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Electronic payments
Kaitlin Howard

By Kaitlin Howard

Kaitlin Howard is a researcher and writer producing insightful content across the healthcare revenue cycle. She has written and produced content for Zelis, Waystar, and Recondo Technology, as well as agencies. With a B.A. in English and Writing from University of Denver, Kaitlin stays current on market updates on claims management and healthcare payments, publishing a regular educational blog series on industry trends and Zelis offerings.


In a recent episode of the Becker’s Healthcare podcast series, Zelis Director of Business Solutions Leah Silver sat down with Brian Zimmerman to discuss and explain the benefits payers and providers can realize through electronic payments, as well as what the future may hold regarding technology advancements. 

As always, we’ll discuss the highlights below, but you can find the full podcast here

Exploring the Typical Provider/Payer Experience

Today, providers are looking for primarily one thing: innovation. 

As it relates to payments, the healthcare industry remains antiquated. Payers continue to rely on paper checks or an automated clearinghouse (ACH) for the majority of their payments. In fact, 90% of providers are currently paid using the paper check method.

And that’s a problem. A big one. 

The U.S. healthcare system racks up higher administrative costs than any other healthcare system in the world. Private health plans alone spend $158 billion on administrative costs each year, with average administrative costs per payer hovering around 17.8%.

While many payers have implemented some form of electronic payment (hello, ACH, we’re looking at you), few organizations considered long-term viability or coming advances when setting their plan in place. 

Meaning: Most organizations are simply not getting the most out of their current systems. 

The reality is that ACH typically only covers 80% of healthcare transactions. So, odds are, you’re still relying on legacy processes (i.e. paper checks) for the remainder of payments.

This, as you can imagine, is creating an influx in manual administrative labor, which doesn’t bode well when considering that most organizations’ end goal is to allow providers to focus primarily on patient care. 

The solution? Automation.

Why Electronic Payments Now

Shifting consumer behaviors and evolving digital expectations driven by the pandemic are requiring healthcare organizations to rethink their payments processes. Payers and providers must now consider the adoption of digital payments to meet increasing consumer demand. 

According to ACH Network data, the healthcare industry produced 108 million claim payments in the second quarter of 2021, a historic amount of payments for the industry. As such, providers are increasingly realizing the many advantages that come with having claims directly deposited to their accounts. 

Simply put, digital trends all point to one dynamic: faster turnaround. And with current trends, payment just can’t come fast enough.

Moreover, there seems to be a new generation in town. And the increase in digital payments is a direct reflection of that. As providers become younger and more technologically inclined, innovation, along with all of its bells and whistles, has become the new norm. 

What Does This Mean for Payers

Payers traditionally think about payments using two components (ACH and checks). In fact, 50% of plans have their own in-house ACH.

But they’ve hit a plateau. 

Using electronic payments to cater to a select tier of in-network, high volume providers, payers are seemingly overlooking a large section of smaller providers, as well as their payments. But by partnering with a solution that provides additive value, payers can actually gain an increase in provider and member satisfaction and a reduction in overall cost. 

The Wrap Up

It’s never been more clear that we must work smarter not harder. To stay afloat, organizations must automate. 

Helping control the rising cost of healthcare has always been the fundamental goal driving Zelis. If you’re interested in finding out more about how Zelis can help you fix your technology gaps and inefficiencies once and for all, check out our payments optimization solution here.

And, once again, if you’re interested in hearing the whole podcast, here’s the link.

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