A female doctor uses a tablet to show a male patient an x-ray in her office.

Improving Patient Experience with Digital Payments


Streamlined accounting can speed payment processes and reduce collection costs for medical practices and patients.

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While healthcare technology is advancing at unprecedented rates, the process of actually paying for treatment has tended to lag behind. Medical payments have long remained notoriously slow and inefficient, with many providers still relying on paper invoices and faxes, and requesting payment via check.

"Healthcare is this rare industry where we all go and get a service without having to pay for it first," says Megan McCarthy, Vice President and Senior Treasury Management Product Manager in Healthcare at Fifth Third Bank. "Historically, the billing process and payment method was slow and manual, but patients weren’t paying too much attention because the transactions were mostly handled by insurers and the insurance payer was usually taking care of it."

However, with the rise of high-deductible health plans and health savings accounts, the onus of paying for treatment is beginning to fall more on patients themselves. For a typical ambulatory care center, approximately 20% of revenue now comes directly from patients, compared to 5% 10 years ago. Because high-deductible health plans are the norm, healthcare providers need to make sure patient requirements for coinsurance and deductibles are taken into account in their payment systems in a streamlined manner, such as offering to accept payments by credit card.

In a survey of healthcare practitioners during a recent webinar hosted by Fifth Third Bank, 50% of respondents said evaluating the billing process would do the most to improve the patient payment journey, while another quarter said improving patient check-in tools would be most beneficial and 25% said expanding patient payment options would do more.

In fact, practitioners said estimating patient responsibility was the biggest challenge they face, followed by the high cost of collection (33%) and efficiently posting payments to the practice management system (17%).

This has created a demand for less cumbersome payment processes and a greater variety of payment options, from contactless cards to PayPal or Venmo, particularly from younger patients. According to a study by pymnts.com, 50% of millennials used a mobile wallet to pay for healthcare services during the second quarter of 2022, as did 42% of Gen Z. To that end, Epic Systems recently enabled payment apps in its app orchard to offer Apple Pay and Google Wallet as options.

The hardest dollars to capture are when a patient has left the office, so it becomes essential to compress the payment system as much as possible before the patient arrives and while the patient is still in the office. A paper statement sent in the mail after the visit is not efficient. Providers need to remove the barriers to efficient payments.

Patient payments are part of what is described as the consumerization of healthcare. As health systems become more branded entities, patients have more choices, and the patient experience and overall journey become key factors in choosing a provider. If patients encounter a bad billing experience at one provider, they could move to another provider that will provide a better experience.

For providers looking to tackle their existing payment challenges, they may begin by doing an assessment of revenue leaks to see where the problem lies. Drilling into the patient revenue cycle and looking at how much they’re sending to collections each month can provide key data. In addition, understanding what percentage of outstanding payments are on the high end and might require patient financing, compared to how many are on the low end and can easily be paid by credit card, can be helpful.

Seamlessly integrating a new payment solution can take anywhere from a few weeks for ambulatory practices to several months for large health systems, but there are major returns on making the investment, including faster cash flow, higher operating income, streamlined operating flows, and improved patient experience.

In the future, it may be possible to customize medical payment systems so the way providers communicate with patients is unique to each person and the amount of their bill, ensuring that financing options are presented at the appropriate moments to optimize patient comfort and the profitability of the health system. It’s a different payment experience if a patient has a $25 bill or a $1,000 bill, so the payment experience needs to be customized to the individual’s financial situation. Some options to consider are customized payment cycles and providing consolidated bills as opposed to individual invoices.

McCarthy notes that different demographics prefer different payment channels, including digital wallets, text-to-pay, email-to-pay, and phone payments, so systems need to account for those preferences.

Having digital payment systems can also improve the way in which providers engage patients outside of their point of care. It ensures that patient records are automatically integrated within the provider’s healthcare software, making it easier to stay compliant with data privacy regulations such as the Health Insurance Portability and Accountability Act, but also making it easier to communicate before and after appointments.

Looking ahead, McCarthy says, "We are likely to see increasing partnerships between banks and healthcare providers as more medical payment systems are ushered into the digital era. Fifth Third aligned with this trend. We work closely with providers to offer technology solutions, such as Health Express, to help drive patient loyalty, as we know patients rank convenient billing and payment options as key factors in their overall healthcare provider experience."

To learn more about this and other treasury tools, contact your relationship manager, treasury management officer, or find a banker to learn more.

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