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
Southeast Asia’s Domestic Payments Infrastructure Has Laid the Foundation for a Cross-Border Real-Time Network
Over the past decade, economies across Asia have been on the path to payments modernization, upgrading and replacing domestic payments infrastructure to make payments cheaper, faster and better. While the focus has been on domestic gains, this has set the foundation for a broader, cross-border real-time network – especially in Southeast Asia.
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.
Could the Right Use Case Push the U.S. Over the Edge of Real-Time Payments Adoption?
New York City, while a world leader in countless ways, has only just made it possible to access the subway with contactless technology. Something a commuter in London, for example, has taken for granted for many years. While America’s tech companies, manufacturers and retailers have been constantly modernizing, the country’s payment methods and habits lag behind much of the rest of the world.
Why the COVID-19 Pandemic Makes Immediate Payments Growth Mission Critical
COVID-19 continues to shake the world, and the payments industry is playing a critical role in the response to, and recovery from, this pandemic. There has been a shift in preferred payment methods as many consumers seek to avoid cash and embrace modern, digital payments.
Payments Modernization and Cross-Border Payment Corridors: How Nordics’ P27 Is Leading the Pack
The understandably large level of attention generated by the Nordic region’s P27 initiative is the antithesis of its relatively small place on the global map. Much of that is down to the impressive scope of its ambition: to build the world’s most cutting-edge, cross-border payments system, encompassing multiple currencies and payment types (including real-time), plus building out the services to sit on top of the rails, which will drive further value.
Taking the Pulse of Biometric Authentication in 2020
Growing demand for digital payment methods in recent years, including a plethora of mobile payments and person-to-person payment applications, has already put biometric authentication firmly at the forefront of payments and fintech. Moreover, the COVID-19 global health crisis has introduced new norms that have discouraged non-essential physical interaction, which has further boosted the popularity of digital payment alternatives. Already in March, CNBC noted that there had been a surge in the number of Americans preferring ‘”tap and go” transactions through digital wallets, like Apple Pay or Google Pay, overwhelmingly secured with biometric (mainly fingerprint) authentication.
How Does Brazil Measure Up Against the 5 Key Indicators of Real-time Payments Success?
Real-time payments, or immediate payments, have experienced explosive adoption in many markets around the world. While some have developed their own approach to deploying real-time payments, the COVID-19 pandemic has served as an accelerant in the implementation of real-time payments and digital modernization. With real-time payments volumes now increasing in some markets due to the pandemic, it’s important to look at how Brazil measures up against these 5 key indicators of successful implementations and to understand how the country can drive adoption of its new real-time system, PIX.
Why the Value of Real-Time Payments is Not in the Fees Charged
I recently hosted a webinar with payments experts to delve into ACI’s Prime Time for Real-Time research and uncover what the rise in global transactions means for the U.S. market. I was joined by Steve Ledford, product executive for the RTP Network of The Clearing House, Reed Luhtanen, executive director of the U.S. Faster Payments Council, and Peter Hazou, director of solutions for Financial Services at Microsoft. We investigated the unique factors that have so far hindered ubiquitous adoption of real-time payments in the U.S., as well as those that highlight the market’s position to capitalize on the global rise of real-time, and deliver value to financial institutions, merchants, corporates and consumers.
Envisioning a Cross-Border, Real-Time Payments Ecosystem in Southeast Asia
Southeast Asia is emerging as the center of real-time, cross-border payments growth, with ISO 20022 and QR codes as critical components, according to new research published by ACI and Kapronasia, a leading financial technology market research and consulting firm. Envisioning a pan-regional, real-time payments ecosystem in Southeast Asia sees real-time payments as a key enabler for the Southeast Asian economy, especially as the region pursues economic recovery and further digital transformation on the back of COVID-19.
Three Must-Haves for Immediate Payments Success in Brazil
Recently, the Central Bank of Brazil (BCB) announced its plan to launch the country’s first instant payments scheme, PIX, which is expected to be operational by November 2020. PIX will be mandatory for all larger banks in Brazil and will work as a central infrastructure with non-stop availability. The scheme will also be based on the ISO 20022 messaging standard, which features data-rich messaging and facilitates greater availability, speed, convenience and security. Ultimately, this open environment will be a major catalyst for innovation.