Can health care provide an 'Amazon experience' for payments?

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Consumers are making a bold request of their health care providers: Make it as easy to pay for services as it is to buy products from

Or, put another way, make it more like a retail or household bill-paying experience by making an online portal to handle payments and bill details. Surprisingly, that sort of wish list from American consumers is the same across age groups, according to new research from health care payments provider InstaMed.

As many as 68% prefer electronic payment methods for medical bills, the 2016 report says, and four out of five cite a desire for online payment channels when paying health insurance premiums.

Consumers' preferences fell in line with past InstaMed research, but with a growing awareness of what omnichannel means and how it could make health care payments easier. In the retail world, omnichannel means merchants can handle communications and sales over multiple touchpoints, including in-store and on mobile devices.

"The fact that this really is a concern across all generations — and the speed in which the omnichannel experience has created a demand for convenience in health care payments — really jumped out at us," said Deirdre Ruttle, vice president of marketing for InstaMed.

In short, consumers can't figure out why it is becoming easier to make payments in all other facets of their lives, but trying to understand a health care bill and make a payment remains a jumbled mess. "This is not just about millennials wanting better experiences; it is about all health care consumers," Ruttle added.

Consumers are demanding more from health care providers, with 92% saying they want to know their payment responsibility prior to a visit to the doctor. Another 74% remain confused by the explanation of benefits paperwork from the insurance provider.

Through online surveys conducted by marketing research firm LHK Partners, InstaMed received feedback from more than 100,000 health care providers, 3,000 health care payers and more than 2,700 consumers who paid a medical bill and had insurance in 2016.

"The costs for consumers are getting much higher these days, so they are paying closer attention," Ruttle said. "The consumers' responsibility and the amount they have to pay out of pocket is not going to decrease," she added. "That is just a reality, and it has huge implications for payments because providers will be collecting more from patients, and those patients will be holding them to higher standards."

That sentiment is not likely to change, no matter which way the political winds blow in the next federal version of a health care act.

Citing data from recent consumer assessments of health care providers [HCAHPS surveys], InstaMed noted that patients satisfied with the billing and payment process at a hospital are five times more likely to recommend that hospital.

Indeed, patient satisfaction ratings with a hospital drop by an average of more than 30% after discharge as the billing and payment process unfolds, Ruttle added.

With that type of consumer unrest, providers that do not approach billing and payment acceptance through omnichannel options "need to strongly consider it now," said Michael Trilli, senior healthcare analyst for Aite Group. "The shift in financial responsibility to patients will not be stunted, it will only accelerate."

A change in the process can start with providers simply monitoring how they deliver medical bills, Trilli said.

"In the absence of a bill redesign, bill delivery influences payments," he added. "The type of bill one receives from the provider influences the channel and tender type. Give them a paper bill and they will drive towards a paper payment."

Aite's recent research on health care payments supports that theory, with 38% of respondents receiving a paper bill saying they sent a payment by mail. Only 14% who received an electronic bill paid that bill through the mail.

Of the 263 million bills sent on paper in the mail in 2016, 96 million were received by baby boomers, 71 million by Gen Xers, 55 million by millennials, and 41 million by seniors, according to Aite.

For those receiving only electronic bills, millennials paid 16 million electronic bills last year, while Gen Xers and baby boomers each paid 10 million and seniors paid 6 million.

"The omnichannel movement is mature enough now that providers should be working with their payment vendors to optimize collection costs," Trilli said.

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