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New prospects for payment card application in health care

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  • Ann Kjos

Abstract

While consumers' use of payment cards has grown rapidly in many other areas, their use in making health-care payments has been far more limited. This paper attempts to explain several reasons for the slow adoption rates and identifies four related trends and developments that can be expected to lead to more rapid growth in the future: (1) a shift away from employer-provided health care to consumer-directed health-care plans, (2) an expansion of health-care savings accounts, (3) a move toward using debit and prepaid card applications to address limitations in paper-based environments, and (4) a recent Internal Revenue Service ruling intended to improve the efficiency of electronic payment processing. While these factors are expected to contribute to the acceleration of growth for payment card applications in health care, we know less about potential barriers stemming from consumer behavior, raising a cautionary note pending further research.

Suggested Citation

  • Ann Kjos, 2008. "New prospects for payment card application in health care," Consumer Finance Institute discussion papers 08-08, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpdp:08-08
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    File URL: https://www.philadelphiafed.org/-/media/frbp/assets/consumer-finance/discussion-papers/D2008NovemberHealthCareCardApplication.pdf
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    Keywords

    Payment systems;

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