By Christopher Wolfington
As deductibles rise higher and higher, patients are bearing more and more of the responsibility to pay their medical bills. This means that patients have the burden of figuring out how to pay for their treatment if they can’t afford it as well as the specific details of how and where to send the money. Such complication can result in late or missed payments and even more paperwork and hardship. Several medical startups are trying to do something about it.
Cedar, a company launched in 2017, recently announced a 36 million raise in Series B funding, led by the global investment company Kinnevik. This investment validates that the financial and healthcare communities know that healthcare has a big problem with Patient Financial Management. But is technology really the answer? Is some of the early success really a false positive result?
The goal of many start-ups is the simplification of the patient financial process with technology. Many have built intuitive mobile application with a simple and clear user interface that allows patients to pay bills from their breadth of medical services all in one place, as a one-stop-shop of sorts. Unfortunately, most of the technology solutions don’t start until after care and after the bill has been sent to the patient. This is simply too late. The market is not mature enough for slick technology or Apps like Cedar’s that patients won’t use simply because patients won’t pay a bill they don’t understand. This is why less than 3.5% of patients nation-wide make a self-service payment. Complicated transactions require consumer engagement, and healthcare is complicated.
Many tech companies like Cedar report positive results, like a 60% increase in self-serve payments. However, considering only 3.5% of patients make self-service payments, a 65% increase gets the total number to a dismal 5.7%.
The answer? Engagement, engagement, engagement, and as early as possible. Patients won’t pay bills they don’t understand and neither would you. Any product or service that addresses the problem after the bill is sent is too late.
The good news is the industry is starting to pay attention to the problem and there is a lot of room left to improve in the patient financial experience in healthcare. Innovation and practical thinking can solve the problem but it takes leadership. Being committed to discussing patient financial responsibility pre-care is a big culture change that only the C-suite can initiate. Whether the start-up community transforms health care as we know it or not (or somewhere in between), the potential of fintech startups to improve patient financial management and other channels is certainly exciting.