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Money matters: Billing and payment for a New Health Economy

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The nation's healthcare billing and payment system is an artifact of an earlier age. Much can be done to improve the system in the short term, but in the long term, structural change is needed. In this report, HRI diagnoses the billing and payment system, and prescribes short- and long-term solutions.

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What this means for your business

In the short term, healthcare organizations should begin building more convenience, transparency, affordability, reliability and seamlessness into their revenue cycle and payment systems. In the longer term, healthcare payment must fall in line with other industries. The system needs more than patches, bolt-ons and retrofits. Here's how to make these structural changes happen:

  • Accelerate the move to digital. Commercial health insurers conducted just 15% of payments and 27% of payment remittance advice electronically in 2013. The rest of US business averages 43% for payment. This remains one of the system’s most critical bottlenecks.
  • Embrace simplicity. Many consumers do not understand their insurance benefits and are confused by their medical bills. Online payment sites, mobile apps and aggregated billing are all steps toward a simplified consumer experience.
  • Sidestep claims. The growth of high-deductible plans means more consumers will pay for care out-of-pocket. New entrants are reconsidering whether these cash payments require claims, and consumers are interested, but credit towards deductibles is more important than ever.
  • Multiply payment options. The system’s complexity and opacity lead to consumer delays in paying medical bills, or even abandonment of them. Offering choices for payment, making payment easy and helping consumers plan for costs can reduce bad debt and days in accounts receivable.

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Paul D'Alessandro

Principal, Health Industries, PwC US

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