Payment Modernization Cannot Wait: The Urgency of Digital Transformation in Healthcare
Although digital payment adoption is rapid, critical sectors like healthcare remain trapped in manual and paper-based workflows, with estimated annual losses reaching $18.4 billion. A recent White House executive order requiring federal payment modernization signals a cross-industry transformation. The healthcare case shows that administrative burdens continue to rise, and automated payments can significantly reduce costs and improve efficiency, but require strategic collaboration and platform support.
Editor's note:Yusuf Qasim is President of Payments at Zelis Healthcare, a technology services provider, based in New Jersey.
Despite the continued rise in digital payment adoption, many critical industries, including healthcare, remain mired in manual and paper-based processes, leaving an estimated $18.4 billion in potential savings unrealized. The White House's recent executive order, "Modernizing Payments To and From America's Bank Account," sends a clear signal: digital payments are no longer optional but the new norm.
Although the executive order directly targets federal payments and receipts, it represents a broader push for industries still clinging to traditional payment models to transition toward fully digital, efficient, and secure payment ecosystems.
Compared with industries like retail and banking that have already deeply digitized, other sectors lag significantly in adoption, leading to payment delays, increased administrative burdens, and greater resource waste.
The healthcare industry is a prime example of why digital payments are crucial inallscenarios—and what consequences can arise from overlooking their value.The CAQH Index reportshows that administrative task spending surged from $55 million in 2022 to $82.7 million in 2023, reflecting growing systemic pressure in the industry. Combined with challenges such as staff burnout and workforce shortages, modernizing payment systems can play a central role in reducing healthcare costs and inefficiencies.
In fragmented industries such as healthcare, logistics, utilities, and government, over-reliance on paper checks leads to delayed reimbursements, higher operational costs, and increased risks of fraud, theft, and loss. For organizations handling highly sensitive financial and patient data, security must be a top priority.
Take ACH payments in healthcare as an example: they offer a secure payment solution that streamlines workflows, accelerates reimbursements, and improves cash flow. Automating these processes is estimated to save about 3 minutes per payment transaction and 4 minutes per electronic remittance advice (ERA) transaction, significantly reducing administrative overhead.
However, digital adoption is only the first step; there remains significant room for improvement. Take ACH, a mainstream standard, as an example: even with free ACH options, providers often still need to log into multiple portals and maintain a directory of passwords for interactions with all payers. To enhance efficiency and enable providers to receive payments transparently and efficiently, additional investment and capability building are needed.
For complex industries like healthcare, successful digital payments require strategic collaboration across departments and organizations—especially with partners who understand evolving regulatory requirements, security compliance standards, and the growing demand for speed and transparency. Whether used to manage payment distribution or streamline supplier payments in logistics, dedicated platforms can play a key role in reducing industry friction.
Beyond immediate operational relief, transitioning to digital payment infrastructure is a long-term efficiency strategy. Modern payment systems not only ensure compliance with government directives and meet evolving consumer expectations but also lay the foundation for future innovations such as real-time payments.
The healthcare industry is a typical example of the costs of resisting or delaying payment modernization, but it is by no means alone. The consequences of outdated manual processes—rising costs and security risks—are spreading across numerous industries. The White House executive order calls for a nationwide push for payment modernization to build a more efficient and secure ecosystem.