Did you know? In a time when financial service margins are low and profitable customers are getting harder to come by (and keep), the U.S. healthcare system is a trillion-dollar market, generating more than 8 billion claims per year (and growing). This market reality makes attracting hospitals, clinics, and private practitioners as banking customers crucial to the growth plan of any financial institution (FI).
The opportunity is ripe not only for deposits and loans, but for treasury management services, such as lockbox processing, document imaging, or remote deposit capture. Tapping into niche markets and building new relationships is more important than ever to ensure recurring fee income, improved profitability and a strong competitive position.
Unique Aspects of the Healthcare Industry: Alternative Financing and Your Opportunity
With an estimated 25 to 40 cents of every dollar spent on healthcare eaten up by administrative costs1, rising patient healthcare costs are a huge issue. Meanwhile, healthcare providers face significant cash flow and timing issues. This represents a high-reward opportunity area for FIs willing to offer alternatives to traditional lending.
Hospitals, clinics, and healthcare practices spend significant time processing payments from patients and insurance companies. The associated inefficiencies translate not only to direct costs, but also to lost revenue due to the time constraints required for medical claim reconciliation. Physicians today must see more patients and have less overhead to sustain profitable income. Many lack the resources to collect payments, and the level of write-offs continues to increase. Meanwhile, Healthcare Revenue Cycle Management (HRCM) is still relatively new and not well known throughout the medical community. But with it, your FI can generate significant non-interest income with very little investment while also strengthening existing medical relationships. You can also create additional income opportunities through lending, investment, insurance, merchant processing, and non-traditional banking services.
Ready to tap into one of today’s underserved yet most promising markets? We invite you to take a look around this Knowledge Center, which is designed to help you understand and further explore the opportunities as well as the value of the key solutions below.
This number of healthcare expenditures to be paid by patients is projected to grow to $340 billion by 2016 and $449 billion by 2021.2 These numbers will also likely be impacted by changes in healthcare insurance, driving individuals to potentially higher-deductible plans. On average, accounts receivable comprise more than 16% of a healthcare company’s assets.3 Increasingly, FIs are being asked to find ways to fund the patient payment portion of healthcare receivables.
In addition, most healthcare providers know it’s still quite difficult to obtain financing. Many FIs are uncomfortable with the unique aspects of the healthcare industry, including reimbursement rates and longer payment cycles. These issues can cause real problems with accessing the working capital healthcare providers need in order to be successful. BusinessManager for Healthcare is a safe and sound web-based solution that enables you to meet the needs of both providers and patients. The solution utilizes a state-of-the-art valuation analysis that provides lenders with the reimbursement knowledge to safely finance all areas of this market segment.
RemitPlus® for Healthcare Revenue Cycle Management
$30 billion annually is wasted on paper in American healthcare, and 66% is comprised of paper for health claims, billing, and payments by checks to doctors and hospitals.4 The healthcare industry estimates that electronic payments only account for 10-30% of transactions.5 The impact of continued use of paper payments may be as high as $4.80 per transaction for payers and providers combined.6 It is estimated that transitioning from paper to electronic can save the healthcare industry billions of dollars.
RemitPlus for HRCM gives your medical provider customers an efficient way to manage their payments and reduce processing times. It is an affordable, turnkey check scanning and imaging solution that enables healthcare providers to automate the check and payment handling process both quickly and effortlessly – to increase the value and velocity of healthcare receivables.
1 ushealthcareindex.com (National Progress Report Healthcare Efficiency 2010, Jane Sarasohn-Kahn, MA, MHSA)
2, 3 The Centers for Medicare and Medicaid Services
4, 5, 6 ushealthcareindex.com (Sarasohn-Kahn)