Healthcare PF InstaMed Counters Consumer Confusion

Nearly two-thirds of consumers would consider switching to a different healthcare provider based on their payments experience.

That’s potentially a sobering statistic to people in the healthcare industry. But it’s one that InstaMed – as a healthcare payments network and particularly as a payment facilitator – feels well positioned to address.

The company recently released its Trends in Healthcare Payments Eighth Annual Report: 2017, the latest edition of its annual report combining payments data with a survey of practitioners, consumers and payers.

In one of the key findings, the survey indicated that most consumers (70%) report being confused by their medical bills. A faulty customer experience in turn impacts healthcare providers’ bottom lines. The report found that, for 73% of providers, it takes more than a month to collect payment from patients.

According to Chris Seib, cofounder of InstaMed, the confusion inherent in healthcare payments stands in stark contrast to the payments experience that consumers are becoming used to receiving in other areas of their lives.

“It’s just really complicated and confusing, and you can contrast that to a lot of the strides that ecommerce has made in other industries over the last 10 years. The themes there are simplicity for users, and an elegant user experience,” Seib told PaymentFacilitator.

“We really feel it’s incumbent upon the industry, and something we’re very focused on, to bring that consumer simplicity to healthcare,” he continued.

The healthcare industry has long required an omnichannel payments system, well before the term “omnichannel” was taking root in retail, Seib said.

For example, a patient receiving care might owe a co-pay at the point of service, and then later receive a bill from a lab for bloodwork and from a contractor for a procedure, either of which they might pay online or with a check.

Because of the variety of ways to pay, organizations often have multiple vendors involved in their payments process, Seib said. They might have different vendors and multiple gateways, depending on whether the payments are made at the point of service, online through a system connected to provider’s IT system, through a quick-pay portal, or into a call center or a lockbox.

“That’s complexity and friction,” he said. “It also contributes to consumer frustration, because you see a billing mistake and you wonder why it wasn’t posted right. Well, which one of the 12 vendors dropped the ball in this case?”

In response, InstaMed is trying to address the fragmented nature of this system through a network that connects healthcare providers as well as health plans – the third component in this already complex web.

InstaMed operates as an ISO and provides payments processing to other companies, Seib said. But its status as a payment facilitator plays a fundamental role in building its network.

Already serving as a merchant acquirer and payment processor for the healthcare industry, InstaMed chose to adopt the PF model not long after it became available. According to Seib, the company recognized that a cumbersome merchant enrollment process was limiting its ability to grow.

“If we had to go independently enroll the hundreds of thousands of healthcare organizations out there as merchants, and there were no other options to get them on board for straight-through processing, we would not be in a position to deliver to the consumer,” he said.

“It’s important for a healthcare payments network serving consumers, health plans and healthcare providers of all types – from the large health systems down to small practices – to be broad and inclusive. Being a payment facilitator is a very important part of that model in that it allows us to bring on healthcare merchants onto our platform in a very low-friction and rapid way.”

To focus on the unique needs of the healthcare payments market and to enable the exchange of data easily between parties, InstaMed has built its own platform from the ground up.

Being a payment facilitator also contributed to the company’s strategy for that platform, Seib said, because it allows the company to focus on integrating its solutions into the healthcare system.

Those solutions include capabilities that have been built out in response to the consumer needs InstaMed has gleaned from its trends report.

For example, the company has developed an app that enables consumers to check in for office visits on their phones, an option that 80% of consumers in this year’s survey said they would like. They can also use it to pay co-pays and perform other tasks related to their service.

InstaMed has also launched services that enable consumers to pay all of their bills at once in an integrated process through their health plan web site or a new consumer-facing app. According to this year’s trends report, 71% of consumers would like to pay all their healthcare bills in one place.

“Our platform allows us the flexibility to bring new and innovative solutions to the market because we own the pieces. We’re not partnering with someone else to create the capability, and that’s a unique advantage for us,” Seib said.