Changing Healthcare's Payment System

Healthcare billing and payment models must change to reflect the mobile, one-click reality of patients’ lives, according to PwC’s Health Research Institute (HRI). However, healthcare has been slow to evolve. In a consumer survey, HRI found patients were dissatisfied with healthcare billing and payment.

Digital health and “do-it-yourself” healthcare using mobile and digital technologies are becoming an important part of the strategies that incorporate the 6 components of a consumer-oriented payment system: convenience, transparency, affordability, reliability, seamlessness, and quality.

“Businesses that make this shift—offering convenient, seamless, quality, reliable and transparent billing and payment—will be rewarded in the New Health Economy,” Kelly Barnes, PwC's US health industries leader, said in a statement. “They will retain more customers and attract new ones.”

According to PwC’s Money Matters: Billing and Paying for a New Health Economy report, Americans will spend $345 billion out of pocket on copays, coinsurance, deductibles, and other cost-sharing provisions in 2015. In addition, they will spend an estimated $271 billion on health and wellness products and services.

HRI identified 4 strategies that hit all 6 consumer-oriented principles:

Accelerate the migration to digital

Consumers want more mobile and digital options, HRI found. They want access to pre-service shopping, online portals, and mobile apps to manage and pay bills. They also want flexible payment plans.

In order to provide this, businesses need to understand that the front-end, the consumer experience, of the payment process is just as important as the back-end operations. According to HRI, billing and payment can improve or damage a consumer’s opinion of a healthcare provider, pharmacy, or insurer.

Transparency is also key as consumers want to know how much a service or treatment is going to cost before they are charged.

Sidestep claims

Consumers find the claims process confusing, and businesses find it expensive. High deductible plans mean more consumers will be paying out of pocket. Providers and insurers should consider partnering with nontraditional companies offering services that sidestep claims, according to HRI.

Embrace simplicity

Simplicity can mean a number of things, and it does not have to mean narrowing choices. It could be offering online tools so patients can get estimates for services and treatments or pay medical bills.

Simplicity can mean making prices simpler and easier to understand. For instance, Wal-Mart has adopted $40 for a visit to an in-store clinic and $4 for generic prescription drugs.

Multiply payment options

Patients are becoming important payers for hospitals, physician offices, and other healthcare providers due to higher deductibles and other cost-sharing measures. Offering payment choices, making payment easy, and providing assistance to customers to help them plan for costs can reduce bad debt.

It’s important to engage early, though, before the patient receives the product or service. And providers have to be more open about talking to patients about costs and treatment choices, according to HRI.

“Healthcare companies must consider shifting from a business-to-business to business-to-consumer billing and payment approach,” said Paul D’Alessandro, PwC principal and customer leader, health industries. “Technology will play a significant role in creating ways to consolidate billing and payments, and mobile apps, online portals and other innovations should become more commonplace in the immediate future. For longer term solutions, the system should be redesigned to remove complexity and support a seamless customer experience.”