By Yusuf Qasim, President of Payments at Zelis
Healthcare has notoriously lagged behind the travel, banking, and retail industries when it comes to technology and modern digital experiences, relying on archaic, paper-based systems requiring labor-intensive processes for both payers and providers. However, the COVID-19 pandemic forced healthcare organizations to rethink their internal processes and find ways to maximize operational efficiency, resulting in a monumental wave of digital transformation and adoption.
The trend toward virtualization makes healthcare payments, and the way they are requested and distributed between payers and providers, an area primed (and long overdue) for digital transformation. Establishing a 100% electronic system for claims payment is the only way forward to cut costs and improve efficiency, including streamlined processes and protection of staff, for a highly functioning healthcare system post-pandemic.
Cutting costs with electronic payments
Hospitals operate on razor-thin margins with small, rural hospitals struggling to remain open, and this issue has only been intensified by the financial strains brought on by the pandemic. The 2021 revenue outlook is bleak – with industry experts expecting revenue declines of between $53B and $122B as changes in care delivery have wildly destabilized revenue. With negative margins threatening the industry, provider organizations need to streamline operations and speed up reimbursement to maintain a steady, timely, cash flow in this evolving environment.
One way to cut costs brought on by inefficient reimbursement processes is by implementing 100% electronic payments and eliminating paper checks, which cost more to physically process. Despite the movement towards virtualization, with many non-emergency clinical visits increasingly conducted via telehealth or asynchronous chat or email communication, hundreds of billions of dollars in physical check payments still exists across providers today. The cost of processing a paper check is $6 and can be as much as $20; with millions of claims being handled, that cost adds up.
Organizations could save significant amounts by transforming electronically, enabling providers to get paid faster, sometimes in real-time, thereby ensuring a healthy cash flow that isn’t tied up in transit.
Adding payment efficiency by going digital
As the healthcare industry continues to confront pandemic-driven financial deficits, receiving timely payment is more important than ever. Moving to an electronic claims payment process helps streamline operations and unlock the next level in efficiency for both payers and providers. Providers know all too well paper-based systems come with an administrative burden that significantly lengthens the claims process and makes it more complex and redundant. Manually handling paper checks is more abrasive for staff, wherever they fall in the payment continuum. Waiting weeks for the payment to arrive, then opening, scanning, fact-checking, and sometimes having to mail checks back to other locations or banks requires an inordinate amount of time and resources.
By going paperless, organizations can eliminate these inefficiencies by quickly processing payments online, allowing employees to get more time back, which can then be spent on higher-value tasks and optimizing workflows. Electronic payments are pivotal in enabling payers and providers to optimize financial performance and gain efficiencies that have been unattainable in paper-based systems.
Improving Employee Safety
Technology can improve payment processes considerably, but organizations also need employees to execute these processes. COVID-19 has brought health concerns to the forefront and now virtual options have become the new normal – with many people still working remotely to mitigate risks and prevent unnecessary exposure to the virus. Shifting to an electronic claims process adds efficiency while preventing payer and provider staff from handling checks that may have been touched many times. To protect staff, limiting manual processes in favor of virtual options, when possible, is another way to improve safety for staff in a pandemic-prone world.
Undoubtedly, going forward, payers and providers will need to embrace the move toward virtualization to remain competitive in an industry, and world, that is becoming digitally native. By transitioning from paper-based payments to e-payments, these organizations will cut costs, increase efficiency, and enhance the safety of their employees.
Yusuf Qasim is President of Payments at Zelis, the leading payments company in healthcare.