FinTechs Look to Leapfrog Point Solutions and Reward Good Health

Nothing makes a sick person feel worse than juggling a dozen healthcare apps, portals and payments to get well, and that’s driving a streamlining trend in digital healthcare in 2022.

With care costs rising at a time when consumers can least afford it, the old way of managing high-deductible health plans and big out-of-pocket balances using things like health savings accounts (HSAs) is becoming more and more of a stretch for households in every income segment.

Some see a survival-of-the-fittest factor coming into the digital healthcare picture through a near-future consolidation that will see the strongest point solutions thrive alongside large marketplaces that ease the consumer healthcare burden, from diagnosis through to payment.

“It’s no secret that most Americans are feeling the pinch of rising deductibles and increased out-of-pocket costs,” Matt Renfro, co-founder and CEO at Lynx, told PYMNTS’ Karen Webster.

Saying the HSA route “doesn’t necessarily work for the average American who can’t afford that unexpected medical bill,” he noted. “There are new models popping up that are just dedicated toward how [to] help save people money, whether it’s the GoodRx’s of the world or if it’s the Mark Cuban Cost Plus Drug Company from a manufacturing perspective.”

Companies including Lynx are approaching it through a FinTech-as-a-service for healthcare model, which takes a platform path to streamlining payments and point solutions. Also, as healthcare becomes more consumerized, he expects providers to lean into that more.

Renfro said emerging healthcare models “will extend to kind of mimic what we expect in loyalty programs from other industries, where companies are starting to think through how [to] help increase the purchasing power, not just for prescription, but how can we extend more value for over-the-counter products or for vision, dental, etc.?”

Teasing “a partner we’re not allowed to announce at this point,” Renfro told Webster that Lynx’s mystery partner connects healthy behaviors to consumer rewards like cash back. He sees this as the new direction for more consumer-centric care and payments options.

He said this partner ties healthy behaviors “to unlocking a new level of spending on different ancillary activities. It could be something related to your lifestyle, maybe you want to book a flight or different type of travel, or perhaps that extends to everyday purchasing. If I perform the right healthy behavior, maybe that goes as far as purchasing glasses with cash back.”

It’s a fundamental business model change for healthcare, and one that seems more aligned with the digital shift and the emergence of the paying customer-patient mindset.

See also: Consolidating Point-Solutions to Adapt in a Changing Economy

Healthy Rewards

Cash back for adhering to healthy behaviors could be a mighty motivator, with applications across the spectrum of healthcare services that consumers are paying more to receive.

Saying this concept is expandable beyond prescription savings to office visits, OTC medications and more, he noted vast potential in “the behavioral economics of [earning] money today for doing a certain behavior that my employer or health plan may pay me for and turn that into real value on the back end through a different type of marketplace.”

Given his experience overseeing major initiatives for Optum and United Health before moving to Lynx, Renfro thinks payments can be part of the cure for what ails the sector right now.

As he told Webster, “Whether it’s a nontraditional entrant or the largest player in the space, people are starting to see how we can leverage scale and massive distribution or purchasing power to add value to all spectrums of people, whether it’s someone experiencing rising deductibles, or if it’s the uninsured person who just really has to have insulin and can’t afford it today. There’s clearly a lot of opportunity that different companies are looking at.”

These problems seem as old as healthcare itself, but the pandemic hit followed by a recessionary gut-punch is bringing affordability to the fore, and FinTechs are lighting the way. Part of the problem is a lack of innovation and modernization in healthcare payments.

Noting the shift of health costs from employers and plans to the employees tracking that of pensions and 401(k) plans over the past three decades, Renfro questioned the effectiveness of schemes that were put in place in the ’80s and ’90s on today’s costs.

“Perhaps a tax advantage account works very well for the CFO, but not so well for someone that’s struggling to make their next utility bill, which has ramifications,” he said. “If I can’t afford that utility bill, healthcare’s on the back of my mind. I’m not going to do a preventative visit because I need to make sure I can afford my next meal. That has a downstream impact on medical expenses.”

That’s forcing a rethinking of models, particularly as the ranks of nontraditional gig workers swell and need accessible, affordable healthcare payment options that seem out of reach. “I need to figure out how am I going to save time and money? Maybe it’s through a GoodRx. Maybe it’s through an Optum store,” he said.

“It’s just continuing to highlight that the consumerization of healthcare is here. From our perspective, at the end of the day, all people want to do is save time and money, and that’s challenging in healthcare.”

See also: Lynx Lays FinTech Tracks to Help Providers Integrate Healthcare, Finance Flows

End-to-End Control

As Lynx and others innovate to put healthcare consumers, employers and insurers on the same page, the focus will increasingly be adding value, lowering costs and simplifying processes.

Numerous players already at the intersection of insurance payments and benefits administration don’t want to find themselves disintermediated, he said, but that window is closing as FinTechs build their rep on disintermediation and healthcare is ripe for the picking.

By introducing a vertical FinTech-as-a-service platform for healthcare enabling benefits administrators or health insurers to control end-to-end experience starting with simple incentives like cashback or other rewards, he said new efficiencies can be realized.

“We’re bringing programmatic APIs so those companies that have wide distribution and are able to reach a mass of consumers and negotiate special deals downstream where consumers need to engage in healthcare [are] able to control that experience within their own super app or digital experience so they’re not reliant on five different partnerships,” he said.

Nodding to everyone driving into healthcare from Amazon to other FinTechs like Sesame, the winners will be those that understand they “don’t need a third-party partnership. You can control the financial experience with your members without having to worry about the hard stuff, the banking relationship, the brokerage, the RIA, even on the fulfillment side. That model just doesn’t really exist today.”

It’s a break from the old model, offering providers more direct control over crucial aspects of the patient journey from initial video visit through treatment and final bill.

Likening the shift to what’s already happened in financial services, Renfro said companies “want to control the financial relationship. I want to own the data associated with that, and that’s kind of where we’re positioned to help them start crafting a new financial relationship with their members. People are more engaged in their finances than they’ll ever be in healthcare. It could be very valuable to meet people where they are to then drive better outcomes.”

“Everything takes time in healthcare, but there are certain institutions who have all the assets and there’s a number of new, call it FinTechs, call it HealthTechs, that are positioned to enable them to really build this streamlined experience that simplifies healthcare for people.”