Digital disruption is coming to health as it has come to every other area of the economy – but perhaps more slowly than in most.

The $120 billion health payments market is dragging the chain on digitisation, largely because it is “more complex” than virtually any other aspect of our digital lives, says Mark Raymer, Executive Merchant Services at NAB.

“If you compare health to the merchant business, all of the players in the ecosystem were all moving at broadly the same pace,” Raymer says.

“When tap-and-go payment was rolled-out a few years ago, it started out piecemeal with smaller players, then gained momentum rapidly when the major fast food chains and supermarkets got on board. You don’t have that same pressure coming from the disparate players in health.

“Health has got GPs, surgeons, anaesthetists, physiotherapists, chiropractors, pharmacists, you’ve got health funds, you’ve got government departments, who run the funder side of things, and you’ve got Medicare in the middle of it, and everyone is doing different things, with lots of different practice management software systems. It simply is more complex, and an industry that has just been a slower adopter of payments technology than others,” he says.

While health is a market, it’s “an imperfect one,” says Andrew Irvine, NAB Group Executive for Business and Private Bank. “There’s the patient, there’s the practitioner or the provider of services, and there’s the actual funder or payor, and it has to work for all of them. Unfortunately, there are many aspects of the provision of health services that are still really manual, and highly paperwork-intensive.

“If you’re a healthcare provider, you could be seeing someone who’s paid by Medicare, you could be seeing someone who’s paid by private health, you could be seeing someone who’s being paid by workers’ compensation, you could be seeing someone who’s being paid by the National Disability Insurance Scheme (NDIS), you could be seeing someone who’s paying out of pocket, and all of the above,” says Irvine.

“And every one of those things comes with its own idiosyncratic complexities. Throw in pharmacy claiming, which still today is still a very manual process, and you have a very high-friction experience.”

NAB is already a major player in the health payments space, through its wholly owned subsidiary HICAPS (the Health Industry Claims and Payments Service), which is the dominant provider of payment terminals to the industry, used by all of Australia’s private health funds and more than 94,000 health service providers.

Recently, the bank bought digital health claims start-up LanternPay, which was built to standardise the claims and payment experience for all providers of services to government and private healthcare schemes, including private health insurers, state workers and accident insurance, Medicare and the NDIS.

Irvine says the combination of HICAPS and LanternPay will bring the best of HICAPs and LanternPay together, to create a smoother digital payments experience and further accelerate the industry’s digital transformation.

“In all other areas of our lives now, digital and mobile have really come of age,” says Irvine.

“People can book an airline ticket on their smartphones, they can buy a stock, can buy a fridge. They expect and demand that capability, and health is no exception,” he says.

“LanternPay enables mobile claiming for Medicare, for certain private health insurance, and workers’ compensation, and NDIS as well, but what it didn’t enable was gap payments; whereas, HICAPS has that capability through its terminal. One of our priorities with LanternPay is to create a smartphone HICAPS app to allow claims to be made through mobile phones for practices that do not have physical terminals.”In combining the best of HICAPs and LanternPay, Irvine says NAB has a digital experience with more modalities.

“In one shot, you can both make the claim and pay the gap payment to the provider. But what we’re really working toward is that we see the potential for having an app that not only removes the friction, and does the transactions for you – the payment, the claim and the reimbursement – and does it instantly.”

With the app as the “one source of knowledge”, all sides of the health marketplace benefit, Irvine says, because all the relevant data is accessible instantly.

“The consumer, the patient, often simply does not know what they’re eligible for – they might pay for medicines, and even if they know they are supposed to be reimbursed, they might never get around to claiming. We end up with people actually not utilising the coverage that they’ve paid for or earned, because it’s just too hard.

“It would be great to have something that’s smart, that gives you a clarity on what your eligibility is in terms of your insurance, and what proportion of a purchase you are covered for, so you don’t have to do all that maths,” says Irvine.

“Your app tells you, ‘OK, I’ve utilised a service, 70 per cent is getting paid by my insurance, 30 per cent is coming out of pocket, and here’s how my balance stands after that.’ If people know how much coverage they have left, you start to be able to give advice to the consumer to say, ’You’ve got enough coverage to do this once a month. Do you want to book next month’s appointment? They may not, but you’re starting to bring the data to actually enhance the experience and provide guidance to the patient.”

And the true beauty of this is that works just as well for the practitioner and the payor, Irvine says

In an app-driven healthcare world, the “efficiency dividend” of streamlining a $120 billion spend is “potentially enormous”, Irvine says.

“We expect significantly reduced time and effort for practitioners, and considerably less wasted spending. If all spending is tracked and optimised, it opens up something that this industry has never really considered – the time value of money.”