The U.S. healthcare market continues to change based on patient demand for price transparency, the shift in patient responsibility for medical bills, data security among healthcare providers and more, according to a report from InstaMed, “Trends in Healthcare Payments Sixth Annual Report: 2015.”
The annual report includes data from more than “$165 billion in healthcare payments volume on the InstaMed Network, which connects over two-thirds of the healthcare market. The data represented was processed between 2012 and 2015.” According to the report, consumers are influencing change in healthcare payments through sensitivity to how much they are spending on medical costs and how they receive information on what they owe.
The market is also influenced by the greater number of consumers with health insurance and how they are accessing it. Open enrollment through the Affordable Care Act could reach 40 million consumers through the public and private exchanges by 2018, and many of those consumers will have health insurance for the first time, according to the report. “This influx of consumers to the healthcare market, coupled with new [Affordable Care Act] plan requirements, has changed how payers do business,” it states.
Consumers are interacting more with payers directly instead of a third-party to manage payments. As a result, payers need to evaluate services to collect payments and issue bills to consumers. “Payers have to build the technical and operational infrastructure to receive individual premium payments and ensure accurate posting and reconciliation. Consumers are faced with the addition of a new, monthly household bill with premium payments.”
Findings from InstaMed’s data analysis show consumer payments to providers included in the InstaMed Network grew 94 percent from 2012 to 2015 and by an average of 25 percent each year. Patients also want to know their expected healthcare costs more from providers at the time of service. In 2015, nine out of 10 consumers said it was important to know their expected costs before a visit to their healthcare provider, according to the report.
“The need is for consumers to understand an estimate of what they will actually pay based on their benefit information which can include variables like their deductible, copayments and coinsurance,” it states. In 2015, the majority of consumers (77 percent) said they were confused by the Explanation of Benefits they receive from their health plan provider, according to the report.
“The confusion continues when the consumer receives a bill from their healthcare provider for their payment responsibility, which is often printed and mailed weeks or months after a visit and does not clearly indicate what is due or how to pay.” Consumers also report they will switch healthcare providers based on the cost and bill information they have; 47 percent said they “will switch providers for the ability to understand cost upon scheduling and to easily understand and pay a bill using a preferred method,” according to InstaMed’s report.
Additional findings in the report show consumers prefer to pay their household bills through digital formats. “The digital experience offers consumers the freedom of choice to make payments whenever it is convenient for them,” according to the report. “Seventy-five percent of consumers opt to pay their household bills through an online channel, such as a bank bill pay portal, website or mobile app.”
InstaMed concludes in the report that consumers are a critical stakeholder in the healthcare market as their payment responsibility changes and payers and providers should focus on working together to simplify the payment process. Healthcare providers should leverage best practices from other industries as a model for their patient payment systems. “Make it simple for consumers to understand what a service will cost and then offer multiple payment options including automatic payments.
By adopting electronic and automated payment channels, payers and providers can set the expectation upfront at the same time enabling faster time to payment. As the industry continues to grow rapidly, paper in the healthcare payments process will be unsustainable to any business model,” InstaMed concludes. “There’s never been more of a need for payers and providers to work collaboratively.”
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