8 Advantages of a Cashless Healthcare Practice
Cashless payments are becoming more and more popular in the healthcare industry.
Most patients and healthcare providers now prefer non-cash payments. These can include card, mobile, digital, and contactless payments.
The shift from cash transactions began as other payment solutions became mainstream. But that trend has gained momentum in recent years. And cashless payments have really taken hold.
So, why the rapid transition to cashless payments? And what’s in it for healthcare providers?
This article highlights the benefits and impact of cashless payments in healthcare. Keep reading to understand the importance of cashless healthcare transactions.
The Increasing Popularity of Cashless Healthcare Practices
Cash has been the king of business transactions for thousands of years. It replaced the rather inconvenient and unstructured batter trade system.
Everybody is familiar with the concept of cash payment. Exchanging goods and services for hard notes and coins is as basic as payment gets. Cash transactions are also instant and free. They also don’t involve greedy third parties or flimsy technologies.
There’s nothing wrong with getting paid in cash. But, cash has its issues—it’s not always the best payment method. And that’s why it’s losing its crown to newer, more sophisticated payment solutions.
Here are some stats putting the cashless revolution into perspective:
- 70% of Americans believe the US is becoming a cashless nation (CardRates.com)
- 1 in 5 Americans prefer cashless businesses (CardRates.com)
- In 2022, (41%) of Americans said none of their purchases in a typical week were paid for using cash (Pew Research Center)
- Non-cash payments value reached $128.51 trillion in 2021 after growing at a record rate of 9.5% annually since 2018 (The Federal Reserve)
- Cash only covered 16% of US consumer payments in 2023 (CNN)
- In 2023, cash was the third most popular payment method after credit and debit cards (The Federal Reserve)
The preference toward cashless payment is a universal trend. Not just a healthcare thing.
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The question is, what’s driving the move to cashless payments in the healthcare industry, and why now?
The Rise of Telehealth
The idea of telehealth has taken off in recent years. According to one study, the number of facilities offering telehealth services rose from 46% in 2017 to 72% in 2021.
Telehealth is a welcome addition to the healthcare industry, and it’s easy to see why. It’s a more convenient, accessible, affordable, and safer way to provide personalized care.
Cash can’t meet the remote payment demands of telehealth services. So, a growing number of patients resort to paying via cards, wire transfers, checks, or digital wallets.
Lingering Effects of the COVID-19 Pandemic
It’s been years since the deadly COVID-19 virus shook the globe. Yet, it imprinted a permanent mark on our social, political, and economic structures.
People became wearier of personal space, hygiene, and infectious diseases. For instance, many people still see cash as unclean—a vector for diseases. That’s one of the reasons contactless payments have become so popular.
Also, during the pandemic, most payments were made remotely using cashless means. Like many habits picked up from the pandemic, non-cash payments stuck.
End-to-End Digital Integration in Healthcare
The healthcare industry is more digitized than ever. Tech adoption, from electronic health records (EHR) and bioinformatics tools to AI analytics, is on the rise. So much so that the entire patient’s journey is completely paperless.
Speaking of paper, traditional cash does not fit with modern digital healthcare solutions. With everything running on automated systems, cash payment becomes a major inconvenience.
Rapidly Advancing Payment Technologies
Spurred on by rapid tech advancements, cashless payment methods have come a long way since the paper check. Today, patients and healthcare providers have dozens of cashless payment options at their disposal. These include virtual cards, digital wallets, mobile payments, wearables, and contactless devices.
Every new piece of tech makes cashless payment more accessible and convenient. The same can’t be said about cash.
The Need to Track Financial Data
One of the biggest problems with cash payment is that it lacks traceability. When it comes to bookkeeping, the best you can do is manually track invoices and receipts. Doing that is not only tedious and time-consuming but also erroneous.
Cashless payment systems seamlessly integrate with accounting software. They even link with accounting and EHR tools. This results in accurate, detailed, and streamlined bookkeeping. All of which is crucial for smooth financial management.
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8 Advantages of a Cashless Healthcare Practice
Before we discuss the benefits of going cashless, let’s get the basics out of the way. What does being a cashless business or cashless healthcare practice mean?
A cashless business accepts only non-cash payments. Similarly, a cashless healthcare provider does not accept cash payments. Instead, patients pay for healthcare services using cashless methods, such as:
- Credit, debit, and pre-paid cards
- Checks and e-checks
- Peer-to-peer payment apps
- Wire transfers
- Digital wallets
- Contactless payments
- Mobile transfers
Here are the top eight advantages of a cashless healthcare practice.
Convenient, Hassle-Free Payments for Patients
Paying for medical services without using cash is so much more convenient for patients. Around 42% of Americans don’t worry about having cash on them. You also can’t expect patients to always carry around enough cash to pay for healthcare services. For most patients, paying in cash would mean first going to a bank or ATM to make a withdrawal.
In a cashless practice, patients do not go out of their way to make a payment. Paying doesn’t get more convenient than swiping/tapping a card, pressing on a button, or writing a check.
Flexible Payment Options
With cash payment, there’s only one way to pay—in cash. But with cashless methods, patients have several payment options to choose from.
A cashless practice aims to provide as many non-cash payment options as possible. That way, patients can choose how they want to pay. Such flexibility reduces friction during payment by catering to each patient’s needs.
Streamlined, Fully Integrated Payment Solutions
One of the best things about going cashless is the ability to fully consolidate patient data in the practice. Cashless payment systems integrate with the existing data systems. This generates a complete account of each patient’s journey.
For example, you can link a payment system to your EHR software. That way, every payment the patient makes matches the corresponding bill and services rendered.
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Easier Health Insurance Claims
It’s much easier for cashless practices to prepare, submit, and follow up on insurance claims. This is because cashless transactions are easier to prove and verify. With an integrated system, costing, billing, coding, and payments can all be tracked on a single pane of glass. This minimizes errors and disputes in insurance claims and speeds up reimbursement.
Accounting Peace of Mind
Accounting becomes a breeze once you go cashless. Again, this comes down to the integrability of cashless payment solutions.
Cashless transactions on cards and digital transactions are automatically logged once the payment is made. Accountants do not have to manually enter each payment into a separate software application. They don’t even have to crunch any numbers when it comes to payments.
Automated accounting lessens the clerical load on the financial team. It also means fewer bookkeeping errors.
Safe Transactions
Which is safer: cash or cashless payments? This debate has been raging for a while now, but it’s finally settled. Going cashless is generally safer than taking cash.
Granted, accepting only cashless transactions introduces unique security challenges. These can include the risk of fraud and loss of patient data. But all these challenges have solutions that work. Most digital payment solutions, for instance, come equipped with robust anti-fraud features. And there are countless ways to beef up cybersecurity to protect patient data.
Non-cash payments are safer for patients too. Having a card or smartphone app rather than cold hard cash in the pocket is certainly safer.
High Inclusivity
Going cashless is a great way for a healthcare practice to be more inclusive and diverse. With more and more people preferring cashless transactions, there’s a good chance you might push away some patients for not accepting non-cash payments.
Also, a cashless practice enables you to expand your healthcare portfolio. For instance, a cashless payment system means you can offer telehealth services without worrying about remote payments or dealing with multiple currencies. Going cashless expands a practice’s reach beyond physical and international borders.
No Manual Paperwork
With a cashless payment system, you can have completely paper-free transactions. No paper invoices, receipts, or financial records.
Financial paperwork is cumbersome, tedious, and time-consuming. Plus, you must take extra care not to damage or lose precious papers. Cashless payment does away with all that. Instead of generating a long paper trail, cashless payments are verified, approved, and confirmed electronically.
The Impact of Cashless Transactions on the Healthcare Industry
Cashless practices are revolutionizing the healthcare industry. Here are 10 ways cashless transactions are driving positive change in healthcare:
- Reduced administrative load: Eliminating the requirement for manual documentation promotes quick payment transactions and reduces processing times.
- Better care: As billing and payment processes become more automated and streamlined, healthcare providers can focus more on treating and caring for patients.
- Patient-centered approach: Cashless transactions help personalize the patient experience by catering to each individual’s needs.
- Improved group health insurance schemes: Faster insurance claim processing results in prompt payouts. This minimizes the financial burden on both patients and healthcare providers.
- Reduced environmental impact: Cashless transactions minimize paper usage and wastage in healthcare practices.
- Better security and compliance: Industry regulations such as HIPAA and PCI DSS ensure the safety of sensitive patient information. This includes banking and payment details.
- Increased accessibility to healthcare services: Telehealth, an affordable and readily available way of providing quality personalized care, is a good example.
- Enhanced patient data integration: In cashless practices, payment information is interwoven into patient medical records. This forms part of the patient data structure.
- Simplified patient tracking and history: Healthcare providers can easily track each patient’s journey. All thanks to full patient data integration.
- Increased transparency in medical billing: With cashless payments, patients, insurers, and other payors can clearly see what they’re paying for and why.
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7 Tips to Implement a Cashless Healthcare Practice
- Assess your current cash-based payment system: understand its limitations and pain points.
- Together with all stakeholders, draft a comprehensive cashless payment policy.
- Put in place multiple cashless payment options that address the patients’ demand for flexible and convenient payments.
- Integrate the payment systems with your existing healthcare software.
- Check and meet the compliance requirements for cashless payments.
- Address security concerns such as data breach and fraud.
- Educate patients on how to pay for healthcare services using cashless payment methods.