A Prescription for Profitability: Real-Time Payments Come to Healthcare
When it comes to important numbers in the healthcare sector, you’re probably familiar with 120/80 (that’s ideal blood pressure for the non-medically inclined), but I’d like to introduce you to two more numbers: 15 and 47.
15 is the percentage of healthcare spending due to billing and payment inefficiencies, while 47 is the percentage of patients who would leave a hospital for a better payment experience1.
Clearly, payments can have a large impact on the overall profitability of a hospital or physician network. Enter real-time payments, the first new payment network in 40 years. Just as credit cards helped usher in a period of convenience and simplicity in payments, real-time payments promise to change the world of payments in new and profitable ways. And with patients today growing more accustomed to immediate satisfaction, real-time payments satisfy the demand for instant confirmation and gratification, leading to greater patient satisfaction, loyalty, and reduced costs.
What are real-time payments?
Put simply, real-time payments are a new payment method that instantly takes money out of one bank account and deposits the money into another bank account, 24x7x365. This same transaction carries the payment and remittance data. These payments run on new rails and move money faster than same-day ACH and credit cards, and prevent ACH returns or chargebacks because they’re irrevocable.
For healthcare providers, this means improved collections, reduced time spent by staff matching payments to procedure, and most importantly happier patients.
Real-time real-life scenarios
Payer to Provider – Imagine receiving reimbursements from health insurers in an instant. What would that do for your bottom line? Real-time payments drastically cut payment times from payers to providers, and combine data and dollars in a single transaction to explain what the payment is for. Not only are you cutting collection time, but you’re also cutting reconciliation time as well.
Patients to Providers – Patients depend on healthcare to not only keep themselves healthy, but also their bank accounts. Real-time payments prevent bounced checks and give patients an accurate picture of how much money remains in their account. Providers benefit with increased collections at a lower cost. With patients wanting to pay in real-time, providers don’t want to turn down a payment – especially a payment that costs less than a credit card.
Providers to Patients – Driving greater patient satisfaction also revolves around more than just a quick and easy payment experience. Patients receiving refunds or reimbursements in real-time will ultimately be happier and more loyal too.
Real-time healthcare payments forecast
According to Lipis Advisors, real-time payments in healthcare will grow at more than 100% CAGR from 2018-2022.
In addition, it’s estimated that 25% of all online bill payments to providers and payers will be completed through real-time payment by 2022, led by ACH, debit card and check payments shifting to real-time networks. Of all real-time bill payments made in 2022, 33% will have previously been made by ACH and 27% by debit card, according to Lipis Advisors.
The switch to the real-time payment method is now a matter of when, not if, thus making it imperative that providers select vendors now who can support real-time payments. Getting it wrong could result in having to redo your payment systems within two years.
As new ways to pay offer a prescription for increased profits, read how new payment options enable you to collect 27% more revenue on our healthcare providers industry page.
1McKinsey; Patient loyalty: It’s up for grabs, Accenture Strategy, 2016
Related Blog Posts
What Will the World of Post-Pandemic Payments Look Like? [Dave Birch Q&A]
Dave Birch is a leading global authority on payments and digital identity, who is no stranger to predicting what the future of financial services has in store. After delivering the keynote presentation at our recent ACI Edge Virtual: Banks & Intermediaries, we gathered some insights from Dave on what the world of payments could look like, post pandemic.
The Rise of “Invisible Payments” in Latin America
For retailers throughout LATAM (and the world), driving sales and loyalty depends on keeping up with top payment trends, which are invariably driven by consumer demands. “Invisible payments” is an emerging trend that is already paying benefits for a host of retailers — and it could be a game-changer for Latin America.
Digital Payments in India: Delving into Diwali Festive Season Spending [Q&A]
While many retailers around the world have just entered their busiest period of the year – kicking off in earnest with U.S. Thanksgiving and the increasingly global phenomena of Black Friday and Cyber Monday – there are some markets where these busiest of periods have already occurred. An extended China Singles Day raked in roughly $100 billion at the start of November, while India’s festive season, culminating with Diwali in mid-November, was widely expected to witness strong growth of online sales in particular.
Do Merchants Have the Right Tools to Tune Their Engines for the Innovation Race?
2020 has been a year of many, many changes, across nearly all walks of life and business. One beacon of light is that these circumstances have pressed the digital acceleration button, in some cases advancing digital uptake and innovation by years, within a matter of a few months.
Confronting Disruptive Pressures in Issuing [Customer Q&A]
We are at the dawn of an industry overhaul. The banking industry is facing disruptive pressures on multiple fronts, but particularly in payments. More competition, increasing regulation, and growing consumer expectations, payment types and channels. Plus, for issuers, there is the additional challenge of remaining relevant and at the center of the customer relationship, which has never been more complex.
Strong Customer Authentication: New Rules Will Trigger Profound Changes in Many Organizations [Q&A]
One of the biggest industry issues for the payments community right now is strong customer authentication (SCA) – the new regulation for card payments, including card-not-present or eCommerce payments. This is due to come into force on December 31, 2020 in the EU, and on September 14, 2021 in the U.K. ACI recently brought together industry stakeholders for a webinar entitled Competition Versus Compliance: How an SCA Exemptions Strategy Can Grow Your Business. I spoke with these stakeholders about the challenges, but also opportunities, that SCA will bring to the payments industry.
The Two Sides of Payments Modernization in Asia: Real-Time and Financial Inclusion
Home to nearly 60 percent of the world’s population, as well as some of the most dynamic and diverse markets, the Asia-Pacific (APAC) region plays a critical role in shaping the world economy. The diversity of the region is also evident in its payments landscape, with almost every country forging its own path towards payments modernization.
The Fight for Fuel Customer Loyalty Is On
In 2019, price determined where 59 percent of consumers chose to purchase their fuel, and more than half opted to pay at the pump, preferring to simply pay for gas and go.
Payments Modernization in the Cloud: An Inflection Point in the History of Payments
Public cloud is one of the big buzzwords in payments right now. While a few years ago financial institutions were reluctant to embrace the technology, they are now among the most likely to do so. ACI discussed the topic of Payments Modernization in the Cloud during a recent webinar, moderated by Finextra’s Head of Research Gary Wright. Katrin Boettger caught up with the panellists — Ciaran Chu, head of cloud at ACI; Peter Hazou, business strategy leader at Microsoft and Lu Zurawski, practice lead, retail banking at ACI — about why the COVID-19 pandemic might be a further catalyst for the worldwide adoption of cloud technology.
From "Access to Cash" to "Access to Digital" – How Innovative Thinking Is Keeping SMEs Trading
With millions of people in London and the wider U.K. having endured lockdowns and restrictions, the COVID-19 pandemic has had a massive impact on our shopping habits. While some supermarkets have struggled to keep up with customer demand and social distancing rules, many small, local business have adapted to the crisis quickly, efficiently and in innovative ways. While supermarkets have run out of delivery slots, smaller businesses are now offering local deliveries whilst providing safe digital payments options. They are also selling goods that the big supermarkets have run out of because traditional supply chains have been interrupted.