It’s hard to think of any business that has more unhappy customers and unpaid bills than healthcare. It’s a problem that literally impacts some people’s health, as many avoid going to the doctor as a result. The problem also crushes the retention and profitability of the providers who would treat them.
The good news is that the accelerated digitization trend brought about by the COVID-19 crisis has made the costs of this problem harder to ignore — and more likely to be fixed, Florian Otto, co-founder and CEO of Cedar, said in a recent chat with Karen Webster.
“In no other industry would people really accept to wait for an hour and a half for the appointment and [still] pay,” he said. “In no other sector would they accept to get a bill that they don't understand and don't get a cost estimate.”
True, the quality of the medical care that someone receives will always be paramount. But Otto said customers’ satisfaction with the digital interactions that they experience is becoming a larger part of the equation. In fact, he said studies show that 41 percent of people say they’d choose a different provider if the digital experience was better.
From a business standpoint, Cedar — which describes itself as the healthcare financial engagement platform that keeps patients happy and businesses healthy — believes the process needs changes that appear long before the patient even gets to the office.
Otto said that, especially in the pandemic era, the system needs seamless registration, touchless check-in (without sharing clipboards or iPads), no sitting around a crowded waiting room and a transparent, contactless billing experience. He added that little changes like taking a picture of your insurance card yourself rather than handing it over to be photocopied could help take away some of the COVID-19 fears that patients have.
“The pandemic has accelerated a lot of processes, [but] very few doctors or health systems really have a good approach right now,” Otto said.
Customers Expect An Amazon-Like Experience
Another thing driving the digital shift in medicine is that consumers experience many incredibly efficient and enjoyable transactions these days in other sectors, which they expect to replicate throughout their lives.
“Your best experience anywhere becomes your expectation everywhere,” Otto said, noting that people who get treated well shopping on Amazon or interacting with Netflix want the same treatment going to the doctor.
“I think the gap is getting larger between what consumers experience somewhere else to what they're being offered in healthcare,” he said. “So, they are now demanding more from the healthcare providers.”
Otto said medical practices that use Cedar’s payments platform report a 96 percent customer satisfaction rate versus an industry average that scores lower than your state’s Department of Motor Vehicles.
And he said such satisfaction is critical for caregivers — not only for referrals and retention of current patients but also for getting patients to pay bills. Otto said payment rates average 30 percent to 40 percent in most health systems and take more than three billing cycles (60 days) to collect.
“If you have a good process, you have happier patients,” he said. “Retention gains, you collect more, you collect faster and it's cheaper — which is very important right now for healthcare systems because they are under financial pressure. Those are a lot of cash-flow issues for the providers.”
The Times They Are A-Changin'
Such incentives are another big reason why more and more practices, medical groups and hospitals are making the move to digitally upgrade their operations.
Add in pressure from patients who complain to CEOs who, in turn, lean on chief financial officers to find a solution and Otto predicts that everything will be different very soon. After all, upgrading payments to digital is one of the few technologies that offer a clear return on investment.
“In five years, I'm pretty sure that most of the [payment] interaction will be digital at least on the larger healthcare systems,” he said.