As medical bankruptcies continue to plague Americans, PayZen has raised $220 million in new funding as it looks to expand its “affordability financing” offering for patients.
The round is made up of $20 million in equity financing and a $200 million credit facility, and will help PayZen scale its operations and product development, the company said in a Tuesday (Nov. 22) news release.
“PayZen has significantly expanded its existing warehouse facility to fuel the increasing demand for its products by healthcare providers,” the company said.
“As nearly 1 in 10 adults carries significant medical debt in light of rising healthcare costs, this expansion enables the company to directly improve the financial well-being of millions of U.S. healthcare consumers in a significant way.”
Based in San Francisco, PayZen launched last year and bills itself as a startup that “pays hospitals upfront for patient invoices and offers patients zero-interest, fee-free payment plans,” allowing hospitals to increase collections while making healthcare more affordable.
The new funding round comes at a time when medical debt — long known as the main cause of personal bankruptcy — has become somewhat more manageable thanks to digital payment tools that help consumers pay for care without falling behind or needing to forgo treatment.
This is driving greater innovation than ever in healthcare payments, with specialized lines of credit and buy now, pay later (BNPL) options increasing availability and uptake.
Asked how these factors shape industry innovations, Shannon Burke, senior vice president and general manager for health and wellness at Synchrony, told PYMNTS recently that better experience is the common thread, which leads to better health and financial outcomes.
Noting that post-pandemic the desire to access care in different channels will become more important to patients, she said, “The shift is not only looking at multichannel, both the clinical and the financial side, but also omnichannel [in the sense of giving] the same experience and the same type of offerings at pre-care, point-of-care, and post care.”