to use other payment options at
their discretion.
4 5
12 © 2017 InstaMed. All rights reserved.
Being Where Your Patients and
Members Are
The data for household bill payment
preferences demonstrates a need for a
comprehensive omnichannel approach.
However, there is a clear connection
between consumer preference and
payment channels that promote
convenience and simplicity. From 2010
to 2016, household bills paid by paper
check declined by 20 percent, while
electronic options increased. Bills paid
through online and automated options
increased by 10 percent, while card
payments doubled to 15 percent.6
The preference for online payment
channels holds true for healthcare
payments as well. More than half of
consumers prefer to pay their medical
bills through an online payment
channel, while almost 80 percent prefer
to pay their health plan premiums this
way.7 (Figure 2.2)
Online payments go beyond simply
collecting payments from a healthcare
organization’s website. There are
opportunities to accept payments
within online portals that consumers
already visit for payments or healthcare
information. In fact, 73 percent of
consumers want to pay all of their
healthcare bills in one place.8
Data from the InstaMed Network
confirms that consumers want to pay
from websites where they already go for
healthcare information as there was rapid
growth in those payment channels from
2013 to 2016: payments to providers
through a health plan’s website increased
527 percent or 84 percent year over year
(Figure 2.3), and payments from an online
patient portal increased 139 percent or
34 percent year over year. (Figure 2.4)
As consumers turn to their smartphones
for more of their daily activities,
healthcare payments must become an
integrated part of the mobile experience
as well. According to the Pew Research
Center, 77 percent of Americans own
smartphones up from just 35 percent
in Pew Research Center’s first survey
of smartphone ownership conducted in
2011.
When that data is broken out across
age ranges, smartphones are ubiquitous
as ownership is high across all age
brackets: 92 percent of consumers aged
18-29, 88 percent of consumers aged
30-49, 74 percent of consumers aged
50-64 and 42 percent of consumers
aged 65+. An “always connected” world
is no longer an idea – it’s here – and
healthcare needs to respond.
2.3
Consumers Want to Make Payments Through Health Plan Websites Payments to providers through a health plan’s website increased 527% or 84% year over year
2.4
Consumers Want Convenient Online Payment ChannelsPayments from an online patient portal increased 139% or 34% year over year
Health Plan Website
Online Patient Portal
2013 - 2016
527%increase
139%increase
Sources
6 Aite
7 Consumer Healthcare Payments Survey 2016
8 Consumer Healthcare Payments Survey 2016
© 2017 InstaMed. All rights reserved.13
According to research done by Google,
four in 10 smartphone owners turn to
their phones for finance activities. Data
from the InstaMed Network confirms
this shift to mobile as payments from
a mobile device have increased to 20
percent of all online payments in 2016,
which has doubled in three years. (Figure
2.5) In addition, 61 percent of consumers
reported having interest in using a new
mobile payment system such as Apple
Pay, Samsung Pay or Android Pay to make
a healthcare payment.9 (Figure 2.6)
2.5
Expanding Use of Mobile Payments in Healthcare Payments from a mobile device have increased to 20% of all online payments in 2016
%
2.6
Consumer Interest in Mobile Payment Systems for Healthcare Bills 61% of consumers reported having interest in using a new mobile payment system such as Apple Pay, Samsung Pay or Android Pay to make a healthcare payment
How Consumers Prefer to Pay –
Electronic Payment Methods
One common denominator for consumer
preference seems to be the preference
to leverage electronic payment methods.
When given the option of various payment
methods to pay healthcare bills in 2016,
68 percent of consumers indicated that
they preferred to pay with an electronic
payment method, including payment
cards, directly from a bank account
(ACH) and digital wallet.10 86 percent
of consumers prefer an electronic
payment method when making premium
payments to a health plan.11 Data from
the InstaMed Network confirms this as
payment card transactions increased 120
percent, or 30 percent year over year from
2013 to 2016.
61
18%
11%
9%
5%
20%2016
2015
2014
2013
2012
Sources
9 Consumer Healthcare Payments Survey 2016
10 Consumer Healthcare Payments Survey 2016
11 Consumer Healthcare Payments Survey 2016
77 percent of Americans
own smartphones up
from just 35 percent in
Pew Research Center’s
first survey of smartphone
ownership conducted
in 2011.
14 © 2017 InstaMed. All rights reserved.
How Consumers Prefer to Pay –
Automated Payment Channels
The ability to leverage electronic payment
methods in healthcare offers consumers
the convenience and accessibility that
they already find in other industries.
For healthcare organizations, electronic
payment methods streamline workflows
that may depend on paper and manual
processes. Yet, there is an added
benefit of electronic payment methods
that healthcare is just starting to realize
the rewards of – automated payment
channels.
2.8
Increase in Automated Payment PlansAutomated payment plans increased by 272%, growing by 55% on average each year
There are multiple benefits of paying
electronically for consumers. First is
the instant satisfaction of knowing
that the payment is complete and not
having to wait weeks to see an updated
balance as when mailing a paper check.
Secondly, electronic payments can
employ additional layers of security when
done correctly. Thirdly, consumers can
have the added convenience of saving
their electronic payment method on
file for future payments. The capability
of a digital wallet has gone from an
innovative ecommerce feature to a de
facto expectation very rapidly. Other
industries are increasingly offering digital
wallets to their customers as a quick way
to pay without having to enter payment
information for every transaction.
There are countless examples of digital
wallets in consumer-focused industries
– look at the ecommerce shopping
experience with any major retailer, and
there will be the ability to save payment
methods to create a digital wallet.
Data from the InstaMed Network
confirms that consumers want digital
wallets for healthcare payments too as
the total number of cards saved on file
from 2013 to 2016 increased by 217
percent or an average growth of 47
percent year over year. (Figure 2.7)
2016
2013
2.7
Shift to Digital WalletsThe total number of cards saved on file increased by 217% or an average growth of 47% year over year
Automated payment channels leverage
electronic payment methods saved on
file to automatically collect a payment.
For example, if a consumer wants to
pay down a larger medical bill over time,
the provider can set up an automated
payment plan to collect in regular
intervals, such as $100 a month to pay a
$1,000 balance over 10 months.
The capability of a digital
wallet has gone from an
innovative ecommerce
feature to a de facto
expectation very rapidly.
217%
© 2017 InstaMed. All rights reserved.15
Automatic payments guarantee revenue
that might otherwise go uncollected
for healthcare organizations. Payers
are uniquely positioned to leverage
automated payments to collect
health plan premiums directly from
their members, which reduce plan
terminations due to missing payments.
Consumers indicated that they want to
pay this way as 58 percent preferred
the option to schedule an automatic
deduction to pay their premiums.12 (Figure
2.9)
Data from the InstaMed Network shows
that consumers are increasingly adopting
the option to leverage automated
payments in healthcare as the total
number of automated payments on the
InstaMed Network is growing at a rate of
111 percent per year. (Figure 2.10)
2.9
Consumers Want Automated Payments for Premiums 58% of consumers preferred the option to schedule an automatic deduction to pay their premiums
Data from the InstaMed Network shows
that payment plans are a growing
consumer payment channel as the total
number of automated payment plans
on the InstaMed Network from 2013 to
2016 increased by 272 percent, growing
by 55 percent on average each year.
(Figure 2.8)
Beyond payment plans, healthcare
organizations can leverage automated
payments for smaller balances by saving
a card on file to automatically collect as
soon as a balance is due. Consumers
are accustomed to payment experiences
like this outside of healthcare. For
example, consumers know that they will
have to present a payment method upon
checking into a hotel, and that they will
be charged upon checkout. Healthcare
can look to these best practices to avoid
poor accounts receivable metrics that
often result in financial losses.
%582.10
Automated Payments Are Rapidly Increasing The total number of automated payments is growing at a rate of 111% year over year
%111
Sources
12 Consumer Healthcare Payments Survey 2016
Automatic payments
guarantee revenue that
might otherwise go
uncollected for healthcare
organizations.
16 © 2017 InstaMed. All rights reserved.
The True Costs of Paper in Healthcare
Healthcare is one of the last industries
where the majority of information
is primarily transmitted via paper,
including the information associated
with the payment process: EOPs,
EOBs, mailed paper statements, paper
check payments, etc.
Overall, the ability to support these
paper-based transactions requires
manual processes that cost the
industry significant resources
– consider that 16 percent of
total healthcare spending is on
administrative costs.1
The costs are not just monetary either
as 21 percent of physicians’ time
is spent on non-clinical paperwork.2
Additionally, 87 percent of physicians
say paperwork and administration are
a key source of staff burnout.3
However, providers alone do not suffer
the burdens of paper clogging up their
time and resources. These costs are
felt across all healthcare constituents.
Paper Is Hurting All Healthcare
StakeholdersProviders, payers and consumers are all
experiencing the costly inefficiency of paper in
healthcare payments.
TRENDSin HEALTHCARE PAYMENTS
Sources
1 McKinsey
2 2016 Biennal Physicians Survey
3 Medscape
3.1
Almost All Providers Are Receiving Paper Payments From Payers 88% of providers reported that they received paper checks and EOPs from one or more of their payers
88
Healthcare is one of the
last industries where the
majority of information is
transmitted via paper.
© 2017 InstaMed. All rights reserved.17
The Payer and Provider Paper
Disconnect
Every year, three billion transactions
take place via paper-based and manual
processes between providers and
payers.4 In fact, 88 percent of providers
reported that they received paper checks
and EOPs from one or more of their
payers. (Figure 3.1) With that same group
of providers, 85 percent said that they
preferred to receive payer payments via
3.2
Providers Prefer ERA/EFT Significantly Over Paper Payments 85% said that they preferred to receive payer payments via ERA/EFT
85%
13%
2%
Sources
4 2016 CAQH Index Report
5 Provider Healthcare Payments Survey 2016
6 Provider Healthcare Payments Survey 2016
7 2016 CAQH Index Report
8 Provider Healthcare Payments Survey 2016
electronic remittance advice (ERA) and
electronic funds transfer (EFT).5 Yet, only
13 percent of providers said they prefer
payments in the form of paper checks
and two percent preferred virtual card
payments from payers.6 (Figure 3.2)
Providers are required to navigate
paper processes with both payers and
consumers to get paid. Therefore, the
costs and time to process a paper claim,
paper check or paper statement directly
impact their bottom line. The average
time spent on processing a manual
paper-based transaction is eight minutes,
but can be as long as 30 minutes and
costs three dollars more when compared
to electronic transactions.7
This may be why so many providers
reported that they prefer electronic
transactions over paper. In addition to
the 85 percent of providers who prefer
EFT payments from payers, 58 percent
of the providers surveyed preferred
an electronic payment method from
consumers.8
The average time spent
on processing a manual
paper-based transaction
is eight minutes, but can
be as long as 30 minutes
and costs three dollars
more when compared to
electronic transactions.
18 © 2017 InstaMed. All rights reserved.
Untapped Potential of Electronic
Transactions
If electronic transactions were to become
the norm in the industry over today’s
paper processes, the potential annual
savings would be $9.4 billion in overall
administrative costs.9
Put simply, electronic options for
payments require much fewer resources
to complete a transaction when
compared to paper transactions. For
example, an automated email notification
can be sent to a consumer with a link
to pay online. If the consumer makes
a payment that way, there is no staff
intervention needed to collect the
payment.
The industry could further lower
administrative costs by $24 billion to
$48 billion annually from productivity
gains made through increased
automation and self-service.10
The Healthcare Industry Is Prime to
Go Paperless
It appears that many in the industry are
ready for the change from a paper-heavy
payment market to realize the potential
of electronic transactions – such as the
27 percent of payers who said that cost
reduction strategies were their top priority
for 2017.11
Sources
9 2016 CAQH Index Report
10 McKinsey
11 Payer Healthcare Payments Survey 2016
12 Consumer Healthcare Payments Survey 2016
Some forward-thinking payers are working
to close this disconnect between how
providers want to get paid and how they
actually get paid by payers. Data from
the InstaMed Network confirms this
trend as ERA/EFT payments increased
106 percent from 2013 to 2016, with a
27 percent annual growth rate each year.
(Figure 3.3)
If electronic transactions
were to become the norm
in the industry over today’s
paper processes, the
potential savings would be
$9.4 billion.
3.3
ERA/EFT Payment Growth on the InstaMed Network ERA/EFT payments increased 106% with a 27% annual growth rate each year
2013 2016106%
increase
As the role of consumers continues
to grow in the industry, payers and
providers will need to meet their
expectations of an electronic payment
experience. Right now, consumers
expect Amazon-like experiences, but
86 percent of consumers still receive
a paper medical bill. Within that same
group of consumers, only 21 percent of
consumers actually want to use checks
to make healthcare payments.12 (Figure
3.4)
© 2017 InstaMed. All rights reserved.19
3.4
Consumer Demands Have Real Impacts 86% of consumers still receive a paper medical bill and only 21% of consumers actually want to use a check to make healthcare payments
86%21%
As consumers turn away from paper
in the healthcare payments process,
electronic and automated payments are
quickly gaining consumer favor. Data
from the InstaMed Network shows that
consumers are increasingly adopting
the option to leverage automated
payments in healthcare as the total
number of automated payments on the
InstaMed Network is growing at a rate
of 111 percent per year. Ignoring this
consumer expectation may result in lost
revenue and damage to the consumer’s
relationship with their healthcare
organization.
As consumers turn
away from paper in the
healthcare payments
process, electronic and
automated payments are
quickly gaining consumer
favor.
20 © 2017 InstaMed. All rights reserved.
Healthcare is a prime target for data breaches.
TRENDSin HEALTHCARE PAYMENTS
Healthcare Data Is a Target
The healthcare payments market
handles a massive amount of
information on a daily basis that
includes such highly sensitive items
as social security numbers and
payment data. Many healthcare
organizations rely on paper-based
processes or legacy technology
systems to transmit this data, which
can easily be intercepted by or
exposed to hackers and thieves.
Any organizations unsure if their
data is at risk should assume the
worst. 2016 saw more healthcare
data breaches than any other year on
record.1 In fact in 2016, there was
roughly one health data breach per
day, affecting more than 27 million
total patient records.2
The risk is not limited to data
breaches or stolen information.
Ransomware is a growing threat in
the healthcare industry that cannot be
ignored as it increased in healthcare
by 36 percent in 2016.3 Ransomware
refers to when a type of malware
freezes an organization’s entire
system until a ransom is paid to the
Healthcare Data Is Under Attack
Sources
1 Symantec
2 Protenus
3 Symantec
4 Symantec
2016 saw more healthcare
data breaches than any
other year on record.
hackers. The threat will continue
to grow in the coming years as the
ransom amounts climb – the average
ransom rose 266 percent in 2016
with the average ransom amount
at $1,077 per victim, from $294 in
2015.4
True Costs of Unsecure Data
Once a healthcare organization’s
data is exposed, a figurative dam has
been broken and the data is available
to any hacker or thief to put on the
black market for sale to the highest
bidder. At present time, there is no
way to make exposed data secure
again or to take it off of the black
market.
© 2017 InstaMed. All rights reserved.21
Financially, data breaches are estimated
to cost the healthcare industry $6.2
billion annually.5 However, the unseen
costs of an exposure reverberate
through the industry at an alarming
rate as headlines quickly announce the
breach and consumers panic over the
status of their personal information
– damaging the organization’s brand
and losing the trust of their patients or
members.
Security Concerns in the Industry
The impact of unsecure data to
an organization’s reputation and
bottom line have not gone unnoticed
in the industry. In fact, 90 percent
of providers reported that payment
security is very important when
collecting patient payments.6
(Figure 4.1) These growing concerns
regarding payment security will only
be compounded as organizations
attempt to keep up with the demands
of consumers by adding new payment
options such as automated payments
and online payment portals.
As discussed in the previous
sections of this report, the ability to
meet the demands of consumers will
be critical to the future of healthcare
payments. However, the ability to
make those payments secure must
be equally as important as making
the experience more consumer-
friendly. More than half of consumers
surveyed reported having significant
concerns regarding the security of
making online payments for both
their medical bills and health plan
premiums.7 (Figure 4.2)
4.1
Payment Security Is on the Minds of Providers 90% of providers reported that payment security is very important when collecting patient payments
%90
Sources
5 Ponemon
6 Provider Healthcare Payments Survey 2016
7 Consumer Healthcare Payments Survey 2016
4.2
Payment Security Is on the Minds of Consumers More than half of consumers reported that having significant concerns regarding the security of making online payments for medical bills and health plan premiums
%59
22 © 2017 InstaMed. All rights reserved.
Source
8 Accenture
9 Accenture
10 Harvard Business Review
11 Protenus
Consumer frustration over stolen
data actually intensifies when the
conversation is about payments –
two-thirds of ecommerce shoppers
would change their online behavior if
it led to safer experiences.10 (Figure
4.3)
It is worth noting again here
that consumers do not view the
healthcare industry with a separate
lens than they do other industries.
Their expectations remain the
same whether they are buying a car,
booking a hotel room or signing up
for streaming video. Consumers
expect the same level of convenience
with their healthcare payments and
they also expect the same level of
security.
Advanced payment technology can
help assuage this consumer concern
as many innovations are inherently
more secure than traditional payment
methods. Tokenization is leveraged
by secure payment applications to
convert payment card information
to a “token,” which has no value
outside of the payment transaction it
is used for because it is exclusively
associated with that merchant’s ID.
The industry is also beginning to
take tokenization to the next level by
leveraging a second token to securely
store payment information online for
future use. When deployed correctly,
these tactics can significantly reduce
PCI scope and the risk of a breach.
Security Concerns Influence
Consumer Choices
If healthcare data is a target, then
consumer data is the industry’s
bullseye as it can yield the highest
profit on the black market. Consider
that one in four consumers have
experienced their healthcare data
being breached.8 As consumers
become savvier healthcare
stakeholders, they will have little
patience for their healthcare data
being mishandled or compromised as
almost half of patients would switch
providers if they found out their
records were stolen.9
4.3
Security Risks for Consumers Have ImpactsTwo-thirds of ecommerce shoppers would change their online behavior if it led to safer experiences
Securing the Industry
One of the biggest threats to the
healthcare payments market is third-
party vendors who are not properly
vetted or who may even self-attest
to being secure and compliant. Of all
breaches reported to the Department
of Health and Human Services, 30
percent were attributed to third-party
vendors.11
This is especially true when vendors
sell their solution as one offering,
but it is actually made up of multiple
systems cobbled together. Those
separate systems or plug-ins
increase the number of touchpoints
for payments, which increase the
number of handoffs for the data. This
adds the risk of vulnerability points in
the data’s journey to its endpoint.
For instance, only solutions listed
on the Payment Card Industry (PCI)
Council’s website are PCI-Validated
P2PE solution providers. P2PE is a
methodology for securing credit card
data by encrypting it from the time a
card is swiped, dipped or keyed until
it reaches a secure endpoint where it
is decrypted.
© 2017 InstaMed. All rights reserved.23
These compliance requirements need
to be taken seriously by healthcare
organizations and the third-party
organizations to which they entrust
their payment data. By meeting these
standards, organizations will ensure
that their data is secure and reduce
the risk of a breach.
By meeting industry
standards, organizations
will ensure that their data
is secure and reduce the
risk of a breach.
To be a PCI-Validated P2PE Solution
Provider, a vendor must complete
the detailed security requirements
and testing procedures outlined
by the PCI Council to ensure that
their solutions meet the necessary
requirements to protect payment card
data.
EMV, or Europay, MasterCard and
Visa, is another area where third-
party certification is key. EMV is
the global standard for chip-based
debit and credit card transactions.
In October 2015, the major
processing banks implemented a
shift that transferred fraud liability to
merchants who process fraudulent
chip card transactions, unless they
use EMV-capable point of sale (POS).
However, for EMV to work, payment
vendors also have to be certified with
all major card brands for EMV.
This is an expensive yet necessary
process that many vendors claim they
can do, but cannot due to the many
hurdles to complete certification with
processors, card brands and payment
card devices. In order to avoid fraud
liability, merchants across the U.S.
must upgrade their point-of-sale
devices to accept EMV transactions.
24 © 2017 InstaMed. All rights reserved.
The 2016 industry trends have had a significant impact on healthcare providers.
To better understand the experiences of providers, InstaMed commissioned the
Provider Healthcare Payments Survey 2016, conducted by LHK Partners. The
nationwide survey participants ranged from solo practitioners to large health
systems. The following are the key data points from the survey:
ProviderSentiment
Summary
of providersreport it takes one month or longer to
collect from patients.
%73
© 2017 InstaMed. All rights reserved.25
What is your primary revenue cycle concern?
What is your overall impression of the impact the 2016 presidential election will have on healthcare?
What has been the trend in the amount your patients owe compared to 2015?
5.1
5.2
5.3
ProviderSentiment
29%
21%
14%
13%
8%
7%
Increase in patient responsibility for payment
How to increase cash flow to your business
Days in accounts receivable
Changes associated with healthcare regulations (e.g., ACA, ICD-10, HIPAA)
Contractual payer payment accuracy
Rise in operational costs
19% 38% 34%
72% of providers saw an increase in patient responsibility compared to 2015
2% 7%
Significantly increased
Slightly increased
No change
Slightly decreased
Significantly decreased
Provider response was evenly split among positive, neutral and negative when asked about the 2016 presidential election impact on healthcare
Very Positive
Positive
Neutral
Negative
Very Negative
14% 36% 23%
30% negative
16% 11%
34% positive
36% neutral
8%Rise in bad debt due to low patient collections
72% of providers said that their primary revenue cycle concern is patient receivables
26 © 2017 InstaMed. All rights reserved.
Do you offer your patients the option of payment plans on their medical bills?
What is your primary method for collecting payments after claim adjudication (i.e., excluding co-pays)?
ProviderSentiment
5.4
5.5
What type of payment do you accept from patients?
5.6
60%
31%
7%
2%
By mailing statements
While the patient is in my office
Via online payment portal
Over the phone/IVR
78%
22%
Yes
No
Checks
Payment cards (e.g., HSA cards, FSA cards, credit cards, debit cards)
Cash
ACH (i.e., directly from the patient’s bank account)
Digital wallet (i.e., PayPal, Apple Pay, Samsung Pay, Android Pay)
33%
10%
90%
92%
91%
60% of providers still primarily collect payments by mailing statements
78% of providers offer payment plans to patients
91% of providers accept payment cards from patients
© 2017 InstaMed. All rights reserved.27
How do you prefer to receive payments from patients?
ProviderSentiment
5.7
How frequently do you collect patient payments at the point of service?
5.9
24%
18%
7%
1%
Payment cards (e.g., HSA cards, FSA cards, credit cards, debit cards)
Cash
Checks
ACH (i.e., directly from the patient’s bank account)
50%
Digital wallet (i.e., PayPal, Apple Pay, Samsung Pay, Android Pay)
During a patient visit, do you know the total amount the patient will be responsible for paying?
5.8
27%
39%
7%
8%
19%
All of the time
Most of the time
Some of the time
Rarely
Never
50% of providers prefer payment cards
52% of providers are not
aware of patient responsibility during
the visit 48%
52%
Yes
No
85% of providers collect some amount of payment at the point of service
28 © 2017 InstaMed. All rights reserved.
When you do not collect patient
payments at the point of service,
what’s the primary reason?
How long does it typically take
to collect from the patient?
ProviderSentiment
5.10
5.11
29%
Uncertainty of amount due
Patient resistance
No point of service (e.g, anesthesiologist)
Time consuming
I do not accept payment cards
Not applicable
43%
21%
1%
3%
3%
25%
Less than 30 days
31 - 60 days
61 - 90 days
91 - 120 days
120+ days
Don’t know
28%
0 - 25%
26 - 50%
51 - 75%
76 - 100%
Don’t know
1%
How much do you typically write off in patient collections each year?
5.12
17%
36%
7%
5%
10%
51%
15%
5%
43% of providers do not collect because they are uncertain about the amount due at the point of service
73% of providers say that it takes one month or more to collect
28% of providers do not know how much in patient collections they write off each year
© 2017 InstaMed. All rights reserved.29
5.13
What is your preferred way to receive payments from payers?
5.14
How important is payment security when collecting patient payments (i.e., encryption)?
5.15
Very important
Somewhat important
Not important
EFT
Paper checks
Virtual card
85%
2%
13%
90%2% 8%
98% of providers rank payment security as important when collecting patient payments
How do you receive payer payments?
91%
88%
50%
3%
EFT
Paper checks
Virtual card
No/None
88% of providers still receive paper checks from one or more payers
85% of providers prefer EFTs from payers
ProviderSentiment
30 © 2017 InstaMed. All rights reserved.
PayerSentiment
Healthcare payers were also greatly impacted by the healthcare payment trends
in 2016. To better understand the experiences of payers, InstaMed commissioned
the Payer Healthcare Payments Survey 2016, conducted by LHK Partners. The
nationwide survey participants included national and regional payers, third-party
administrators (TPA) and Blues plans. The following are the key data points from the
survey:
Summary
of payers
%40rank direct-to-consumer solutions as their
top priority in 2017.
© 2017 InstaMed. All rights reserved.31
On your member portal, what functionality is available to members?
6.1
6.2
What percentage of your membership base logs in on an annual basis?
13%1-24%
40%
13%
7%
27%
25-49%
50-74%
75-100%
I don’t know
Seek health/medical information and advice
100%
93%
93%
80%
80%
80%
67%
47%
20%
20%
View Health Benefit Account balances (HSA, FSA, HRA, etc.)
Make payments to providers using Health Benefit Account
Make payments to providers using any payment method
View status of claims
View EOB
View pharmacy benefits including medication pricing
Make premium payments
Find in-network medical providers
Check benefits including year-to-date deductible
20% of payers have 50% or more of their membership logging into their member portal
80% of member portals make EOBs available to view
PayerSentiment
32 © 2017 InstaMed. All rights reserved.
In the Trends in Healthcare Payments 2015 Survey, 71% of consumers said they would prefer to make all of their healthcare
payments in one place. What priority does your organization place on this functionality?
Which payment methods do you allow members to pay their premium with?
6.3
6.4
High
Medium
Low
60%
13%
27%
87% of payers prioritize consumer preference for making all of their healthcare payments in one place
ACH (Directly from members bank accounts)
Checks
Credit Cards
Debit Cards
Cash 50%
86%
71%
93%
100%
86% of payers accept credit cards from their members for premium payments
PayerSentiment
© 2017 InstaMed. All rights reserved.33
How do members make premium payments?
Which payment methods does your organization use to pay providers for claims reimbursement?
PayerSentiment
6.5
6.6
Mail a payment
Give payment information over the phone
Online through our member portal
Set up payment through member’s bank bill-pay portal
Pay through a mobile app
57%
86%
79%
100%
Other
14%
7%
14% of payers allow members to pay premiums via a mobile app
Electronic funds transfers (EFT)
Checks
Virtual Card
87%
7%
93%
87% of payers are still delivering checks to a portion of their providers
34 © 2017 InstaMed. All rights reserved.
PayerSentiment
What percentage of your provider network currently accepts ERA/EFT payments?
6.7
What is your top priority for 2017?
6.8
Offer direct to consumer solutions (e.g., transparency, wellness, mobile platform)
Administrative cost reduction (e.g., paper EOB/EOP, member premium bills)
Federal administration change
Implementing legislative regulations (e.g., ACOs, PCMH)
Other 19%
7%
7%
27%
40%
50-74%
75-100%
I don’t know 36%
21%
43%
21% of payers report a 75+% ERA/EFT adoption rate
40% of payers say that direct-to-consumer solutions are a top priority for 2017
36 © 2017 InstaMed. All rights reserved.
Qualitative data from 2016 indicates that consumers have become an important
constituent in healthcare payments. To better understand the experiences of
consumers, InstaMed commissioned the Consumer Healthcare Payments Survey
2016, conducted by LHK Partners. This nationwide survey consisted of consumers
who made a healthcare payment and had health insurance in 2016. The following
are key data points from the survey:
ConsumerSentiment
Summary
of consumersare confused by their medical bills
and EOBs.
%74
© 2017 InstaMed. All rights reserved.37
How do you normally pay your monthly bills, such as utilities and cable bills?
How important is it for you to know how much you will owe for a medical bill before a provider visit?
ConsumerSentiment
7.1
7.2
How do you primarily receive your medical bills today?
7.3
71%
29%
16%
36%
19%
10%
Pay through a mobile app
Mail a payment
Give payment information over the phone
Go online to pay
Set up payments through my bank’s bill-pay portal
Walk into a retail location like CVS or Walmart
62%
30%
7%1%
Very Important
Important
Neutral
Not Important
At point of service
Phone call
86%
26%
7%
22%
92% of consumers want to know payment responsibility upfront
71% of consumers pay their non-healthcare bills online
86% of consumers receive healthcare bills via mail
38 © 2017 InstaMed. All rights reserved.
Are you confused by your medical bills from doctors, hospitals and other medical providers?
How do you prefer to make a payment for medical bills?
7.4
7.5
All of the time
Some of the time
Never26% 57% 17%
29%
14%
9%
6%
21%
16%
5%
Pay through a mobile app
Mail a payment
At the provider’s office
Online through a health plan website
Set up payments through my bank’s bill-pay portal
Give payment information over the phone
Online through a doctor or hospital website
74% of consumers are confused by medical bills
58% of consumers prefer online payment channels to pay medical bills
ConsumerSentiment
© 2017 InstaMed. All rights reserved.39
What is your preferred payment method for medical bills?
Please rate your agreement for this statement: I have significant concerns regarding the security of healthcare payments,
including making payments for medical bills and health plan premiums online.
7.6
7.7
Health benefit accounts (e.g., HSA, FSA, HRA)
Digital wallet (i.e., PayPal, Apple Pay, Samsung Pay, Android Pay)
Cash
Checks
Directly from your bank account (ACH)
Payment cards (e.g., HSA cards, FSA cards, credit cards, debit cards) 52%
19%
12%
11%
4%
2%
Agree strongly
Agree
Neutral
Disagree strongly
32%
33%
8%
27%
52% of consumers preferpayment cards for their medical bills
59% of consumers have security concerns about online healthcare payments
ConsumerSentiment
40 © 2017 InstaMed. All rights reserved.
Which of the following do you personally have access to in your home?
7.9
How interested are you in using mobile payment systems such as Apple Pay, Samsung Pay or Android Pay?
7.8
Very interested
Somewhat interested
Not very interested
Not interested at all
18%
34%
21%
27%
Tablet
None of the above
Laptop computer
Desktop computer
Smartphone 82%
81%
65%
63%
0.3%
61% of consumers are interested in mobile payment systems
ConsumerSentiment
© 2017 InstaMed. All rights reserved.41
Which of the following do you use to pay bills?
7.10
If given the option, would you prefer to pay all of
your bills from different doctors, hospitals and other
healthcare providers, in one place?
7.11
Are you confused by the EOB from your health plan?
7.12
Tablet
None of the above
Desktop computer
Smartphone
Laptop computer 59%
46%
33%
16%
10%
Yes
No
No Preference73%
18%
9%
All of the time
Some of the time
Never confused
56%
26%18%
33% of consumers use a smartphone to pay bills
73% of consumers want to make all their healthcare payments in one place
74% of consumers are confused by their EOBs
ConsumerSentiment
42 © 2017 InstaMed. All rights reserved.
What is your preferred payment method to pay your premiums?
7.14
How do you prefer to pay your health plan premium?
7.13
Digital wallet (i.e., PayPal, Apple Pay, Samsung Pay, Android Pay)
Cash
Directly from your bank account (ACH)
Checks
Payment cards (e.g., credit cards, debit cards)
Mail a payment
Give payment information over the phone
Set up payments through my bank’s bill-pay portal
Pay through a mobile app
Go online to pay 47%
24%
9%
16%
4%
1%
50%
30%
13%
6%
80% of consumers prefer online payment channels to pay their health plan premiums
50% of consumers want to use payment cards to pay their premiums
ConsumerSentiment
© 2017 InstaMed. All rights reserved.43
Would you prefer the option to schedule an automatic deduction to pay your premiums?
7.15
Yes
No
No Preference58%
28%
14%
58% of consumers want to schedule automatic payments for health plan premiums
ConsumerSentiment
44 © 2017 InstaMed. All rights reserved.
Now in its seventh year, the Trends in Healthcare Payments Annual Report is distributed
free of charge with the intention of starting a conversation about the current state
of the industry and to promote change. From analyzing the trends in this report, the
following conclusions have been made:
Consumer Demands Are the New Normal
Consumers are disrupting “business as usual” in the industry. This new reality is
spurred on by increases in financial responsibilities for consumers, which are primarily
in the form of health plan premiums, deductibles, copayments, coinsurance, etc. As
their payment responsibility continues to increase, consumer demands will become
the biggest drivers of change for providers and payers. Providers must collect larger
amounts from most or all of their patients, while payers must interact with members in
new ways including collecting health plan premiums.
Despite these relationship shifts, many in the industry have been slow to acknowledge
or encourage the new role of consumers as an industry stakeholder. Consumers often
do not know how much they will owe until they get a paper statement from a provider
or EOB from a payer, which often lead to high levels of confusion and frustration. If
consumer needs are not met, there are real impacts to an organization’s revenue and
brand trust.
Omnichannel Payments Answer Consumer Demands
Consumers bring their expectations and experiences from other industries to
healthcare payments. It isn’t just about millennials either. The demand for an
omnichannel payment experience is true across all generations, including baby
boomers. Omnichannel payments offer consumers the ability to pay how they want at
their discretion. There is a clear connection between consumer preference and payment
channels that promote convenience and simplicity. Electronic and automated payment
channels will become the norm in healthcare payments, as they already are in other
industries. Providers and payers who offer an omnichannel approach to payments will
be rewarded with consumer loyalty, brand trust and revenue to sustain the future of
their organizations.
Conclusions
Conclusions
© 2017 InstaMed. All rights reserved.45
Conclusions
The Industry Is Prime to Go Paperless
The healthcare industry is one of the last places where transactions are primarily done
on paper. The burden of paper is a drag on the entire industry causing wasted time and
money, even causing physician burnout. There is a growing consensus among providers
and consumers that eliminating paper in favor of electronic payments is the preferred way
to get paid. There are significant opportunities to reduce the waste of paper by harnessing
the potential of electronic transactions, especially when leveraged with automation. The
potential cost savings and lower overall administrative resources could save the industry
billions of dollars.
Security and Compliance Must Be a Priority
Any organizations unsure if their data is at risk should assume the worst. Ransomware,
data breaches and stolen information make data in the healthcare industry a constant
target to hackers and thieves – all of which cost the industry billions of dollars. The
impact of unsecure data has not gone unnoticed as consumers and providers reported
payment security is very important. Consequences of unsecure data and noncompliant
processes and systems will continue to cost the industry billions of dollars. Organizations
can ensure that their data is secure and reduce the risk of a breach by meeting industry
standards, and obtaining audits and certifications from respected industry groups.
46 © 2017 InstaMed. All rights reserved.
Conclusions
The 2016 Trends in Healthcare Payments Annual Report includes quantitative data
from over $239 billion in healthcare payments volume on the InstaMed Network,
which connects over two-thirds of the healthcare market. The data represented was
processed between 2013 and 2016.
The report includes qualitative market data based on an analysis of three InstaMed-
commissioned online surveys conducted by LHK Partners Incorporated, an independent
marketing research company, to better understand the experiences of the key
stakeholders in the healthcare payments process.
The data compiled by LHK Partners for the Provider Healthcare Payments Survey 2016
comes from respondents representing over 100,000 healthcare providers nationwide.
The group of respondents is comprised of 74 percent medical practices or clinics;
13 percent hospital, health system or integrated delivery network; 8 percent billing
services; 4 percent durable, medical equipment or home medical equipment and 1
percent lab.
The data compiled by LHK Partners for the Payer Healthcare Payments Survey 2016
comes from respondents representing over 3,000 payers nationwide. The group of
survey respondents is comprised of 47 percent regional payers; 27 percent Blues
plans; 13 percent national payers and 13 percent other types of payers, including state
Medicaid payers and PPOs.
The data compiled by LHK Partners for the Consumer Healthcare Payments Survey
2016 comes from respondents representing 2,730 consumers nationwide who paid a
medical bill and had health insurance in 2016.
Methodology
© 2017 InstaMed. All rights reserved.47
Conclusions
About InstaMed InstaMed is healthcare’s most trusted payments network, connecting providers,
payers and consumers on one platform. The InstaMed Network connects over
two-thirds of the market and processes tens of billions of dollars in healthcare
payments annually. InstaMed reduces the risks, costs and complexities of working
with multiple payment vendors by delivering one platform for all forms of payment
in healthcare, designed and developed on one code base and supported by one
onshore team of experts in healthcare payments. InstaMed enables providers to
collect more money from patients and payers while reducing the cost and time to
collect. InstaMed allows payers to cut settlement and disbursement costs with
electronic payments and facilitate consumerism for their members.
Visit InstaMed on the web at www.instamed.com or contact info@instamed.com for
more information.
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