As a rigid healthcare system reinvents itself in the wake of a crisis that exposed manifold weaknesses, paying for care is perhaps the most glaring, and where innovation is focusing.
Disrupting healthcare payments is a bit like rerouting the ocean — easier said than done at best — but a growing number of companies are bringing popular alternatives like buy now, pay later (BNPL) installments to the health space, benefitting both patients and medical practices.
Startup Walnut announced Thursday (May 5) its $110 million Series A led by Gradient Ventures.
“Being able to provide a valuable service without acting as an inflationary force on the cost of healthcare is a core part of our offering,” the company said in a statement. “We typically describe this as ‘buy now, pay later’ for healthcare. By enabling patients to pay in monthly installments, we alleviate the financial burden for our patients to help them afford and access the care they need.”
“On the flip side, we help healthcare providers capture more revenue by removing price as a barrier for their patients,” Walnut added in the release. “We also speed up their revenue cycle and increase collection rates, all while increasing patient satisfaction.”
Read more: Healthcare BNPL Firm Walnut Raises $110M
The pandemic revealed a spiraling medical debt problem, and few medical practices have prioritized payment options and flexibility. That’s changing as more lenders offer novel forms of installment agreements that have long been available, but often end in default.
In April, payments platform Alchemy brought things up a notch, introducing a fully automated “care now, pay later” solution specifically to address elective and cosmetic surgeries that have been down precipitously throughout the pandemic.
Zeroing in on situations where “financing options are sometimes unavailable due to an illegible patient credit score for lenders or banks,” Alchemy said in a press release that it has designed “a system specifically for these instances.”
“Our system has an onboarding application, sophisticated decisioning process that creates risk-based offers, as well as mechanisms to collect payments from patients at the time of the procedure through the end of the payment schedule,” Alchemy said in the release.
Medical Payments Intervention
PYMNTS research found that one-third of patients forego medical treatments over cost and payment concerns, and regulation like the No Surprises Act may cut the shock, but not the bill.
According to “The Payment Cure: How Improving Billing Experiences Impacts Patient Loyalty,” a PYMNTS report with research sponsored by CareCredit, 33% of patients “were aware that they needed to see a healthcare professional or receive medical care but did not do so.” The most frequently cited reason for this was that they were unable to pay for their care, with 22% citing cost as their prime concern, and 40% saying cost weighed heavily in the choice.
Get the study: How Improving Billing Experiences Impacts Patient Loyalty
Healthier Finances for Doctors and Patients
Companies including CareCredit and Rectangle Health among others have been at the vanguard of efforts to modernize healthcare payments by bringing transparency and FinTech capabilities, including artificial intelligence (AI) and machine learning, to bear on healthcare payments.
Another innovator making news is iVitaFi, a healthcare payment financing FinTech that debuted its iVitaFi MyPlan digital patient engagement and payment platform for hospitals and physician practices in late April.
In a press release, iVitaFi CEO Greg Falconer said, “Hospitals and practices can instantly connect eligible patients with the financial resources they need to be able to afford their medical care. Our platform provides multiple, digital engagement and payment options so that patients have an easy and convenient way to pay their healthcare bills.”
The new portal also gives online access to all outstanding medical bills “using single sign-on and [has] the option to quickly make a payment. Or, if patients prefer, they can easily self-enroll in a short-term or long-term payment plan or a hassle-free, 0% interest line of credit — up to 36 months, regardless of their credit score.”