InstaMed is a large private vendor of payment and billing services for providers and plans. It released a report regarding the trends it is seeing in those payments. (InstaMed Report) A compelling factor in the payment market is the ongoing growth of high-deductible health plan designs. These plans mean that for most services, patients have at least some cost-sharing. Providers now have many more bills that they need to split between a payer and the patient, resulting in more administrative work and for many, more bad debt. Patients have another source of anxiety at the doctor’s office beyond their health–how to pay those bills. The industry, including InstaMed, are working on making the administrative side more automated and less expensive, but how patients will cope financially is less clear. The increased cost-sharing is reflected in InstaMed’s internal data, which show a 72% increase in the total number of patient payments from 2011 and 2013 and an increase in the average amount paid from $111 to $133 in that time period. Total insured patient out-of-pocket expenses are estimated to rise from $250 billion in 2009 to $420 billion in 2015. Patients are paying more with payment cards, going from 34% of total patient payments in 2011 to 42% in 2013; and more providers and setting up payment plans to facilitate patients’ ability to pay over time.
Two-thirds of providers said they saw in increase in patient cost responsibility in 2013, but 42% said they don’t know how much the patient owes at the time of visit and 76% said they often take more than a month to collect what the patient owes, with 78% saying it takes more than one bill to collect. The cash flow implications are obvious. On the positive side for providers, 59% said they collected at least part of what the patient owes during the visit for a majority of visits. For those who don’t collect at point of service, the most common reasons are not knowing what is owed and patient resistance to paying. On the payer side, the move to electronic payment systems continues, both in terms of providers sending bills and payers making electronic payments. But 50% of payers acknowledged that they do not currently meet the standards for electronic payments and even among those that do, 60% said less than half the providers they pay can accept electronic payments. The most common reason, bizarrely, was the provider’s preference to get paper checks. Most payers have a patient web portal that can be used for tracking payment and other issues. A patient survey found that 72% were unaware of their level of cost-sharing at the time of a visit and only 2% got bills from a provider via email. Amazingly, 79% of respondents use some kind of electronic payment for non-health care bills and would do so for health care, but do not have an option to do so now. The report gives a clear sense of the opportunity which still exists to create substantial cost savings by automating the health care billing and payment cycle.