Healthcare Payment Automation and Outsourcing Could Affect CRE

Many trends affect healthcare real estate. More decentralized treatment structures have shifted focus from medical office buildings to medical outpatient buildings. Telemedicine and so-called medtail are ways to deliver medical help outside of traditional structures.

Colliers has pointed out in a new report one that might come less to mind: payment automation and outsourcing. That can mean almost anything from a “digital-first patient-facing payments system for bill pay,” a shift from paper-based systems to computerized processing; or third parties that can handle insurance submissions.

What all of these have in common is the potential to reduce the need for people — who can be hard to find in a tight labor market — and filing cabinets. Less space needed means less investment in real estate.

Currently, processes are still “overwhelmingly” manual and paper-based. About 70% of providers receive paper check payments. A big reason is the “fees payers charge providers for electronic payments.” However, three-quarters of patients want to pay medical bills online.

According to Colliers, 60% of healthcare providers are moving toward “online, automated, and self-service payments.” Providers have begun to use web-based systems to help with check-ins, copay collections, and integration with digital medical records. It will, however, take time. Many providers and systems say they will need more than three years to reach the amount of digitization and automation they want.

One payment clearinghouse said that in 2023, there was a 7.3% year-over-year increase in healthcare fund payments. Of course, without a baseline number, it’s hard to know exactly what that means.

Increased use of technology in payments is likely to include artificial intelligence applied to payments, if for no other reason than “AI” is being applied everywhere. According to Colliers, spending on generative AI in particular will reach $22 billion in healthcare by 2032.

Another change will be the use of technology to enable newer approaches to payment. Something that Colliers noted was moving beyond pay-per-service to installment payment. Buy Now, Pay Later could offer financing options. “More firms are offering this option, with some providing ways to avoid paying interest or other financing charges,” it wrote.

Value-based care (VBC) gives providers incentives for better patient outcomes. Comprehensive treatments and coordination between different providers could ultimately result in more affordable care, which helps the payment process.

The more efficient that payment becomes, the less space providers will need to set aside. However, chances are that providers could use the news to further their practices.