Facing more payments because of high-deductible insurance plans, 72% of consumers say they prefer to use electronic payment methods such as payment cards, Automated Clearing House or digital wallets to cover health care costs.
And 64% say they would be interested in using new mobile payments options such as Apple Pay, Samsung Pay or Android Pay if possible, according to InstaMed's 2015 health care payments trends report. It's just a matter of getting more providers to offer those options.
As many as 75% of consumers use online payment channels to pay household bills, with 18% of all online payments coming from mobile phones, the report said. They are numbers the health care industry should embrace, the report suggests.
Clearly, 65% of consumers want to pay healthcare premiums online, while 57% want to schedule automatic deductions for their recurring premium payments.
Last year, InstaMed reported that 93% of consumers in 2014 said they would be interested in a one-click online payment option on the Website of their provider. Thus, the call for convenience in healthcare payments is mounting.
The health care payments trend report includes quantitative data from more than $165 billion in payments on the InstaMed network, and three surveys through LHK Partners Inc. of respondents representing more than 100,000 health care providers and 3,000 payers nationwide using various insurance plans.
In addition to specific desires about how to pay, consumers are tired of current healthcare payment processes and paperwork. That becomes increasingly important, considering InstaMed predicts that by 2024 nearly $1 of every $5 will be spent on health care in the U.S.
"This year’s report shows that a critical new stakeholder has emerged — the consumer," said Bill Marvin, president and CEO of InstaMed. "As consumers spend more on healthcare than ever before, they are making it clear that they will not put up with outdated, confusing, paper-based payment experiences to pay health care provider bills or make premium payments.”
The health care payments market is unlike any other in the payments ecosystem because it is highly regulated and has a three-party dynamics with providers, payers and consumers, Marvin said.
"The rising costs of health care have led to new health benefit structures that shift costs from the government and large employers to consumers," Marvin said.
Even with mobile and digital technology in place to handle health care payments, the percentage of paper vs. electronic bills nearly doubles for medical bills compared to other consumer bills. Almost 90% of consumers received a paper medical bill from providers in 2015, with 65% of those consumers saying they pay all other non-health-care bills online, the report said.
In addition, providers print and mail an average of 3.3 statements per health care encounter to collect from a patient, despite the fact that less than one-third of consumers want to use checks to make health care payments. However, even though use of payment cards has increased annually, 89% of providers said they were still receiving paper checks from at least one or more of their payers for medical bills.
"Health care organizations tend to look at this market through their own lens, which yields inherent bias toward providers or payers," Marvin said. "The challenge of analyzing this marketplace is that the transactional activity and perspectives of providers, payers and consumers must be considered to reveal the real trends in the market."
The desire for new payment options comes with concerns about security for most consumers, but continuously changing financial regulations, Payment Card Industry standards and the EMV chip card migration complicates the process for service providers who want to make security a top priority, the report said.
Overall, the health care industry can no longer view digital payments as "something that is coming" but rather a technology that is already here, said Michael Trilli, senior healthcare analyst for Aite Group.
"Health care providers need to stop and think about that and embrace that notion before we will see real change," said Trilli, who has monitored the growth of digital technology in medical payments.
Mobile pay will become more relevant for recurring medical payments, such as premiums on policies. In the meantime, medical payments will follow a normal bill payment life cycle as consumers find it convenient to pay via their bank's online bill pay service or directly to the biller themselves, Trilli said.
It may actually become easier for providers to introduce new payment options for medical bills if they eliminate a lot of the confusion surrounding those bills in the first place.
Seventy-six percent of respondents in the InstaMed survey said they were confused by their bills, and 47% said they would switch providers for the ability to understand the cost upon scheduling appointments and to easily understand and pay a bill using a preferred method.
Confusion remains with medical bills, but health pay systems are developing innovative solutions to address these problems, Trilli said. Like other factors in the health care payment industry, it is now a matter of providers embracing those changes as well, he added.
"The reality is consumers will continue to rebel and not pay or, more damaging to health care providers, take their business elsewhere," Trilli said. "Those are two very compelling reasons to fix the bill."