Research shows consumers expect to pay for healthcare in multiple ways, including through their smartphone. Failure to meet consumer demands will affect healthcare's bottom line.
There is a new stakeholder class in the healthcare payments market—consumers. As I discussed in last month’s article, healthcare organizations must find new ways to meet consumer demands or face impacts to their bottom line.
The first step in meeting consumer demands is understanding consumer expectations of the healthcare payments process. On this point, the data tell us that consumers do not view healthcare payments differently from payments they make in other industries. When surveyed, traits that consumers value closely align between commercial and healthcare industries. The traits include giving great customer service, delivering on expectations, making life easier, and offering great value (2015 McKinsey Consumer Health Insights Survey).
Put simply, consumers do not view shopping online or using a ride-sharing service as different from paying their medical bill or health plan premium. If consumers can have an up-to-the-minute status on their pizza delivery, they expect the same type of visibility in healthcare.
What Are Consumers Demanding?
Consumers want an omnichannel payments experience regardless of their demographic attributes, like age (more on that in a future article). An omnichannel payment experience means that consumers have multiple channels to make payments with the freedom to decide which channel they want to use.
To understand this trend, we can look to the data on consumer preferences for paying their monthly household bills. In 2016, 19% of consumers switched payment channels for their bills from month to month (Eighth Annual Billing Household Survey, Fiserv Inc., 2016). In other words, 1 out of 5 people will pay the same bill a different way each month.
When surveyed on the payment channels they use for household bills, consumers overwhelmingly selected online payment channels, but other payment channels are still being used (Consumer Healthcare Payments Survey 2016). This data tells us that while consumers may prefer online channels, they still want to be able to use other payment options at their discretion.
Being Where Patients Are
The data for household bill payment preferences demonstrates a need for a comprehensive omnichannel approach. However, there is a clear connection between consumer preference and payment channels that promote convenience and simplicity. From 2010 to 2016, household bills paid by paper check declined 20%, while electronic options increased. Bills paid through online and automated options increased 10%, while card payments doubled to 15% (Aite).
The preference for online payment channels holds true for healthcare payments as well. More than half of consumers prefer to pay their medical bills through an online payment channel, while almost 80% prefer to pay their health plan premiums this way (Consumer Healthcare Payments Survey 2016).
Online payments go beyond simply collecting payments from a healthcare organization’s website. There are opportunities to accept payments within online portals that consumers already visit for payments or healthcare information. In fact, 73% of consumers want to pay all of their healthcare bills in one place (Consumer Healthcare Payments Survey 2016).
As consumers turn to their smartphones for more of their daily activities, healthcare payments must become an integrated part of the mobile experience as well. According to the Pew Research Center, 77% of Americans own smartphones up from just 35% in Pew Research Center’s first survey of smartphone ownership conducted in 2011.
According to research by Google, 4 in 10 smartphone owners turn to their phones for finance activities. Data from the InstaMed Network confirms this shift to mobile as payments from a mobile device have increased to 20% of all online payments in 2016, which has doubled in 3 years. In addition, 61% of consumers reported having interest in using a new mobile payment system such as Apple Pay, Samsung Pay or Android Pay to make a healthcare payment (Consumer Healthcare Payments Survey 2016).
How Consumers Prefer to Pay
There is a clear connection between consumer preference and payment channels that promote convenience and simplicity. Electronic and automated payment channels will become the norm in healthcare payments, as they already are in other industries. Healthcare organizations who offer an omnichannel approach to payments will be rewarded with consumer loyalty, brand trust and revenue to sustain the future of their organizations.
The Trends in Healthcare Payments Seventh Annual Report: 2016 is now available to download — free of charge. For the last 7 years, InstaMed has released this report to objectively educate the market and promote awareness, change and greater efficiency through quantitative data from the InstaMed Network and qualitative data from healthcare providers, payers and consumers surveyed nationwide.