Before transitioning to healthcare, spending nearly two decades in the financial payments sector, I feel that I have had unique insights into how traditional financial services principles can change patients’ payment experiences. This evolution is crucial as healthcare organizations try to meet the expectations of modern consumers.
Consumer behavior drives innovation
Throughout my career, one principle has been proven to be true: consumer behavior drives the industry as a whole. If consumers collectively change their payment preferences, they must adapt to the entire ecosystem. We have seen this repeatedly in the financial world, where emerging payment solutions drive established institutions to develop competitive alternatives.
Consider a peer-to-peer payment network. When these solutions emerged through the viral network effects and gained rapid adoption, traditional financial institutions recognized that they both lost transaction volume and, perhaps more importantly, crucial consumer touchpoints. The resulting innovations are not because institutions consider them interesting projects, but because consumer behavior needs to be responded to.
The same dynamic applies to healthcare. As patients bring payment preferences and expectations of retail experience into the healthcare environment, providers must develop to meet these changing needs.
Seeking seamless payment
It's always shocking when I have to update payment information when I occasionally view it online – yes, there's a payment mechanism that works behind the scenes. In most cases, good payment experience should actually be invisible.
In my experience, the ultimate goal of a healthcare provider should be to achieve truly seamless payments. Regardless of how patients choose to pay – whether it’s a card, bank transfer, digital wallet or other methods, the process should be easy. E-commerce leaders have set standards in this area. Think about how easy it is to buy almost anything from a leading online retailer and check out without friction. The payment mechanism gradually disappeared and actually became invisible. This seamless experience is something healthcare providers should be eager to create.
Navigation of medical technology constraints
One of the unique challenges of healthcare payments is that many providers’ experience is bound by their electronic health record (EHR) systems. Successful payment innovations in healthcare must run in these established systems while expanding the payment methods for patients. Adoption can be direct and enthusiastic when integrating new payment methods into the patient portal, indicating that patients want convenient payment methods to be used in healthcare as well as in daily life.
Meet the patient
Creating a truly patient-centered payment experience means offering multiple payment methods that are consistent with the way patients already like to pay. Whether it’s a traditional payment card, bank transfer, digital wallet or emerging payment solutions, these options should be offered in a frictional, familiar way.
This will become increasingly important as the younger generation becomes more prominent healthcare consumers, bringing their digital payment preferences.
Consistency creates trust
Consistency with established experience is crucial when implementing new payment methods. Red flags are added if the patient accesses payment methods through your portal and experiences that look or feel different from the past payment methods. This not only undermines the transaction, but may also raise concerns about the legality of the transaction.
This friction can lead to lasting negative perceptions, which may take time to change. Through consistent experience on payment methods, we build trust and confidence in the payment process.
Discretionary and non-discretionary dilemma
Perhaps the most fundamental difference between retail and health care payments is its nature – discretionary spending versus non-differential spending.
When purchasing consumer goods, we can plan, budget and make compromises based on our needs and financial situation. If I want a premium product but can only afford the basic model, I have a choice. I can personalize my purchases based on my budget and requirements.
Healthcare spending does not always provide this flexibility. Patients cannot easily ask the provider for partial treatment because they cannot afford complete care. If the necessary treatment options require multiple medications, it is rare to say, “I can only afford a portion of it now.” The choice is distinct: either get the necessary care and improvements, or don’t get the care and potentially suffer the consequences. One area where healthcare payments have been helping to solve this problem is providing payment plans to relieve stress associated with medical expenses.
This fundamental difference presents unique challenges to healthcare payment systems. Although retail consumers can adjust their purchases based on budgetary restrictions, health care patients generally have limited options. This reality makes payment experience in healthcare even more critical and challenging.
As we focus on the future of healthcare payments, thriving organizations will be those that attract insights from other industries while still noting the unique complexity of healthcare. By creating payment experiences, this experience is less like a burden, more like a seamless, convenient, flexible transaction that patients experience elsewhere, we can significantly improve patient satisfaction and financial performance.
The future of healthcare payments is not about reinventing the steering wheel, but about bringing the best of other places to industries that require payment innovation. By putting patients at the center of payment design, medical organizations can transform traditional friction points into opportunities to enhance the overall patient experience.
Photo: Sorbetto, Getty Images
Johnathan (John) Welch is Sphere's chief product officer, where he leads the product organization and drives the roadmap for Sphere payments and a healthcare-centric product suite. Originally from London, England, John is an internationally like-minded payment expert with over 15 years of experience working in some of the world’s largest payment providers and banks, including leadership positions at Wells Fargo, JPMorgan, World Racing and Mastercard.
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