Why the Future of Healthcare Payments Starts With Getting Rid of the Bill

The healthcare sector is riddled with change-the-game opportunities, frequently hidden behind entrenched fragmentations and inefficiencies.

And at the center of this ecosystem, caught between traditional processes and the promise of technologically driven transformations, sits better healthcare payments.

To understand how the evolution of healthcare billing and payments can remove frictions from the complexities faced by consumers and providers, as well as help streamline care delivery, PYMNTS’ CEO Karen Webster sat down with Tom Furr, CEO of PatientPay, and Ryan Zemmin, CEO of ClearGage, to discuss not just the Tuesday (Aug. 27) merger of their two companies, but also how digital innovations are enhancing the patient experience in healthcare billing and payments.

“We are trying to digitize a pretty paper-based system, which is how most healthcare bills are sent out,” Furr said. “Forty-five percent of bills in healthcare are sent through paper statements, and outside of healthcare that’s not the norm.”

He attributed the persistence of paper billing to the inherent complexity of healthcare payments and the challenge of transitioning long-established practices. And while the pandemic accelerated the shift towards digital solutions as healthcare providers faced pressure to maintain efficiency, the macro backdrop has left healthcare systems struggling amid rising costs and reduced government support.

Read more: PatientPay and Higher Standards Partner on Healthcare-Focused Payment Acceptance Solution

Transparency and Consistency

In the healthcare industry, revenue cycle management is a critical concern, with collection rates playing a role in maintaining financial stability. Traditionally, paper statements have been the primary method for billing patients, but this approach is seen as outdated and inefficient. As healthcare businesses strive to optimize their collection processes, many are turning to digital payment solutions to improve both the speed and success of patient payments.

The recent merger between PatientPay and ClearGage, as the two executives explained, represents a strategic alignment aimed at addressing the evolving needs of the healthcare payment landscape. The merger was initiated after both companies recognized their complementary strengths and the potential for greater impact through collaboration.

“We were looking for a PayFac [payments facilitator] solution, and ClearGage had a registered PayFac,” Furr said. “They also had a solid eligibility and estimation solution that perfectly complemented our back-end billing and payments capabilities.”

By combining resources, the two companies aim to create a unified platform that enhances the patient experience while providing healthcare providers with the tools they need to improve efficiency and reduce costs. The merger is expected to bring together a broad range of capabilities, including treatment estimation, eligibility verification, and streamlined billing processes, under a single roof.

After all, one of the most significant barriers to timely payments in healthcare is the complexity of the billing process. Patients often struggle to understand their bills, especially when multiple charges from different providers are involved. Even those well-versed in the industry can find healthcare bills confusing.

“The reality is, if you can give somebody the insight ahead of time to what the cost of a procedure might be, and then provide them a range of options to pay for that service, it gives them much more confidence in their ability to not only to get the service, but to be able to afford it,” Zemmin said.

As healthcare payments continue to evolve, both Zemmin and Furr emphasized the importance of transparency and consistency in the patient experience, an approach that not only benefits patients but also helps healthcare providers increase appointment adherence and reduce the administrative burden of chasing payments.

The Path Forward

Despite the progress being made in the healthcare billing and payments space, inconsistency across healthcare providers remains a challenge.

Furr highlighted the siloed nature of healthcare, where patients often encounter different payment systems and experiences with each provider they visit. To address this, PatientPay has developed a patient-centered approach, similar to PayPal, that allows patients to manage all their healthcare payments in one place, regardless of the provider.

“Healthcare has traditionally been built around medical groups, with little consideration for the patient experience,” Furr explained. “We’ve taken a different approach, focusing on the patient as the center of the healthcare payment ecosystem.”

Tactics, like integrating explanation of benefits (EOB) data with billing information, can make it easier for patients to see exactly what they owe and why. This transparency, combined with the convenience of digital payment options, has led to a 44% payment rate among users who log into the PatientPay platform, Furr said, with 70% of those payments made via mobile devices.

Ultimately, reducing paper statements and offering digital payment options not only streamlines the billing process but can also improve cash flow for medical providers.

And the future of healthcare payments lies in further simplifying and standardizing the billing process across providers. Zemmin and Furr both envision a system where patients are provided with clear, upfront estimates, and the billing process is seamless and consistent across all healthcare interactions. By leveraging technology and focusing on the patient experience, they believe the industry can move away from the traditional, fragmented approach to a more unified and efficient system.

“Taking the complexity of healthcare billing and simplifying it so patients can understand it, then giving them the ability to pay it easily, that’s the key,” Furr said.