Healthcare payments are a $3 trillion industry - but the lack of urgency to innovate has resulted in confusion, inefficiencies, and security issues
This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.
Relative to many other sectors around the globe, the US healthcare industry has been notoriously slow to embrace new payment systems and processes.
For example, approximately 77% of healthcare providers still use paper-based patient billing methods, according to an MGMA and Navicure survey. The lack of urgency to innovate has resulted in confusion, inefficiencies, and security issues among stakeholders.
However, this stagnation is enabling payments firms to capitalize on two key trends to disrupt - and capture a piece of - the $3 trillion healthcare industry:
- The consumerization of healthcare. Consumers are increasingly being urged to play a more prominent role in managing and paying for their own health. In effect, they've become better informed and more critical of the quality of health services. Considering that the billing process is typically the first and last interaction a patient has with a provider, a negative experience could directly impact a healthcare firm's bottom line - only 15% of patients who reported a less than satisfactory billing experience would recommend the hospital to others, according to Becker's Hospital Review.
- The digitization of healthcare. Healthcare legislation, rising costs, and a shift from fee-for-service care to value-based care are incentivizing payers and providers to seek out digital solutions that drive down costs and improve services.
Now is the time for payments hardware, software, and processing firms to introduce specific solutions that accommodate the shifting landscape. These could include digital payment options, such as online checkouts or point-of-service mobile wallet acceptance, or value-added services that enhance the overall payments and billing experience. However, before payments companies introduce new solutions, they must navigate the highly regulated and complex industry.
In this report, Business Insider Intelligence, Business Insider's premium research service, explains how a typical healthcare transaction is structured, identifies the major players in the industry, and pinpoints the most pressing pain points for stakeholders. We then look at the opportunities available to payments companies, and explore specific solutions that could help them attract partners in the space.
Here are some of the key takeaways:
- Healthcare in the US is a key industry for payments firms - spending increased 3.3% to reach $3.3 trillion in 2016, according to the Office of the Actuary in the Centers for Medicare & Medicaid Services.
- Despite the size of the market, very few new opportunities have opened up for payments companies because of the healthcare industry's slow innovation and the complex regulations around entering the space.
- However, two key trends - the consumerization of healthcare and the digitization of healthcare - will put some payments companies in a strong position to capture a larger share of the market.
- The payments firms that rise to the top of the market will have to offer digital solutions that accommodate the shifting landscape, such as mobile wallet acceptance - 61% of consumers reported having interest in using mobile wallets, such as Apple Pay or Samsung Pay, to make healthcare payments, according to InstaMed.
- Payments companies will also have to introduce value-added services that appeal to healthcare providers while differentiating their offerings from competitors, such as easy-to-understand billing, integrated check-ins, and AI-based engagement tools.
In full, the report:
- Tracks the growth of US healthcare spending.
- Identifies subsets of healthcare payments - specifically, where payments are coming from and where they're going.
- Explains the intricacies of a healthcare transaction and pinpoints where there are potential bottlenecks.
- Details what some of the leading players in the healthcare payments space are doing to differentiate themselves.
- Lists some specific solutions that payments companies could turn to in order to attract healthcare partners.
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