MedCity Influencers, Hospitals

The Next Generation of Healthcare Payments: Convenient, Seamless, Simple

By supporting next-generation payment methods that boost security and convenience for consumers, providers can enhance patient satisfaction and loyalty.

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Because patient needs and financial situations often differ dramatically, it is essential that healthcare providers give patients options and flexibility with their payment experience throughout the entire patient journey.

At one end of the spectrum, patients have expressed a willingness to pay more for services not related to clinical quality. For example, 4 in 10 patients would pay more for convenient care access, according to a 2022 survey by YouGov and AKASA. Similarly, 40% of patients said they would be willing to pay extra to schedule an appointment quickly, the survey found.

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On the other end of the spectrum, many patients are struggling to afford care and medical bills. For example, an estimated 41% of people, or about 100 million adults, are dealing with medical debt, ranging from under $500 (16%) to $10,000 or more (12%), according to a 2022 report from the Kaiser Family Foundation.

Of those experiencing medical debt:

  • 24% say they currently have medical or dental bills that are past due or that they are unable to pay
  • 21% say they have bills they are paying off over time directly to a provider
  • 17% say they have debt they owe to a bank, collection agency, or other lender
  • Another 17% say they have medical or dental bills they have put on a credit card and are paying off over time and,
  • 10% say they have debt they owe to a family member or friend for money borrowed to pay medical or dental bills.

With so many struggling to pay for medical care at the same time other patients are prioritizing ease, convenience, and familiarity, it is essential for providers to provide flexible payment options throughout the patient continuum.

Following are three healthcare payment trends expected to accelerate in the coming years:

  • Support for expanded, next-generation payment methods: Consumers expect retailers to offer flexibility in how payments are made and are beginning to expect the same from healthcare providers. Look for providers to more widely embrace next-generation payment methods such as digital wallets (popular examples include Apple Pay and Google Pay) and buy-now-pay-later (BNPL) and installment plans, which are especially helpful for procedures or medications with high out-of-pocket costs. BNPL payments, for example, are expected to account for nearly a quarter of all global ecommerce transactions by 2026, up from just 9% in 2021, according to Juniper Research. While BNPL is attractive across all age groups, the option holds particular interest for younger consumers. In 2021 eMarketer forecasted that 44% of Gen Z and 37% of millennials would make a BNPL payment in 2022, compared to 23% of Gen X and 9.4% of Baby Boomers. Though growth of digital wallets, BNPL plans, and installment plans in healthcare have lagged other industries, these methods will continue to grow in popularity as patients increasingly expect their healthcare providers to accept the same payment methods they use with other merchants.
  • Simplified payment acceptance: Healthcare providers should endeavor to make the payment process as painless and seamless for patients as possible before, during, and after the visit. This means supporting easy options such as near-field communication contactless payments, text-to-pay, and in-app payments. Similarly, providers can improve collections by giving patients the ability to pay in advance of visiting with their physicians. Tools embedded in patient portals can deliver estimates of out-of-pocket costs before the visit, based on expected visit type and patient history. With this approach, providers can collect not only co-pay funds at check-in but also the probable out-of-pocket costs. In addition, the patient’s credit card information can be stored in a token at the time of service, then charged for any balance due after the claim is adjudicated.
  • Payment tokenization: As care delivery evolves towards digital options such as telehealth, so too must the healthcare payment experience evolve towards digitization. One important example of this trend is payment card tokenization, a process of storing consumers’ payment data for future use for greater ease and simplicity. Tokenization replaces cardholder data with a unique identifier known as a “token,” which allows medical practices to safely and securely process customer payments without storing sensitive payment information on their own servers. This gives patients the ability to quickly and easily pay their balance using the “card on file” without the need to hand their physical card to the provider each visit. Additionally, many leading payment platforms offer an account updater service, which enables merchants to ensure the card is up-to-date before attempting to take payment, reducing declines and improving payment collections for installment payments.

The payment process is an integral part of the overall patient experience. By supporting next-generation payment methods that boost security and convenience for consumers, providers can enhance patient satisfaction and loyalty. The easier it is for patients to pay and the less friction introduced to the overall payment experience, the greater the likelihood for healthcare providers to collect.

Photo: Auris, Getty Images

Johnathan (John) Welch is Chief Product Officer at Sphere, where he leads the Product organization and drives the roadmap for Sphere's payment and healthcare focused product suite. Originally from London, England, John is an internationally minded payments expert with over 15 years of experience working for some of the largest payment providers and banks in the world, including leadership roles at Wells Fargo, JPMorgan Chase, WorldPay, and MasterCard.

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