Apple Pay may be just what the doctor ordered for health care payments, with its emphasis on both security and communication.
Health care providers are struggling to accept more patient payments as a result of the spread of high-deductible insurance plans. The easier it is to bill a patient and accept payment, the more likely the bill will get paid.
Companies like InstaMed and Simplee have been serving health care providers with payment options for several years. Since 2010, Simplee has offered the SimpleePAY platform that emphasizes communication between doctor and patient. And this week, InstaMed added Apple Pay to its own platform.
Most of Apple's concentration in the health care world has been tied to its wellness technology, such as HealthKit and ResearchKit. Apple also built fitness tools into its Apple Watch, enabling wearers to track their progress toward fitness goals. But these apps haven't overshadowed Apple Pay's potential to address the pain points of health care payments.
"Apple Pay combines both a secure payment method and a consumer-first approach to health care," said Chris Seib, co-founder and chief technology officer of Philadelphia-based InstaMed.
Through InstaMed, Apple Pay will be an option for a patient to pay a provider in the office at the point of service, as well as an in-app payment vehicle for bills, Seib said.
Apple has direct partnerships with hospital software company Epic Systems and the prestigious Mayo Clinic, but the technology giant needs to do more if it is to fully realize its plan for health care, said payments analyst Kevin Grieve, a partner with Chicago-based Strategy&, formerly Booz & Company. "They need to execute two more components in working with a payor and building integration across all of these partnerships," Grieve said.
Whether Apple takes a deeper dive into some of the health care industry's more pressing problems with security, payments, billing and collections remains to be seen. Right now Apple is merely laying the foundation, and its potential is limited by the bare-bones nature of the Apple Pay app.
Unlike other mobile wallets, Apple Pay is laser-focused on payments and security. It does not provide location-based offers or account management tools, though these capabilities can be included in card issuers' own apps.
"Apple Pay can help with a lot of the problems in payments, but at least in this current generation, it cannot solve the bigger problems in health care," said Gil Luria, analyst with Los Angeles-based Wedbush Securities, tells PaymentsSource.
"Nobody can decipher medical bills, but solving that is not Apple's forte," Luria said. "They deliver consumer products that can help consumers more easily approach the health-care environment or any other providers or retailers for that matter."
Apple Pay also likely won't completely address the security issues plaguing the health care industry. But its data tokenization will provide some assurance for consumers paying medical bills.
When hackers stole 80 million health care records from Anthem Blue Cross this year, it was touted as one of the largest cyber breaches in U.S. history. Fraudsters were now in the position to create an unlimited number of false identities to open credit card or bank accounts to steal or launder money.
Reports indicated none of the client records, including Social Security numbers, were encrypted or stored as tokens.
While InstaMed deploys end-to-end encryption as part of its health care payment services, Apple's biometrics and tokenization will ease the minds of patients as they make payments, Seib said.
Tokenization, which replaces card data with a unique set of characters called a token, is a concept that can "apply very nicely to health care and help solve the rapidly growing problem of data compromise" in that industry, said Julie Conroy, research director and fraud expert with Boston-based Aite Group.
"Health care data is a big target, partially because it's easy pickings and it's a rich source of personal information," Conroy said. Health care records are gleaning a 5-to-1 premium over card data in the online black market, Conroy added.
"Apple Pay addresses the payment data, but this is not the aspect of health care data that is most attractive to criminals," Conroy said. Plus, medical payment data "skews to an older demographic," which might not adopt Apple Pay as extensively as younger consumer groups.
Still, the health care industry can learn much from Apple Pay and its approach to simplicity, Seib said.
"Simple is the part that health care never seems to get right," Seib said. "The human body and health is not a simple thing, but more can be done to simplify the consumer experience."
Currently, as many as a third of patient health care payments are made during the office visit, Seib said, but consumers generally pay followup bills by phone, or writing card numbers on billing statements, sending checks via mail, or going on the provider website to pay online.
Adding Apple Pay to the mix will help streamline some of those processes.
Payments can represent "one of those front doors" to better consumer experiences in health care if they are presented as simple and easy, Seib said.