Annual Report: Executive Summary – Guest post by InstaMed, a J.P. Morgan company
2021, Another Turbulent Year in a Pandemic
Two years ago, InstaMed, a J.P. Morgan company released the Trends in Healthcare Payments Annual Report just as the world was shutting down to slow the spread of the COVID-19 pandemic. At that time, few could comprehend how long the pandemic would endure.
The pandemic caused dramatic impacts on the healthcare industry. Early in 2021, the release of new vaccines brought hope and polarizing political stances in the fight against the virus. Despite the vaccines, new variants caused further waves of COVID-19 cases, which continued to overwhelm hospitals and medical practices with sick patients while stretching staff to their limits. The country’s collective “return to normal” was started, stopped, and delayed.
The trends in healthcare payments reflect much of the turmoil of the pandemic. However, data also paints a clearer picture of what is needed to move forward.
Healthcare Costs Threaten Consumer Finances
From high unemployment to government stimulus payments, consumer finances have hit many highs and lows throughout the pandemic. Recently, consumer financial health has seemed to be on an upswing, but the data suggests this may not last for long. Increases in out-of-pocket healthcare costs are one threat in particular for consumer finances. A lack of price transparency only compounds the already-fraught situation: demographics, especially race, influence how these trends may affect consumers. To help alleviate these burdens, the healthcare industry can empower consumers with personalized experiences connected by efficient and convenient payment methods.
Surviving the Worst of an Ongoing Pandemic
Providers seem to have endured the worst of the pandemic’s impacts, which have taken a financial toll on their organizations. The current labor crisis creates more problems for providers as job openings go unfilled and work is missed. Providers must also comply with the new price transparency mandates to reduce surprise medical bills. While providers try to keep up with the many trends impacting their organizations, paper continues to slow down their receipt of healthcare payments. In the past year, little progress was made in how long it takes providers to be paid or in improving the many resources needed to collect. The pandemic’s digital acceleration offers a new momentum to finally transform payments for providers.
Focusing on Improving Payment Experiences
Employers are a vital part of the payer business. This segment has weathered the perfect storm of problems during the pandemic, including the lightning-fast transition to remote work, high costs of absenteeism and now the Great Resignation. This is all while continuing to balance the increased healthcare costs for employees. Self-funded plans from payers may offer much-needed flexibility.
Also, more consumers are enrolling in health plans as individuals instead of through a group such as an employer. This creates new dynamics in the payer-member relationship, which is showing signs of strain. Payers must focus their digital strategy on increasing engagement for members where it matters – managing healthcare payments.
Trends in Healthcare Payments Annual Report
The Trends in Healthcare Payments Annual Report is published to objectively educate the market and promote awareness, change, and greater efficiency. Though 2021 proved to be another unique year, the report’s mission has not changed. The report uses quantitative data derived from the InstaMed Network and qualitative, independently-gathered survey data from consumers, providers and payers nationwide. Third-party sources are also used to analyze the market from the perspective of all stakeholders.