Navigating patient payment challenges across new healthcare delivery models

The following article comes from Dan Berger, the National Director of Healthcare at AxiaMed

If there is one thing certain about the future of healthcare in the U.S., it’s that people will still get sick or hurt and require medical attention.

At times, it appears that almost everything else is up in the air. In the next decade, how healthcare gets delivered and who pays for it will radically change. And despite the uncertainties, I believe it will undoubtedly be a good thing.

Our current system is broken – it’s expensive, inefficient, and too many people’s needs go unmet. We are also in danger of demand vastly outstripping supply. You don’t have to be an economist to know what that means for prices. Chronic conditions such as diabetes, hypertension, and heart disease are 21st century plagues, putting huge demands on a health system that is already overloaded.

So, what does this have to do with patient payments? Everything. There is virtually no scenario, financial model, or political reality where patients will pay less for their healthcare in the future than they do today. Patient payments currently make up over 20% of total healthcare costs and industry analysts expect that percentage to increase to 30% within 3-5 years. Rising costs, high deductible health plans, co-insurance, a larger uninsured population, and increased “self-pay” options all support this trend. For providers, this is a major challenge. Every one of us is a patient at one time or another and, as it turns out, we don’t pay our healthcare bills very quickly.

We’ve got good excuses. When a bill arrives from a doctor, hospital, or diagnostic lab, we are often unpleasantly surprised by the amount due. We probably did not receive an estimate before the visit or procedure. We almost always thought our insurance would cover more than it did and EOB statements (explanation of benefits) are notoriously difficult to understand. In some cases, the amount exceeds our available funds, resulting in unanswered and unreturned collection calls and, what’s worse, patient dissatisfaction with their provider, even if they were happy with their care and/or have recovered from their illness or injury.

If I’ve convinced you by now that this is a system literally careening out-of-control, I’ve accomplished my mission. Now for some good news. Some new healthcare delivery models have emerged that (inadvertently) help address the patient payment challenge. Telehealth companies with guaranteed “5-minute wait times” appeal to millennials and others in the on-demand economy for non-urgent doctor visits. For many, a $50-dollar upfront charge (which may or may not be covered under insurance) is well worth the convenience of a no-wait time virtual doctor’s visit in the home or office.

To address the growing demand for “same-day” service, new urgent care centers are popping up everywhere, including in-store clinics at local and nationwide pharmacies. I’ve even seen such mini-clinics staffed at several major airports. The unmistakable trend is that healthcare providers are now bringing care delivery closer to the patient, rather than requiring the patient to travel to them. The (somewhat) surprising benefit is that patients don’t seem to mind paying a fee for service either at check-in or check-out. Can Uber house calls be far behind?

Another fascinating area to watch is the exploding use of medical devices to remotely monitor patients 24/7, helping doctors understand the effects/adherence to prescribed medications and regimens as well as to spot early warning signs that may require intervention. Artificial intelligence and machine learning is already being used to automate alerts and triage patients under critical care conditions. In most cases, patients pay the costs of such services (again, subject to their insurance plan’s reimbursement policies). But one can envision a day where “healthcare-as-a-service” with recurring monthly billing becomes as common as streaming music subscriptions.

To support these new models, healthcare payment companies and independent software vendors must adapt as well. For now, credit and debit cards remain the preferred method of payment at point-of-care, online, and mobile. But healthcare payments are very different than retail credit card transactions. A healthcare payment is almost always considered protected health information (PHI) under the HIPAA Security Rule. Strong security controls must be in place to ensure that sensitive data does not fall into the wrong hands. HIPAA fines for PHI data breaches can be severe.

This is not a job for Square or Stripe. At point-of-care, payment cards should be swiped/dipped/tapped into payment terminals that immediately encrypt the card information. Other health-related information should be maintained and secured separately in the EHR, practice management system, or billing application. Online and mobile payments (“card-not-present”) present a different challenge. One-time payments, payment plans, and recurring billing models mostly rely on “card-on-file” technology. Again, given the sensitive nature of both protected healthcare information (PHI) and cardholder data, adequate security controls (encryption, tokenization) must be put in place.

In the distant future, mobile phones may replace plastic altogether and peer-to-peer payments powered by blockchain technology could become the norm. But for now, the dramatic increase in patient financial responsibility for healthcare expenses and emerging care delivery models are leading the healthcare industry towards consumerism, at least as it relates to payments.

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