Mapping Markets
June 25, 2024

AI Patient Payments Market Map: Helping patients pay up

Patrick Wingo's headshot
Patrick Wingo
Head of Research, Elion

This is part of Elions weekly market map series where we break down critical vendor categories and the key players in them. For more, become a member and sign up for our email here.

Almost 70% of patients’ hospital bills don’t get paid in full. With the rise of high deductible health plans putting more payment responsibility on patients, hospitals can’t afford not to leverage better tech for the patient payments step of revenue cycle management (RCM).

The Current Patient Payments Market

In the legacy fee-for-service patient payment model, the hospital revenue department (or an outsourced firm) sends out bills, tries to take payment, and after 60-120 days sells them to collections.

Tech entrants in this space in the last 5 years have focused on one of the hardest parts of this problem: engaging with the patient throughout the journey so that when the bill is due, the patient understands it and sees a clear path to payment. However, were still seeing underpayment across the majority of patient bills.

AI Solutions for Patient Payments

To be included in our AI patient payments category, products need some combination of:

  • AI-generated patient bills or explanations, minimizing errors and helping patients understand their bills.

  • Billing inquiry chatbots that help patients handle routine billing questions and workflows.

  • Optimized payment schedules that help determine the optimal times and channels for reminders, messaging, etc.

  • Integration of relevant data and prediction of ability to pay in order to provide discounts, payment schedules, and other financial support for patients.

AI Patient Payments Market Segments

In the new AI-enabled model, there are essentially two main market segments that echo their legacy counterparts: Patient financial engagement companies are taking over the role of the revenue department, and companies that model or even take on financial risk are replacing  “early out” and collections vendors.

Patient Financial Engagement: Like their predecessors, these digital front door technologies focus on creating strong consumer experiences for payments, effectively bringing modern UIs and communication tools to consumers.

They are differentiated from older solutions in that they use machine learning for optimizing messaging, delivery time, and message channels. They may also include billing inquiry chatbots and AI-generated explanations for bills, both for patients and providers. Examples include:

Patient Financial Risk: These tools leverage AI to predict (based on datasets around demographics, income levels, and credit scores) whether patients will actually pay, how much they can pay over time, and create payment plans to help patients pay off bills. In some cases, vendors are also automatically paying health systems and taking on financial risk to collect from patients.

The Future is Integrated

As you can see, some companies like Flywire are integrating across both roles, and we suspect more companies will cross that divide. Without AI, patient financial engagement products would likely have remained SaaS tools, because they’re unable to integrate payment plans and financial risk, and thus guarantee outcomes to health systems.

We believe the future for patient payments will be hospital systems getting paid immediately, and AI-enabled patient payment platforms becoming responsible for collections. We’re eager to see if this is the direction more vendors begin to move.

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