The administrative costs of the US healthcare system are the highest in the world: private health plans alone spend more than $150 billion a year. At the same time, certain practices seem to have been trapped in the past. For example, streamlining payments using technology still sounds like science fiction to many hospitals and clinics.
Recent surveys show that 85% of consumers preferred to use an electronic payment method for their medical bills. But the option is simply not available from most healthcare providers, who continue to send paper bills.
Now that COVID-19 has brought lockdowns and the popularization of online shopping, thanks to the fear of the spread of contagion, many businesses have started to adopt digital payments instead of receiving physical, in-person cash. It should be no different in the case of hospitals and clinics.
Learn about some of the emerging payment technologies and how they can improve the way you collect bills and receive payments.
Digital Payment Options
Most patients today prefer digital payment options when they are available. Some hospitals and clinics have already adopted automated clearing house (ACH) payments – a computer-based system for processing transactions – but this is not enough.
To align with post-pandemic consumer expectations, here are some of the emerging payment technologies you should consider offering your patients:
1. Peer-to-Peer Payments
Also known as P2P, it refers to digital payment apps that allow you to transfer funds from a mobile device (such as smartphones and tablets) without the need for a magnetic card. The practice grows more popular every year and analysts predict that more than $1 trillion will be transacted via mobile P2P apps by the end of 2023. The most popular options right now are Cash App, Venmo, and Zelle.
2. Digital Wallet Payments
The name does justice to the practice. Apps like PayPal, Apple Pay, and Google Pay work just like a normal wallet and use the patient’s credit card information to manage their payments and expenses. You can also send money or receive payments that stay in your virtual account to be used digitally.
3. Contactless Payments
Another important advance in pandemic times is digital payments made without any contact. Funds are exchanged simply by touching your credit card or smartphone to the surface of near-field communication (NFC) technology device. Some clinics also store credit card information on secured digital portals for automatic billing.
Digital Payment Methods Optimize Workflow
Imagine all the work that comes with mailing bills, sending outstanding accounts to collections, or payment collections. So many problems can happen with conventional billing methods (such as errors or delays) that it is even curious that they are still being used.
On the other hand, an online payment system can simplify the entire payment workflow by offering these three major advantages:
- Instant and much-faster payments than cash or checks.
- Save costs on paper bills, mail, and payment gateways.
- Higher security for your finance department, with a low risk of theft.
Digital payment methods also accelerate your clinic’s revenue cycle. Do you know what is revenue cycle management in healthcare? It is the term given to the process of tracking the revenue from patients, one of the most important steps for the financial health of your business.
Digital Payments Promote Patient Satisfaction
For providing an easier and quicker payment experience, digital payments are convenient for both patients and staff. Conventional billing processes can be slow and unnecessarily complicated, with bills going into collections and shifting to different providers.
A recent study has shown that a third of healthcare consumers (34% in 2019) are unsatisfied with their provider’s billing processes. This can lead to a variety of problems: uncollected bills create huge debts, and over-billing by the healthcare provider can bring bad publicity and negative reviews for your hospital or clinic.
With consumers increasingly digitizing the payments they make in commerce and online stores, the trend is that these new digital payment technologies will also become popular among healthcare providers.
Faster Than a Routine Checkup
The conventional billing process at your clinic is not practical, is subject to a variety of errors, and even delays payments, hurting your cash flow. In times of COVID-19, it also keeps patients longer in the waiting room before and after leaving their doctor’s appointment, which is not recommended.
These are some of the reasons that are making digital payments more popular among healthcare providers as well. In addition to being faster, electronic processes make payment transactions cleaner and safer for everyone, considerably improving the patient experience.