With the increase in patient responsibility fees and the “consumerization of payments”, how you get paid is now playing a critical role in collections efficiency and your overall patient experience. Paying by check is not convenient for patients, and mailing statements is costly and inefficient for providers. Many healthcare payment portals are built with outdated tech, are difficult to use, and don’t offer patients flexible payment options. We believe it’s time to modernize payments in healthcare, and that medical practices and their billing & RCM partners need automated systems that reduce administrative burden and provide consumer-friendly payment experiences.
Nearly 153 million Americans have employer-sponsored health insurance plans. At the same time that health insurance costs are increasing for employers, insurers are shifting a larger percentage of healthcare fees to patients in the form of higher copays, higher coinsurance rates, and higher annual deductibles (KFF, Oct 2023). In 2023, the average copayment was $26 for primary care and $44 for specialty care, and coinsurance rates were approximately 20% of fees. The average deductible amount has increased 53% over the last 10 years, and in 2023 the average individual was responsible for $1,735 in fees before services were paid by their plan. At small companies, which employ 46% of Americans, the average worker was responsible for $2,434 in patient responsibility fees in 2023. Regardless of the deductible, most covered workers also pay 20% or more coinsurance fees with each visit.
With patient financial responsibility fees expected to become 50% of healthcare revenue for practices in the coming years, it’s crucial for providers and their billing and RCM partners to modernize their approach to patient billing. Most practices and billing companies rely on paper-based processes that are cumbersome, expensive, and slow. Practices we’ve worked with have told us that they typically mail out 3 or 4 statements to each patient, it often takes over 3 months to collect, in many cases manual follow-up by phone is needed, and about 15% of bills are never collected. To make matters worse, studies show that when bills exceed $5,000, collectability drops to 32%. Meanwhile, patients we surveyed told us that the main reason they don’t pay balances under $500 quickly is because it’s inconvenient to pay. The most common reasons cited were: no stamps or checks readily available, no online payment option, difficult to use payment portals, and dissatisfaction with billing call centers.
Modern payment experiences powered by companies like Apple, Google, and Uber have set high expectations about how transactions should be handled in the digital era. Apple, through its ApplePay service, allows consumers to make purchases effortlessly with a single touch, fostering a frictionless and secure transaction experience that has created new expectations for speed and privacy. With rapid uptake by consumers and businesses, Google followed suit with GooglePay. In parallel, Uber showed us how easy it could be to reserve, pay, and tip all from a mobile device in an instant. This consumerization of payments has raised consumer expectations for convenience, pressuring businesses across industries to upgrade their payment systems to ensure a smooth, efficient, and secure payment experience that matches contemporary lifestyles.
For solo practitioners and small groups, the increased shift towards patient financial responsibility will cause significant administrative overhead and financial burden on the business if new technology and automation is not adopted. At the same time, patient expectations for an elevated payment experience creates additional pressures. Taken together, the shift towards patient responsibility and the consumerization of payments, allow us to make real progress towards one the key challenges for private practices today – the burden of managing a revenue cycle. As a billing company dedicated to supporting solo practitioners, small groups, and billing companies, we're here to navigate these challenges together. We offer an easy-to-use and purpose-built solution that enhances billing efficiency; improves patient satisfaction with effortless, HIPAA-compliant payment experiences with flexible payment options; and ultimately contributes to the financial health of your practice.
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