One of the most significant changes for which the healthcare industry must prepare as the result of PPACA is the addition of approximately 30 million uninsured Americans to healthcare insurance rolls in 2014. This means that more patients will receive healthcare services, and hundreds of millions of patient payment transactions will be added to the U.S. healthcare system.
These added burdens will compound the challenges facing healthcare providers already stressed by the steady increase in patient bad debt in recent years. According to the global management consulting firm McKinsey & Company, providers wrote off an astonishing $65 billion in patient bad debt in 2010. And according to Fitch Ratings, a leading international ratings agency, the high levels of uncompensated care for hospitals did not abate in 2011, driven by elevated unemployment, more uninsured patients and increasing patient responsibility for healthcare costs.
In response to these challenges to their ongoing business viability, many providers have implemented new, more efficient payment models that enable patients to utilize a payment method with which they increasingly say they are comfortable: online payments.
The digital shift: Personalization
achieves 350 percent increase in payments
In its 2011 Consumer Trends Survey, Fiserv Inc., a global financial services technology provider, found the following evidence of an evolving consumer comfort level in conducting financial transactions digitally:
- Online bill payments now account for 50 percent of all bill payment volume, compared to 23 percent for check payments.
- From January 2010 to July 2011, the number of households paying bills directly at company websites and at financial institution websites increased by 11 percent each.
- The use of mobile banking services for bill payments and money transfers is growing rapidly. In 2011, 40 percent of mobile banking users paid a bill using their mobile phone as compared to 28 percent in 2010. Thirty-two percent used their mobile phone to transfer money versus 25 percent in 2010.
A few years ago, many healthcare providers began to use electronic bill presentment and payment solutions – or e-billing and e-payment. Even providers that were hesitant about offering patients this option to pay their bills were soon won over by its convenience and ease of use. In our experience, e-billing and e-payment users can increase patient collections by a minimum of 20 percent. Many users reduce bad debt by 50 percent while reducing reconciliation costs by as much as 40 percent. When e-billing and e-payment are holistically integrated into a provider’s overall collections process, patient collections can increase by as much as 200 percent. And electronic billing and payment means no paper, no postage, no waste.
Another new online payment solution – personalized online payment – is providing stunning results for healthcare providers: In one study, more than 350 percent more payments were made with such personalized tools compared to other Web-based payment systems (source: confidential client data).
Personalization creates intrigue
Users of personalized online payment solutions can customize the look of the websites and the payment parameters for each patient. Such practices accelerate payments and increase collections by utilizing unique, personalized sites that are pre-populated with the patient’s specific information. By contrast, traditional e-billing and e-payment solutions utilize a website with payment portals that a patient navigates and then registers to use to make a payment.
The personalized online payment process begins with a personalized notification that goes directly to the patient via letter or email. The notification contains a custom message to the patient and the link and password to their personal website. The website’s welcome page and subsequent pages dynamically display the logo of the facility where they were treated, giving the patient confidence and comfort in following through with the payment process. Using the personalized payment site, the patient can make a credit card, debit card or ACH payment on their account and update their personal information. With one click the payment is processed, a confirmation is emailed to the provider and patient, and the money is deposited directly into the provider’s account.
The key to the effectiveness of the personalized online payment solution is the intrigue it creates. When patients receive a communication that contains a personalized URL linking them directly to their own customized website – a site that is pre-populated with his or her own account and payment information – they are immediately interested and want to know more. And the convenience of the personalized sites helps prompt faster action.
There are operational benefits for the provider, too. By taking payments online, providers can automate the labor-intensive posting of payments, improving operational efficiencies and accelerating revenue. Automating this process improves internal security and eliminates human error associated with manual processing.
Ease of use speeds patient payments
The pre-populated websites are easy to use, and average payments are made less than 13 days from the day statements are received. Experience has shown that 78 percent of end users that log onto such a personalized solution will make a payment – and can do so in less than 60 seconds (source: confidential client data). Additionally, consumers can easily update their demographic information directly through the website.
Most personalized online payment solutions can be integrated with the provider’s existing account, further increasing efficiencies and reducing time-consuming manual payment processing. Funds can be deposited directly through the provider’s existing merchant account – or, if they prefer, through another merchant processor – to speed the receipt of funds. In addition, processing payments online reduces call center costs associated with payment by phone. The personalized solution also enables the provider to promote its brand and advertise its service lines to patients.
Effective marketing of the service to patients is vital to achieving the maximum benefits of a new personalized online payment system. In order to increase awareness and utilization of the service, the provider should use every tool typically employed for a patient marketing program, providing multiple points of patient interaction: face-to-face communications with patients at the front desk, tent-card signage and brochures in provider reception areas, promotional messages on statements highlighting the convenience of personalized online payment, prominent mentions of the provider’s Web address to access additional information on all communications, in-office and direct-mailed brochures, telephone on-hold messages, patient newsletters and advertising.
The effects of the PPACA will be dramatic, and healthcare providers must find new ways to conduct their businesses. Personalized online payment solutions are proving to be one powerful way to achieve multiple benefits: accelerated payments, increased collections, reduced bad debt, enhanced billing accuracy, increased operational efficiencies and lower paper and postage costs.
Mark Snow is a vice president at Revspring. For more on Revspring (formerly PSC Info Group): click here.
