As the U.S. healthcare system navigates through continuing waves of COVID-19, it is already clear that some of the changes adopted during the early months of the pandemic are transforming healthcare payments for the future. New processes prompted by the dramatic decline in face-to-face contact and rapid increase in telehealth visits accelerated the trend toward digitization and automation of payments.
Yet while much of this digital healthcare transformation was driven by the challenges of the pandemic, it will create ongoing benefits throughout the system.
With elective procedures canceled, some staff working remotely, and telemedicine replacing many office interactions, digital solutions like patient portals and contactless payments went from aspirational to operational almost overnight. Yet the convenience they created for consumers and efficiencies they enabled for providers showcased a need for digital transition that had been building for years.
“Once you start to unlock that digital door, you can really accelerate the change,” says Justin Meany, Senior Vice President of the Healthcare, Higher Education & Nonprofit Banking Division at U.S. Bank. “It can help on the payment side, it can help on the collection side, and it can help with credit card processing. They all become much more integrated and aligned internally.”
Realistically, the need for telehealth changed the paradigm, forcing doctors and patients who might have been hesitant to even test the technology under normal circumstances to embrace it during the pandemic.
“During that whole time, people adapted to Zoom and FaceTime calls with family and friends,” says Meany. “Healthcare consumers are already showing signs of becoming more comfortable speaking with their physicians in a virtual environment.”
During the early days of the crisis, video appointments became an effective way to keep patients connected to their doctors without needlessly exposing them to others. How much it will be used in the future will be determined by individual systems or clinics, but the impact on patient expectations is already clear.
“Once people are exposed to a patient portal or new payment method, they rarely take a step back,” Meany says.
In fact, a study conducted by U.S. Bank in January, right before the pandemic began, indicates consumers were already receptive to digital changes. According to the 2020 Healthcare Payments Insight Survey Report, consumers who used these emerging payment methods all showed high satisfaction:
Beyond that, digital payments had already become common by the time the survey was conducted. Three in ten consumers already paid medical bills through a provider portal, and 22 percent had used online bill pay.
One of the most obvious benefits of this digital transition is the virtual elimination of cash. “Every health system is looking at this as the catalyst to go cashless, at least as much as they can,” says Meany. “Some health systems have eliminated cash altogether and told patients in their various touch points, whether it's a clinic or a physician's office, that cash is no longer accepted for copayments, for example.”
Cash makes no sense in a telehealth environment. Without an in-person visit, there’s no place for in-person payment. Yet the benefits extend well beyond consumer convenience. Cash is a safety concern for consumers and staff when faced with the risk of passing a contagion such as COVID, and cash is expensive to process.
“Accepting a $20 or $25 copayment can cost as much as $50 in cost control,” says Barbara Martin, Vice President of Healthcare, Higher Education & Nonprofit Payments at U.S. Bank Payment Solutions. After all, cash needs to be stored in a safe, transported in an armored car, and posted manually in an accounting system before it becomes liquid.
“It’s just very inefficient,” Martin says, “so there’s great incentive for health systems to move towards cashless options, especially credit/debit card and electronic check (or ACH) payments, with so many emerging ways to pay.”
Still, consumers can be creatures of habit. Many still prefer to be billed by mail and pay with paper checks (in fact, 36 percent pay that way, according to the Healthcare Payments Insight Survey). Demographics play a role in their preferences. Cash is still popular in rural areas and the elderly are more likely to write a check.
Those payments can be quickly recorded and converted through a lockbox deposit to match the rest of the digital payments. However, offering electronic check or ACH payments can be attractive to those consumers. The key is often training health system workers to educate consumers and ask for other options.
“It starts with the patient experience,” Martin says. “When they first call in to schedule an appointment, work on scheduling and scripting that says, ‘how can we facilitate your payments so we're all safe and secure?’ Your staff can help them out while also making your payments more efficient, including options for secure storage of card data through use of tokens and payment plans to facilitate recurring payments.”
Meanwhile, if a consumer pays with a card, any refunds can easily be credited to that card, streamlining another expensive and often inefficient part of the payment process.
As with most technology, it takes proper systems integration to realize the full benefits. Adding telehealth software to patient management, medical records, accounting systems and payment processing can create one seamless system, or an unwieldy mess.
“It is a real balancing act to add new payment channels and features into a patient experience, and avoid a disparate and disjointed experience,” Martin says. “Streamlining vendor management is really important to make sure I.T. has what they need, and the revenue cycle has what they need.”
As new telehealth software continues to emerge with varying functionality and features, it helps to start with some simple questions.
Just as important, don’t forget patient integration. In other words, make sure the system integrates with the major web browsers: Chrome, Firefox and Internet Explorer. Just as important, confirm it comes with Android and iPhone apps to improve access for all patients.
As the healthcare experience becomes more digital, clearly the security concerns become more complex. Whether HIPAA compliance or data and fraud security, the system must be secure.
“How do you make sure the card number isn’t exposed?” Martin says. “How does it get into the device or platform without anybody seeing the number? That’s where the need for encryption comes in.”
Fortunately, the 2020 Healthcare Payments Insight Survey found that consumers have a high level of confidence in the security of their healthcare payments. For instance, 87 percent say using a credit or debit card for healthcare payments is very or somewhat secure, and 83 percent believe healthcare providers are doing everything they can to protect their data.
Not surprisingly, there is a greater concern for healthcare data security in the industry. In the same survey, 50 percent of healthcare information technology (HIT) company executives said consumer payment card data is at greater risk in healthcare versus other industries, such as hospitality and retail.
The top four reasons for data security concerns are:
“The healthcare consumer may not notice,” Martin says. “They're surrounded by all of those other HIPAA disclosures and HIPAA policies and procedures that provide them with assurances about the security of their data.” On the other hand, she says the I.T. professionals tasked with overall security see the risk associated with lack of security standards for payment processing across their broad enterprise.
“That calls attention to the need for utilization of contemporary devices that support security features such as chips and PINs (personal identification numbers), and equally as important, a Point to Point Encrypted (P2PE) environment to reduce overall scope of risk related to card acceptance,” she explains. “As there are more digital consumers, it becomes even more important to improve that digital security.”