Healthcare is a trillion-dollar industry, yet it still uses an antiquated payment system. This is just one of the reasons the healthcare industry wastes $750 billion a year, with $190 billion being wasted in excessive administration costs. In an age where disruptive technologies and the Internet of Medical Things (IoMT) are becoming the norm, healthcare payments are trapped in a “that’s how it’s always been done, so that’s how we do it” way of operating.
Read on to explore three key reasons providers should upgrade their payment systems.
Reduce The High Cost Of A Manual System
Payers often pay providers via printed checks and ACH, two of the oldest transaction systems available to businesses—and some of the most inefficient.
While payers incur costs to print and mail checks, providers spend as much as $31 to manually process each invoice and paper check. Part of this cost comes from the manpower the process takes; detailed claim information like line items, various codes, and attending physician details are not attached to payments. Without this information, provider staff is forced to spend time reconciling payments with electronic remittance files that are often sent separately.
If payments were partially paid or overpaid, the staff is forced to identify these claims, confirm the errors, and resubmit payment requests. In some cases, this step is not taken which leads to missed chances for revenue and unbalanced books.
Modernized healthcare payment systems prevent this type of waste: the most innovative digitized payment systems facilitate easy-to-process payments. This leads to less wasted staff time. Payments include full claims information, so staff can immediately determine what the payment was for, whether it was adequate, and whether any further action needs to be taken.
In fact, on average, each electronic payment costs about $3 less to process than a paper payment—leading to immense savings when one considers how many payments are made each day.
Reduce The Time It Takes To Receive Payments
Paper checks and automated clearing houses (ACH) are not only costly for both providers and payers, but they’re also incredibly slow. However payments are made, they take far too long to arrive to providers — then, as they contain no claims data, more time to process.
In an age when the average person can send payments in an instant at the tap of a button on their phones, slow, contextless healthcare payments stick out like a sore thumb.
Modern payment systems enable near real-time transactions from payer to provider, speeding up the reimbursement process by days or weeks. Not only that, but these fast payments are sent with just as much security and HIPAA compliance as checks or ACH payments and are outfitted with comprehensive tracking capabilities.
Offset the Rising Cost of Healthcare
No one wants patients to pay any more for healthcare than they already are. Raised costs lead to patients avoiding the doctor’s office and coming in when illnesses have progressed too far to ignore—costing payers and patients even more than they would have paid for preventive office visits.
But when the average premium has risen 19% over the past five years and healthcare costs are rising far faster than the general economy, it’s hard to avoid raising fees on patients.
This price hike is one of the many reasons healthcare organizations are looking for greater efficiency elsewhere. If the cost can be reduced by the simple act of streamlining transactions between payers and providers, modernizing healthcare payment systems seems like a clear answer to a difficult problem.
Integrate The Business Environment
When payers and providers work in silos, they struggle to save money and guarantee a seamless experience for patients. Fragmented data is a major cause of silos in the healthcare industry.
Completing transactions via checks and ACH complicates tracking and recording transactions. The payments are often untrackable except by manually maintained spreadsheets — which are unreliable and often unsearchable. Since electronic remittance files are sent separately, the payments lack context until someone manually marries payments with their claims data which leads to masses of unusable data that can’t be reliably analyzed or reviewed.
An upgraded healthcare payment system eliminates silos for payers and providers, creating a collaborative, modern process that benefits both groups.
Trackable payments and a history log of past payments simplifies the administrative work it takes to track transactions. Since full claims data can be attached to each payment, providers no longer have to marry that data with the payment itself, leading to faster recognition of payment issues and faster resolutions as well. With clean, enriched logs of payments, payers and providers can analyze data to find even more efficiencies.
This type of integration cuts costs and manual working hours for providers—and, ultimately, leads to less expensive, more streamlined services for patients.
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Interested in modernizing your payment system? Contact us to learn about our pilot program.