• September 29, 2023

What Healthcare Can Learn From Fintech

Florian Otto is CEO & co-founder of Cedar, a leading healthcare financial technology platform transforming the consumer financial experience

The last decade has fundamentally transformed consumer expectations and demands. Now more than ever, digital-first experiences reign supreme, even in industries not known for consumer-centricity. 

Just look at financial services. Consumer fintech adoption has increased four-fold in the last five years. According to recent research by Stanford Law School, “Fintech innovation driven by non-bank entities is … changing customers’ experience and expectations by promoting a more client-centric and interactive approach to financial and banking services.”

Healthcare, however, has failed to keep pace, even as consumers’ financial burdens have skyrocketed. Covid-19 demonstrated how technology can transform healthcare, but it also exacerbated the problem. Billing and administration is a bigger pain point than ever for healthcare consumers. A study of 1,500 U.S. adults by my company found that 84% are worried about paying their medical bills in the next year, and one in ten simply won’t pay if they don’t understand the administrative process. The patient financial experience can be fragmented, complex, confusing and cold — but fortunately for healthcare leaders, there is a wealth of technology available today designed to meet the needs of modern consumers.

With the line between healthtech and fintech increasingly blurring, it’s high time for the healthcare industry to find ways to deliver a better consumer experience. By looking holistically at the patient journey and eliminating all sources of friction, forward-thinking leaders can revolutionize healthcare experiences from the first point of contact to final payment. 

Transparent and empathic healthcare fintech benefits everyone.

When it comes to paying bills, healthcare is unique. You receive a service without knowing the cost; then a month later, an indecipherable bill arrives. In every other field, this would be unacceptable — for good reason. 

Healthcare consumers want convenience, the ability to plan and a reasonable price, ideally before they set foot in a doctor’s office. While we often point to rising deductibles and increasing out-of-pocket costs as the primary driver of underpayment, the opaque and manual processes of healthcare billing also play a significant role. According to a survey by U.S. Bank, nearly half of consumers said healthcare was the most difficult industry to make a payment in, with 28% saying they wished healthcare was more like the banking industry when it comes to payment types and payment options. There’s an opportunity to better enable consumers to manage their healthcare expenses by removing both price and access as barriers.

This is precisely what retail fintech companies like Affirm and AfterPay accomplished by setting up radically transparent and immensely successful lending platforms with clear, flexible and fair financing. Healthcare must offer the same kinds of options, given the skyrocketing portion of care costs placed on consumers. Moreover, demand is clear: 74% of patients say they would use creative payment plans or financing options for large bill amounts, if available.

Legislation is increasingly mandating medical billing transparency, but current solutions still require patients to be proactive. Payers and providers must act now to provide the intuitive tech experiences that consumers have come to expect. The fact that 28% of consumers switched or stopped going to a healthcare provider in 2020 because of a poor digital experience (a 40% increase from 2019) shows how high the stakes are.

From navigating care to navigating finances.

Best-in-class technology not only delights patients but also benefits the bottom line for both payers and providers, especially if they collaborate. They can automate labor-intensive processes like prior authorization and offer more self-service help centers that relieve stress on call centers. 

In care delivery, better navigation around making appointments, sharing records and finding the right care option would lead to better outcomes. The same idea applies to healthcare finance. Patients often don’t have relevant information when they need it, caught between payers and providers. Adding health care plan data to financial navigation would reduce friction for patients so they could focus on their health.

Platforms offered by consumer fintech companies like Betterment and Mint provide inspirational blueprints that healthcare can follow. These platforms enable users to see all their finances in one place with actionable insights surfaced at the right time and place.

The future is here.

In 2021, fintech’s innovation and growth have made effortless digital transactions the norm for billions of people. We’re now at a sea-change moment that could lead to healthcare adopting these same norms.

Consumer demands, regulatory forces and technological opportunities have the potential to usher in a new era in healthcare. Up until now, payers, providers and consumers have traditionally occupied disparate — if not adversarial — roles. But fintech can help bridge the gap, opening up unprecedented collaboration with mutual benefits. 

We’re immensely excited by the opportunities presented not only by fintech but also user-friendly techniques in adtech, AI, data science and more. This convergence has the potential to usher in a new phase in healthcare — one that completely transforms the consumer experience of healthcare and consigns the era of friction and administrative waste to history.

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