The Road to Digital Healthcare Payments Starts With a Few Cashless Steps, Says Bank of America
There are few sectors outside of healthcare that are more emblematic of both digital technology’s potential and the challenges that come with implementing it.
In an era where digital transformation is sweeping across industries, the healthcare sector finds itself grappling with the challenge of modernizing its payment systems.
“Historically, [as it relates to payment flows between patients, providers and payors,] healthcare has not been a leader in technology adoption nor deployment, and … for that reason, it’s been challenging to keep up with the evolving needs and expectations of patients,” Simon Abtalion, healthcare solutions executive at Bank of America, told PYMNTS, noting that the situation is exacerbated by the healthcare sector’s complexity and regulatory landscape.
Abtalion explained that this delay has resulted in a fragmented payment ecosystem that struggles to meet patient expectations.
Outside of healthcare, consumers are accustomed to streamlined, omnichannel experiences where they can interact digitally at every touchpoint. In healthcare, however, such solutions have yet to be fully adopted.
Transitioning to Cashless Healthcare
The persistence of cash healthcare payments is an issue within the marketplace. Healthcare providers continue to accept cash, driven by the goal of maximizing bill collection rates.
This results in many health systems lacking precise data on the actual percentage of payments collected in cash, making it difficult to assess the true value and cost of maintaining cash as a payment option, Abtalion explained.
“Without that level of data at their fingertips, it is hard to make this forward-looking leap into cashless because you may fear that you’re jeopardizing meaningful collections,” he said, emphasizing that the percentage of cash typically collected tends to be lower than healthcare executives think.
Still, as patients become more familiar with digital payment methods such as digital wallets and near-field communication (NFC), the transition to a cashless healthcare system is becoming more feasible. Younger generations, who have grown up with digital payment technologies, are pushing this shift.
Using Technology
Despite the clear trend toward digital payments, healthcare providers face several hurdles in fully embracing the change. Abtalion highlighted the importance of data in driving decisions, urging healthcare systems to assess both the costs from third-party cash couriers and the risks of cash transactions, which underscore the inefficiencies of maintaining cash-based payments.
Another factor is managing the transition for all patient demographics. Abtalion explained that healthcare systems serving older populations who have managed to transition to cashless models were aided by clear communication, expectations management and patient financial advocacy.
“When the patient’s expectations are managed, and it is not a knee-jerk reaction to something sprung upon them,” he said. “They have the time to prepare for the transition to cashless — and are able to do so.”
“Cashless doesn’t have to be an all-or-nothing situation,” he added. “You can really benefit as an organization from a cash reduction.”
This gradual approach helps ease the transition and ensures no patient cohort is left behind.
While the journey toward a cashless healthcare system is complex, involving both technological advancements and cultural shifts, and starting with cash reduction, Abtalion pointed out that the industry is closer to this goal than many might think.
He explained that Bank of America’s acquisition of the AxiaMed platform, now known as Healthcare Payment Solutions (HPS), represents a step toward consolidating and centralizing payment processes in healthcare. This dedicated healthcare gateway aims to integrate multiple payment solutions into a cohesive system, simplifying vendor management, reducing data silos and enhancing overall efficiency.
Abtalion added that the future of healthcare payments is also poised to benefit from emerging technologies like blockchain, which can enhance transparency and speed in billing processes. He said he envisions a system where blockchain technology facilitates real-time billing, reducing delays and improving price transparency for patients. Such innovations could streamline the patient experience, reducing the friction associated with healthcare payments.
The post The Road to Digital Healthcare Payments Starts With a Few Cashless Steps, Says Bank of America appeared first on PYMNTS.com.