The US healthcare payments market is projected to reach $586.1 billion by 2025, more than double the $274.9 billion in 2020, a compound annual growth rate (CAGR) of 16.4%, according to MarkWide Research (MWR).
Digital payments have changed the way consumers handle transactions, and healthcare is no exception. According to InstaMed, 90% of consumers prefer to pay bills online, even though 70% still receive medical bills by mail.
Healthcare providers that don’t offer electronic payment options are taking a risk. Three-quarters of millennials say they would switch providers for a better healthcare payment experience. In other words, the quality of payment processing may sometimes outweigh the quality of care itself when it comes to customer experience.
Payments in healthcare: challenges and benefits
Billing and collections are significant, but necessary, expenses for healthcare providers. Eliminating much of the manual processing can reduce costs and provide other measurable benefits. However, there are also some challenges associated with healthcare payments.
The challenges of healthtech payments
Payment processing is a sophisticated and complex component in any industry. In healthcare, there are added layers of security and confidentiality to protect patient information. The payment processing system you deploy needs to enable seamless, secure payments while respecting patient confidentiality.
Administrative and manual processes
Healthcare organizations today spend significant time on administration and paperwork. According to one study, physicians devote more than three hours each day to admin work.
A seamless workflow that allows the facilitation of payments can help alleviate this challenge and also relieve the workload for staff. In many practices, there is still a continued reliance on manual processes, mailing bills and statements, following up on payments and handling paper checks.
Delayed payments
This manual process also creates a significant lag in payment processing. Even if patients pay upon receipt, it can take weeks for the processing journey to complete. An automated digital process for managing payments can significantly speed up payment cycles to help with cash flow.
Fragmented payment options
Another challenge today’s healthcare providers face today is the increased number of payment options creating fragmented processes. Accepting payments for a broader range of third-party providers can offer more attractive options for your patients, but it can also create a bigger administrative burden on your finance team.
Potential for Payment Fraud
More providers can also create more opportunities for fraud. A 2022 study by the
Association for Financial Professionals (AFP) revealed that 71% of organizations were victims of payment fraud. Checks and Automated Clearing House (ACH) debits were the most common types of fraud.
Dealing with incidents increases the amount of time (and cost) to rectify. A modern, digital healthtech payments platform provides built-in fraud detection technology that helps mitigate fraudulent payments, while encrypted payment data can protect financial transaction information from external threats.
The benefits of healthtech payments
Perhaps the biggest benefit is reducing costs through payment orchestration. An Adobe study found that every bill or invoice costs between $15 and $40 to send, so handling payments manually is a very expensive way to do business.
At the same time, healthtech payment solutions increase security using encryption to protect patient and practice information and provide an easy way for patients to pay bills securely. Unlike paper checks that can be stolen, electronic payments are safe from thieves that might intercept mail.
With an automated digital healthtech payment solution in place, there’s no more 'the check is in the mail.' When accounts become overdue, you can request patients to make immediate payments online.
Implementing a healthtech payment solution provides additional benefits, including:
- Quicker payments processing
- Automated onboarding for new patients
- Creation of new revenue streams
- Acceleration of payment receipt
- Enhanced payment security
Three stages of the healthtech payments journey
Our team follows this three-step strategy to assist your organization in becoming a payment facilitator (PayFac).
- Strategy
The first stage is to determine which payments journey best supports your strategy. For example, depending on your business model, you may prefer:
- Straight Payments Processing
- PayFac Partner Referral
- Managed PayFac
- Registered PayFac
This stage includes vendor research and feature benchmarking. With Endava, you would get a high-level roadmap for PayFac deployment, vendor recommendations, a business case cost model (cost vs. revenue) and a request for proposal (RFP) for vendor selection.
- Discovery and solution design
The discovery and solution design phase includes a deep-dive analysis of the current platform setup and develops the architecture and implementation plan to go to market. This includes platform architecture features, such as:
- Component capability mapping
- Quality assurance standards
- Deployment strategy
- Security, regulatory, and compliance frameworks
This stage also focuses on product management and user experience, including:
- Mapping healthtech payments journeys
- Creating user journeys and user personas
- Building out product backlog
- Detailed user stories for build sprints
- Statement of work for build
- Build, launch and evolve
Finally, we execute the implementation plan by building out the payment orchestration/payment facilitation features and integrating any third-party services.
This phase includes creating low-level designs for each application module and a detailed database design. Next, a minimum viable product (MVP) version is built using the Agile methodology, with extensive unit and regression testing to assure quality. Automation is enabled to facilitate seamless processing.
Before general release, real clients launch and test a pilot product to gather data on production usage and solicit real-world feedback. Feedback is then incorporated into the product backlog for improvements.
How we can help
Employing the right payment processing solution and choosing the right tech partner can make a significant difference in your success. Following the three stages of the healthtech payments journey will ensure the right strategy is in place.
Our team can guide you through the process, handling all of the details so you can focus on your core business and patients. With more than 20 years of experience in software and technology for some of the world’s largest brands, we support the integration of healthtech payment facilitation platforms to serve healthcare providers and clients. As a global B2B and B2C technology partner, our experts help provide scalable solutions that make payment processing more efficient and effective.
Contact us today to discuss your healthtech payments journey and see how we can help.