There is a growing opportunity for health care providers to benefit from adding a self-service option, particularly as the portion of revenue they get directly from patients increases.
A decade ago, the patient portion of hospital's revenue was small. Instead hospital's collected most of its revenue from insurance companies and the government. Now, as more patients move to high-deductible health plans, almost one-third of revenue comes from patients, said Tomer Shoval, co-founder and CEO of Simplee, a health care management and payments platform provider.
"And the collection rate is really bad," he said.
But health care providers are starting to think and build business models like Amazon.com and Apple, two companies whose customers are very engaged and loyal, said Shoval. And Simplee helps them do this.
Hospitals either write unpaid bills off as bad debt or use expensive and highly unsuccessful means to get patients to pay, Shoval said. The SimpleePAY platform was designed to allow health care providers to engage with patients, connecting with them before, during and after their visit. On the consumer side, the platform makes the billing process more understandable by itemizing costs. It supports online payments from credit, debit, FSA or HSA cards, electronic checks and bank transfers.
Based on a survey question patients get at the end of a transaction on SimpleePAY, more than 80% of customers have answered that they would recommend the provider, Shoval said.
While self-service bill payment platforms have proliferated for utilities and other consumer services, in the health care industry "it's not growing nearly as fast as other consumer markets," said Michael Trilli, senior analyst at Boston-based Aite Group, who specializes in health insurance and payments.
The medical industry, which suffers from low margins, is one of the most in need of a digital platform to consolidate the channels, he said.
The key to shifting consumer habits is offering them additional value on top of the payment, Trilli said, pointing to mobile payment providers that have been adding features to entice consumers. Platforms such as Simplee "fix the bill problem itself," Trilli said.
The problem is that the explanation of benefits and cost patients get from their insurance company varies from the bill they get from the hospital. "What that's done over time has created a very cynical and confused consumer," Trilli said. And when a provider makes the billing process clearer, patients are more motivated to pay their bills, he said.
And Simplee's growth attests to this as well. Transactions on the SimpleePAY platform exceeded $1 million per day this month. "Just 12 months before that we were processing $1 million on a monthly basis," Shoval said.
When Shoval asks health care providers how many of their patients pay bills online, it's always in the single-digits. "You shouldn't be OK with that," he said. Within 12 months of launching the SimpleePAY platform, healthcare providers can get nearly 50% of patients paying their bills through online self-service, he said.
And Simplee's mobile payment adoption rivals that of Starbucks, which handles 16% of its U.S. in store sales as mobile payments. More than 15% of payments on Simplee are through a mobile device.
In 2014, the Consumer Financial Protection Bureau (CFPB) reported that nearly 43 million Americans had unpaid medical debts, and one of the main reason was because they just don't understand their bills.
Simplee works only in the United States as of right now. "The U.S. is the classic starting point because it's gigantic and it is very confusing in the way it operates," said Shoval.