A Look at the Trends in Healthcare Payments Sixth Annual Report: June 22, InstaMed. All rights reserved.

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A Look at the Trends in Healthcare Payments Sixth Annual Report:

About the Presenter Jeff Lin Senior Vice President

4 Trends in Healthcare Payments Report Sixth Annual Report Looks at Trends Across All Healthcare Payments Providers, Payers and Consumers Quantitative and Qualitative Data InstaMed. All rights reserved.

5 What s the Data Telling Us? The Healthcare Payments Market Is Changing Fast Consumers Are Demanding Change in Healthcare Payments Too Much Paper Prevents Necessary Changes In Healthcare Lack of Digital Security Creates Urgency for Change InstaMed. All rights reserved.

nearly $1 of every $5 will be spent on healthcare in the U.

6 The Healthcare Payments Market Is Changing Fast More Americans Have Access to Healthcare Than Ever Before By 2024, it is estimated that nearly $1 of every $5 will be spent on healthcare in the U.S Source: Centers for Medicare & Medicaid Services InstaMed. All rights reserved.

7 Consumer Payment Responsibility Continues to Increase Individual Insurance and High Deductible Health Plans 12.7 million consumers enrolled in a health plan through public and private exchanges during Open Enrollment 2016 As of January 2015, 19.7 million consumers are enrolled in HDHPs, representing a 22% increase for each of the last two years Sources: Centers for Medicare & Medicaid Services America s Health Insurance Plans InstaMed. All rights reserved.

8 High Deductible Health Plans Are Only Part of the Story All Consumers Are Impacted The average health insurance premium for family coverage has increased by 83% since 2005 $2,713 $4, The average deductible for all covered workers has risen 255% since 2006 $303 $646 $1, Source: Kaiser Family Foundation InstaMed. All rights reserved.

10 Digital is Changing Economies and Industries 80% of consumers are more likely to recommend a brand that offers a simpler experience 45% of U.S. adults own a tablet, compared to 4% in 2010 Any U.S. business needs to manage 6 channels Source: Accenture InstaMed. All rights reserved.

11 Healthcare is Not Exempt From These Changes 18% of all online payments were made on a mobile device in % of consumers are interested in Apple Pay, Samsung Pay or Android Pay to make healthcare payments 65% of consumers want to pay their health plan premiums online Source: Trends in Healthcare Payments Sixth Annual Report: InstaMed. All rights reserved.

Consumers Are Driving Change in Healthcare

12 Consumers Are Driving Change in Healthcare Payments Consumer Expectations Have Been Set Leaders Across Industries Are Influencing Consumer Preferences Leaders changing the consumer experience and consumer perception InstaMed. All rights reserved.

Consumers Are Bringing These Expectations to Healthcare What Consumers

including payment cards 91% of consumers want to know their payment

automatic deductions for their recurring premium payments Source: Trends

13 Consumers Are Bringing These Expectations to Healthcare What Consumers Want 72% of consumers prefer to pay with an electronic payment method, including payment cards 91% of consumers want to know their payment responsibility upfront 91 % 57% of consumers prefer the option to schedule automatic deductions for their recurring premium payments Source: Trends in Healthcare Payments Sixth Annual Report: InstaMed. All rights reserved.

all other consumer bills 76% of consumers said that they were confused by their healthcare bills The majority of payers

14 Consumers Are Bringing These Expectations to Healthcare What Healthcare Delivers Today The percentage of paper bills vs. electronic bills is almost double in medical bills vs. all other consumer bills 76% of consumers said that they were confused by their healthcare bills The majority of payers offering individual insurance indicate check as their primary payment method Sources: Aite Trends in Healthcare Payments Sixth Annual Report: InstaMed. All rights reserved.

last year, we could circle the globe six times! So

15 There s Still Too Much Paper in Healthcare Contributing to Excess Waste If we lined up all the paper statements providers mailed to patients last year, we could circle the globe six times! Sources: U.S. Department of Health and Human Services MGMA InstaMed. All rights reserved.

bill from their providers in 2015 24% of consumers actually want to use

16 Expectation vs. Reality: Providers and Patients 87% of consumers received a paper medical bill from their providers in % of consumers actually want to use checks to make healthcare payments Source: Trends in Healthcare Payments Sixth Annual Report: InstaMed. All rights reserved.

Security is Top of Mind In the News In the last

attacked Source: Healthcare IT News and HIMSS

18 Security is Top of Mind In the News In the last year alone, more than 50% of U.S. hospitals are estimated to have been victim to ransomware with many unsure if they had been attacked Source: Healthcare IT News and HIMSS Analytics Quick HIT Survey InstaMed. All rights reserved.

The Threat Is Real Healthcare Organizations Are More Vulnerable to

healthcare organization happened in 2015 The largest number of

comprised 39% of all breaches in the year 1 in 3 Americans have

19 The Threat Is Real Healthcare Organizations Are More Vulnerable to Attacks and Fraud 8 of the 10 largest hacks into any type of healthcare organization happened in 2015 The largest number of breaches took place within the Health Services subsector, which comprised 39% of all breaches in the year 1 in 3 Americans have been victim of a healthcare data breach Sources: U.S. Department of Health and Human Services Symantec Internet Security Threat Report Bitglass 2016 Healthcare Breach Report InstaMed. All rights reserved.

with a pin Updates to the PCI Standards PCI version 3.

20 Security Is Top of Mind Financial Regulations Are Evolving Quickly EMV fraud liability shift October 2015 Since October 1, 2015, merchants are liable for any fraudulent transaction using an EMV card at the point of sale that wasn t authenticated with a pin Updates to the PCI Standards PCI version 3.0+ went into effect in January 2014 Contains 20 evolving requirements from the previous version, including regarding penetration testing and vendor relationships InstaMed. All rights reserved.

21 Conclusions There Is a Dramatic Shift in Healthcare Cost Sharing A New, Critical Stakeholder Has Emerged: The Consumer Paper Is Quickly Becoming Unsustainable Healthcare Is More Vulnerable to Attacks and Fraud InstaMed. All rights reserved.

Sixth Annual Benchmark Study on Privacy & Security of Healthcare Data

Sixth Annual Benchmark Study on Privacy & Security of Healthcare Data Sponsored by ID Experts Independently conducted by Ponemon Institute LLC Publication Date: May 2016 Ponemon Institute Research Report