Healthcare Executives See Rising Risk From Outdated Payment Systems

While many sectors have embraced the swift currents of digital innovation, a significant portion of the U.S. healthcare industry remains anchored in outdated payment practices, creating inefficiencies and straining financial health.

A recent report, “Healthcare Payments Need Modernization to Drive Financial Health,” illuminates how manual payment systems are significantly hindering the efficiency and revenue generation of healthcare providers across the United States. The analysis reveals that despite other industries rapidly adopting digital tools, healthcare’s lag in this area underscores an urgent need for transformation. Digital payments are presented as a pivotal solution, poised to revolutionize the sector by not only improving crucial cash flow and reducing financial risk but also enhancing overall patient satisfaction. While major industry players are increasingly integrating modernized systems, the report points out that significant adoption gaps persist, indicating substantial opportunities for further innovation and growth.

Key data points from the report include:

• Sixty-seven percent of executives and decision-makers in healthcare payer organizations report that their firms’ manual payment platforms are reducing efficiency. This highlights a pervasive bottleneck within the industry’s administrative operations.
• Nearly three-quarters (74%) of these executives also stated that manual payment platforms leave their organizations more exposed to risks of regulatory fines and penalties. This underscores a significant compliance and financial vulnerability tied to outdated systems.
• The repercussions extend to the consumer experience, with 33% of surveyed U.S. healthcare consumers expressing frustration when modern payment solutions, such as digital wallets or mobile payments, are not offered. Notably, 24% of these consumers would consider switching providers if their preferred payment method was unavailable, emphasizing the crucial link between payment convenience and patient retention.

Beyond these core findings, the report delves into the broader implications and strategic pathways for modernization. As highlighted by Saurabh Joshi, president of CSG Forte, interviewed for the report, the benefits of digital transformation extend well beyond mere payment speed. He emphasizes that a modernized payment system also offers enhanced security and compliance, better integration with electronic health record systems and improved patient satisfaction. Non-digitized methods, such as cash or paper checks, introduce a cascade of operational complexities, including manual processing errors, delayed reconciliations, and elevated security and fraud risks, all of which ultimately escalate costs and impede cash flow for providers.

The industry’s hesitancy to adopt these innovations often stems from perceived risks, upfront costs and the daunting task of system maintenance. However, the report strongly advises healthcare providers to engage trusted payment partners who offer industry-specific solutions. Such partners can navigate the unique complexities of healthcare payments, provide counsel on optimal processes, and ensure systems remain compliant and equipped with the latest technology, even offering backward compatibility with legacy platforms.

Ultimately, the shift to modern payment technologies is presented not merely as an option but as a strategic imperative for sustainable success, enabling providers to future-proof their operations, reduce inefficiencies, and strengthen invaluable patient relationships. Alexander Paull, vice president of Global Merchant Services at American Express, reinforces this perspective, noting that modern payment solutions are pivotal in helping providers improve operational efficiency, reduce risk and align with evolving patient preferences.

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