FinTechs Take on Healthcare Payments’ Most Glaring Inefficiencies

Healthcare data workflows are notoriously disconnected and inefficient, injecting cost, time and anxiety into already-fraught medical situations. It’s ripe for disruption, and still surprisingly behind the digital transformation curve that’s reinventing other aspects of our lives.

Some FinTechs are taking on the disjointed nature of healthcare payments with platforms and application programming interface (API) integrations that make sense of the medical billing and payments maelstrom — and they can be quite frank when addressing just how much modernization is needed in this area.

Taking it from the angle of what embedded payments offer in clearing up the confusion, Lynx co-founder and Chief Information Officer Ken Abel told PYMNTS’ Karen Webster that on the transformation front, “Healthcare is probably trailing in that shift,” as more responsibility falls to the patient-consumer who wants to know why healthcare payments can’t be more like PayPal.

“What is really driving everything is that individuals are starting to expect more out of these experiences, aligned with what they get from Venmo, what they get from Cash App in terms of real time and transparency,” Abel said. “The traditional players in healthcare have sort of lagged in that, but that’s part of the services that Lynx is bringing forward to really help bridge the gap.”

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An ideal example of the malingering muddle in healthcare is the dreaded explanation of benefits (EOB) that often contains the words “you may owe,” which is a red alert for consumers.

Lynx wants to eradicate “you may owe” from the healthcare lexicon, Abel said.

“How you do that is the institutions that are supporting those claims processes, if you give them programmatic APIs that they can embed within those workflows, they’ll have access to that payment loop and be able to update those transactions and provide more seamless guidance and a more seamless experience to the individual,” he explained.

The caveat? “Those that don’t offer those solutions either online or carded are going to find themselves behind the eight ball when it comes to attracting employees and attracting retail customers for their health services,” he said.

The Trouble With Traditional

Despite massive upheavals to the healthcare system and a pandemic-era expansion in how and where services can be rendered, the sector still lags when it comes to how data is used — or not — in billing and payments, as well as basics like moving one’s care to another system.

Given the fact that healthcare benefits are not transferable should a person leave their employer, for example, Abel called that “an ongoing challenge in terms of creating a seamless experience that the individual can leverage as they transition from employer to employer. What we can say is if the old organization and new organization are supported by Lynx, we solve for that. But we know that we’re only a small piece of the pie.”

As an industry, he added, “We’re honestly just not there yet.”

To get there from here, he said, real-time transparency is a missing link that needs to be filled in, adding that “we’re still not there yet in healthcare” either. That’s becoming more glaring as the consumer-patient has a new set of expectations that befuddles traditional players in the space.

“All of the componentry is there,” he said, referring to patient data and payment lineage.

The trick is having systems to digest information and create workflows enabling individuals “to easily understand where they sit, what has been paid, what hasn’t, what offerings are available to them, and then leveraging that engagement to get better outcomes by pushing forward incentive programs and other things” that are available to individuals but often go unused.

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The FinTech opportunity is leveraging financial engagements with healthcare financing solutions like HSAs to confer valuable information to patient payers so as to enhance the relationship.

“The issue that you have right now is those experiences are disjointed,” he said.

When billing and payments are siloed, sending payers to different systems, “What you’re effectively doing as an employer and as a health plan is you’re forfeiting that engagement to another system, where if you were to integrate that into your own solution, you could close that loop, be able to get the benefits of those additional incentive programs, better outcomes and lower costs.”

The Next Level of Connection

As much as consumers want healthcare to start behaving like Venmo, that’s a stretch given stringent HIPAA regulations and the sensitivity of the information. But things can and are moving in more connected directions, including improvements to the incentives aspect.

Whereas incentive programs may have traditionally meant a one-time gift card for completing a health challenge, Abel said that’s an easy fix that can increase engagement and improve outcomes.

“We’re saying you can be more intentional than that,” he continued. “You can offer a card that’s reloadable, that allows you to really build a long-term relationship with the individual while leveraging these incentives on the front end to drive these activities.”

That reloadable card becomes a new access point to patient metrics that feeds into better experiences “and next best actions, which is a key theme within healthcare,” he said.

This begins with the traditional players plugging these gaps with the help of innovative FinTechs that have solved important pieces of the billings and payments puzzle for providers.

“They’re sort of entrenched in those payment flows, talking about the insurers and ultimately the employers that shop around for health plans,” Abel said. “It’s really ensuring that those participants are taking advantage of the innovations that have occurred over the last 10, 15 years within payments. You would think that that would just be an inherent thing, but it’s truthfully not something that’s happening.”

Major players like Big Tech firms certainly see the opportunity, explaining why every one of them is vying for a seat at the healthcare table, taking in everything from wearables to walk-in clinics.

“Look at someone like an Amazon, the big behemoth, they’re looking at the space,” he said. “They understand how much cash flow is happening here. I think the traditional players are aware of that, and they’re looking to make those investments in payment solutions and better experiences to try to compete with those tech companies that they know are coming.”