Beyond Credit Scores: How Personalized Payment Options Incorporate Behavioral and Demographic Factors to Accelerate Speed to Revenue
Written by: Lanae Smithers, Veradigm Associate Manager, Payerpath and Lisa Temporale, Veradigm Sr. Solutions Manager
In healthcare today, a one-size-fits-all approach to collecting medical payments is no longer sufficient. Patients face increasing out-of-pocket healthcare costs, increasing deductibles, and increasing copays. Their diverse backgrounds, financial situations, and payment preferences all significantly impact how, when, and even if they pay their medical bills.
Understanding and responding to your patients’ unique challenges demonstrates empathy for their circumstances. It’s also smart business—a way to help you improve patients’ payment experience while improving collections overall. It can help you get paid faster, reduce A/R days, and reduce bad debt.
How does this work? The first step is learning to identify the connections between patient characteristics and their payment behaviors, then leveraging those connections to better understand how to motivate payments.
Demographics and payment tendencies: What the data reveals
Researchers have identified a wide range of factors that can influence patients’ payment behaviors, such as age, education, race, ethnicity, income, gender, employment, insurance coverage, and even marital status. These factors influence how patients:
- Are able to pay
- Are most comfortable paying
- Prefer to receive communications about bills and payments
Analysis of patients’ demographic data enables you to predict these 3 key payment-related traits, which are essential for understanding patients’ future payment behaviors.
1. Patients’ ability to pay
Existing medical debt can significantly impact patients’ ability to pay for medical care—and medical debt is a growing issue in the U.S. The Kaiser Family Foundation reported the number of U.S. adults with healthcare debt at more than 100 million (41%); KFF’s Health Care Debt Survey revealed that over half of U.S. adults (57%) had dealt with medical debt within the past 5 years.
Predictive models that rely on demographic and behavioral data, along with other factors, such as insurance status, age, and employment status, can be used to help predict patients’ ability to pay their medical bills.
2. How patients are most comfortable paying
Patients’ payment preferences can be influenced by multiple sociodemographic factors. For instance, patients in different age groups tend to pay using different payment instruments. Younger patients (below 40) are less likely to own credit cards than those older than 40. Younger patients are more likely to adopt and use innovative payment methods such as credit cards’ contact-free payment features, Apple Pay, or Google Pay.
Patient age also strongly influences the adoption of new payment technologies such as paying via text-to-pay links, setting up recurring payments, or securely storing payment methods. Millennials (ages 27 to 42) lead the way in technology adoption. In a recent report from US Bank, Millennials comprised 33% of those who paid medical bills by text-to-pay link, 34% of those setting up recurring payments, and 30% of those who stored preferred payment methods with their medical practice.
Baby Boomers (age 59 and above) are much less likely to use digital payment methods than patients in other age groups. They made up only 23% of patients using a text-to-pay link payment option and only 19% of patients storing a payment method with their provider.
Experts in healthcare payment and collections are encouraging healthcare providers to boost their net collection rates by aligning their patient billing and payment processes with what patients encounter in the retail environment—providing payment options that are flexible, self-service, and personalized to individual patients’ needs.
How patients prefer to receive payment-related communications
Patients have a variety of preferences for how they receive payment-related communications.1 This means the method used to communicate financial information can affect how quickly—and even if—patients pay their medical bills. Tailoring communication channels to each patient’s preference is a simple way to increase overall payments.
As a first step, the majority of patients (62%) prefer digital payment notifications (text or email), irrespective of age—but 75% of providers still rely on paper-based and manual collection processes. Traditional printed and mailed bills require more time, effort, and cost to produce, and they don’t line up with the expectations of today’s digitally focused healthcare consumers.
Digital payment notifications are also highly effective. One study showed that 32% of patients receiving digital notifications completed payment within 5 minutes.
Using patients’ previous payment behaviors to predict the future
Research shows significant correlations between patients’ previous and future payment behaviors. “Behavior-based billing” involves analysis of these historical payment patterns along with the demographic factors discussed above. By adding analysis of patients’ past payment behaviors, practices can harness predictive analytics to forecast the likelihood of timely payments versus nonpayment.
Predictive analytics enables practices to create a more tailored patient billing experience. For instance, practices can send reminders to at-risk individuals or offer personalized payment solutions. By aligning payment options with patients’ needs, healthcare organizations can improve patient satisfaction and relationships while increasing the likelihood of timely payments.
The result? Enhanced cash flow management, reduced bad debt, and reduced administrative costs—all while improving the patient experience.
One patient, one plan: The power of personalization
When patients find payment difficult, they will likely take longer to pay, if they pay at all. Unfortunately, consumers currently rank healthcare among the most difficult industries for making payments; 70% identify it as the most difficult. Healthcare consumers are asking for more digital payment options. Patients increasingly expect to find a simple, straightforward digital payment experience in healthcare that is similar to what they experience in retail. Unfortunately, the healthcare sector lags behind other industries in this area.
Practices must transform their healthcare billing and payment processes to facilitate patient payments. One way to do so is by providing more digital payment avenues.
Another transformative step: Identify and offer the payment and communications options your patients prefer. Instead of simply sending the same invoice the same way to every patient and hoping for the best, today’s providers can implement intelligent payment strategies based on patient demographics and historical payment behaviors. For example:
- Use patients’ preferred communication channels
- Offer customized payment plans based on patient income or past payment patterns
- Enable digital self-service options for those who want to pay at their convenience
Letting patients use their preferred payment methods helps them pay more quickly and increases the likelihood of payment.
Veradigm Intelligent Payments
Veradigm Intelligent Payments was designed to make intelligent payment strategies a reality for your practice. This solution applies innovative analytic technology to craft personalized communication strategies, enhancing billing efficiency, payments, and the patient experience.
Veradigm does not use credit scores in this analysis; credit scores aren’t inclusive of the whole population. Instead, Veradigm Intelligent Payments uses demographic and behavioral data to predict patients’ communication preferences, estimate their financial obligations, and identify those who qualify for financial assistance. By generating insights into the best ways to drive patient engagement, Veradigm Intelligent Payments can help you find the optimal ways to inspire patient payments.
Better for patients, better for providers
Limitations on patients’ available payment methods can significantly impact bill completion; for instance, 25% of customers report abandoning medical payments due to restrictions on credit card payments. However, clinics that use Veradigm Intelligent Payments’ scoring feature have seen measurable improvements:2,3
- A 12% increase in patients choosing the primary payment offer suggested by intelligence
- 25% faster patient payments within the portal
- A 5% decrease in portal abandonment by patients
- A 3% to 7% typical increase in overall yield
By meeting patients where they are financially, behaviorally, and technologically, providers can transform patient payments from a burden into a more manageable part of the care practice.
Contact us today to learn more about Veradigm’s digital-first payment approach or to request a demonstration of Veradigm Intelligent Payments.
References:
- Veradigm, 2023. New from Veradigm: Veradigm Intelligent Payments. VDMP-1365.
- Results may vary. Data on file as of December 8, 2023.
- Veradigm. Smarter Billing, Happier Patients: Transforming Financial Practices with Veradigm Payerpath (Webinar). May, 2025. Available on request.