Digital transformation in healthcare has been too slow and a lack of collaboration may be the culprit
Yusef Qasim, President of Payments Optimization, Zelis
Have you been on TikTok lately? Feel free to laugh if the answer is no but hear me out: in between the dances and the memes, one can find real insights on American life—and not excluding consumers’ views of their healthcare experiences.
One woman recently posted a video, aghast; she had received a disbursement check addressed to her cat—her cat named Gandalf (I’m not kidding)—for an overpayment of his prescription. It doesn’t take a wizard to figure out that she saw this as a laughable example of a not-uncommon payments experience. All jokes aside, we have a person in their 20s, receiving a paper check (and they have limited, if any, experience with paper checks), and no idea how to handle making a deposit for a “dependent.”
While this example is consumer-focused, the convergence of an antiquated payment method, inaccurate consumer data and a confused healthcare participant shines a light on all the friction within healthcare payments. It makes you wonder about the frequency of these mistakes and of both the financial and resource costs to payers, providers, and ultimately the system at large.
It could be argued that the TikTok generation’s influence on our industry might be just a whisper, that they’re not involved with the day-to-day, back-end problems we have been working to solve.
But… how far have we gotten?
Forty-three percent of payments executives remain inactive or reactive in converting providers to electronic transactions like ACH/EFT and electronic remittance advice, and only 7% of healthcare payers can be classified as “best in class” in terms of payment harmonization. Even when electronic payment processes have been deployed, 63% have a mix of automated and manual payments, and an additional 8% remain manual.
Despite a post-Covid uptick in electronic adoption among providers, inflation and a rise in labor demand has forced an increase in direct administrative tasks for them as cost and staffing become bigger challenges. Coupled with rising postage costs, ongoing inflation, new tax proposals and the most industry legislation we’ve seen in decades, the need for a consolidated, digital shift has grown to a critical level of importance.
One culprit behind the inefficiencies in electronic payments may be inadequate collaboration between B2B payments officers and network development and management teams.
We developed the B2B Payments Harmonization Index to better understand and measure factors like the current forms of payments available to providers, as well as the appetite for expanding electronic payment methods in reimbursements and overpayments (disbursements) to in-network and out-of-network providers.
Read the B2B Harmonization Index for further insights on how to better partner with providers and modernize the healthcare financial experience.
- Payers are making valuable strides in harmonizing and modernizing their payment functions, but there is room for improvement. Healthcare payer responses yielded what resembles a bell curve. Only 7% scored Best in Class, and 22% scored as Lagging.
- Electronic remittance and reimbursement are very important for payments executives. Payments executives view driving provider satisfaction by delivering electronic remittance and reimbursement as a key part of their role.
- Actions (or inaction) speak louder than words. Forty-three percent of payments executives remain inactive or reactive in converting providers into electronic forms and ACH/EFT, which is at odds with the level of priority they place on the topic.
- Payment integrity functions can increase the level of automation in the pre-pay process. Today, 63% of respondents have a mix of automated and manual payments, and an additional 8% remain manual.
- Health plans are prioritizing building out a personalized member experience. While many factors determine the magic mix, providing information to decide on medical care has emerged in importance. Provider quality scores and reviews, price comparison, and shopping tools are also key ingredients.
For more, read the full B2B Payments Harmonization Index here.