November 29, 2013
The healthcare payments industry in the US is mired by problems, despite the large scale healthcare reforms that have promised to transform the industry. The US Healthcare payments system facilitates payment among the 3 prime players in the industry: the payers (insurance companies), providers and the patients. The healthcare payments is largely affected by the healthcare reform and the percolation of the Consumer Directed healthcare (CDH).
Lets consider the typical scenario of a payments process in the healthcare industry:
A patient is typically covered by Blue cross or Blue shield insurance plan for his healthcare cover. A patient visits a doctor at his private clinic for treatment and is required to make a co-payment of $50 or 15% of the incurred bill. The doctor has to then claim the remaining charges not covered by co-payment from the insurance company or the payer. For this the doctor uses the insurance codes provided by the payer and files the claim.
The payer then reverts to the doctor agreeing to pay only a percentage of the filed claim. The doctor then sends the difference in payment (not paid by the payer) to the patient for payment. But this does not get paid by the patient as he is not liable to pay the amount under any mandatory circumstances.
Such scenarios have created revenue leakage in the system resulting in hundred of billions of dollars in unpaid bills. Studies have shown that payers paid the providers (doctors & hospitals) only 32% of the billed charges in 2008. Unfortunately, large parts of the healthcare payments system is paper based and so largely a messy system of payments.
This issue of bad debt can be solved largely by an automated online payments system for the healthcare industry. A recent study showed that providers (doctors) had written off $65 billion in patient bad debt in 2010.
If there is a real time information system, wherein, the doctors will enter the fees incurred for treating a patient on this automated online system and get break up details. The system will be integrated with the payers payment system and will reflect how much of the claim will be paid by the payer instantly in real time. Based on this real time information, the doctor can immediately increase the amount of co-payment from the patient. Over time the full cycle of information and payment flow could be automated from the submission of claims to the payments process and reconciliation.
This will thus avoid the large scale revenue leakage currently being experienced due to unpaid balances by the patients which are not processed by the insurance companies.
Also another option being provided to the patients is the option of paying their medical bills online. This reduces the administrative costs for the providers. It has been seen that the online payments jumped from a mere 3 percent to 9 percent of all dollar payments between 2008 and 2010.
Another issue being seen as part of the healthcare payments system is that millions of people in the US do not hold bank accounts. This makes it an issue to reach out to these unbankable customers to make transactions in regards to the healthcare payments.
What comes to the aid here is the mobile accounts held by these populace who do not hold bank accounts. Through means of carrier billing or using the mobile airtime, the patients who are the mobile account holders can pay for the services to the doctor. They do not have to possess bank accounts in order to pay for the services of the doctor, but can use their mobile accounts and the airtime on the mobile accounts to pay for the services.
Thus the provision of an automated online system to the patient and the providers and the option of payment using carrier billing or airtime are two features that can significantly improve the current issues being faced in the US Healthcare system significantly.