Hello everyone, hope you all enjoyed your turkey and stuffing, or whatever meal your tradition calls for over Thanksgiving. This newsletter took a little break on the assumption that you weren't going to be very interested in what we had to say while enjoying quality time with family and friends. But we're back, and we've said this before and we'll say it again - we very much appreciate the kind words many of you have shared about this newsletter. As you suspect, it does take time to put all this together. So your readership, feedback, and encouragement definitely help us to keep on truckin'!
This issue's focus is real time payments and healthcare. This is a topic that will be coming up again and again, as this new payment type asserts itself for more users and payment cases - and even finds the U.S. Federal Reserve exhibiting at Money 20/20 for two years running! We also cover some deal news, new data on the unbanked and underbanked, lots of reading material including a fireside chat with Judy Faulkner, and a link to our latest CEO Chat with Dash Solutions' Stephen Faust. Let's jump in!
DEAL NEWS
CompuGroup Medical to be taken private for $1.2 billion
CVC Capital Partners has made a bid for CompuGroup Medical's shares (listed on the Frankfurt Stock Exchange) at a 51% premium, to take the company private at a valuation of 1.14 billion euros ($1.2 billion). CompuGroup Medical, based in Germany with U.S. headquarters in Austin, TX has acquired U.S. health IT brands such as APRIMA (it's leading solution, an EHR and practice management system) and EMDS, and also offers eMEDIX (reimbursement solutions) and ARIA (RCM services).
Bluespine raises seed round for AI-based claims cost reduction
New York-based Bluespine has closed $7.2 million in seed funding, led by Team8. Bluespine is building an AI-based claims review platform to help employers identify overbilling by scrutinizing plan documents and billing guidelines. The goal is to hone in on each employer's unique plan design using AI tools and give self-insured employers the information to identify and recover overbilled claims. News articles report that Bluespine has contracts with large employers including Mattel (33,000 employees).
Stretch Dollar raises $6 million in additional seed money
San Francisco and Pittsburgh-based Stretch Dollar announced that it has raised an additional $6 million to continue building its ICHRA employee benefits platform. The round was led by Fika Ventures and Oscar Health, with participation from Precursor Ventures and Springbank which led the last round. The company claims to be able to reduce 100+ hours of employee benefits set up to 10 minutes, and is one of the newest entrants in the fast growing ICHRA market.
Drive Capital raises $4 million for startup Cofactor AI
Led by Drive Capital, Chicago-based Cofactor AI recently closed a $4 million seed funding round. Cofactor describes itself as "using the power of AI to help providers recover lost revenue by automating the complex appeals process for insurance denials". According to the American Hospital Association denials are up 20.2% in 2023. Cofactor is essentially fighting AI with AI, since it believes that many of these denials are triggered by AI and are often wrong.
CFPB effort to cap credit card late fees loses again in court
After the Consumer Financial Protection Bureau’s constitutionality was reaffirmed by the U.S. Supreme Court in June 2024, it seemed that the CFPB’s effort to cap credit card late fees at $8 might finally get back on track. Unfortunately, the combination of a Trump win, and most recently a judge’s refusal to lift an injunction blocking the late fee cap from going into effect, probably spell the end for one of the CFPB’s most prized rules.
A Texas federal judge ruled the preliminary injunction will stay in place, and the case will stay in Texas instead of moving to Washington, D.C. as the CFPB had requested. In an earlier ruling, the same judge ruled that the plaintiffs – led by the U.S. Chamber of Commerce and including several banking organizations – were likely to succeed on the merits of their case when he issued the preliminary injunction. Given the changing administration in Washington and the fact that current CFPB Director Rohit Chopra will be replaced soon after January 20, the credit card late fee cap is almost certainly dead on arrival.
How will accelerated payments impact U.S. healthcare providers?
Source: theclearinghouse.org/payment-systems/rtp
As faster commercial payment standards Same Day ACH, Real-Time Payments (RTP), and FedNow gain traction, is the U.S. healthcare industry on the brink of a financial revolution? Or will it maintain its traditional “late adopter” posture towards payments and pursue a more deliberate course?
The development of Same Day ACH, RTP, and FedNow was driven by the need for faster and more efficient payment processing. All three of these innovations are addressing the demand for speed in financial transactions, and enabling same-day or near-instantaneous settlement of funds. Same Day ACH, for instance, enhances the traditional ACH network by allowing credit and debit transactions to be processed multiple times a day, compressing the typical 2–3-day settlement period to the same business day.
These innovations better meet consumer and business expectations for quicker payments and position financial institutions to remain competitive in a rapidly evolving payments landscape. Cryptocurrencies and blockchain, Peer to Peer platforms such as Square and Venmo, and payment platforms including Adyen, Stripe and PayPal are all threatening traditional banking channels.
Let's take a look at why faster payments are important for health systems and other providers, and have the potential to reshape the way healthcare organizations execute financial transactions.
Why faster payments matter
In the healthcare sector, time is money—literally. Traditional payment methods often involve lengthy processing times, which can lead to cashflow bottlenecks. This is where faster payment systems come into play:
Same Day ACH: Allows for transactions to be completed within the same day, reducing wait times significantly. Only available on business days. $1M transaction limit.
Real-Time Payments (RTP): Enables immediate transfer of funds between banks, ensuring that payments are processed instantly, available 24/7. $1M transaction limit (increasing to $10M on 2/9/2025).
FedNow: A real-time payment service developed by the Fed to facilitate instant fund transfers. Also available 24/7. $500K transaction limit.
Like previous payment technologies adopted by large enterprises, the benefits cannot be only about speed; they need to also be about efficiency and reliability. By adopting these technologies, healthcare providers can reduce administrative burdens and focus more on patient care rather than paperwork. One of the strongest initial use cases of accelerated payments has been reducing employee payroll cycle time. In an era where healthcare workers are scarce and in high demand, improving the payroll experience affecting these employees could be a catalyst for adoption of faster payments in the healthcare industry.
Implications for health systems and providers
Improved Cash Flow Management: Faster payments mean that health systems can maintain better control over their cash flow. This is particularly beneficial in managing day-to-day operations and unexpected expenses. With quicker access to funds, providers can invest in new technologies or expand services without waiting for payments to clear.
Enhanced Vendor Relationships: Healthcare providers often work with a multitude of vendors—from medical supply companies to IT service providers. Faster payment systems ensure that these vendors are paid promptly, fostering better relationships and potentially leading to more favorable terms or discounts. After all, who wouldn't want to be on good terms with the folks supplying your life-saving equipment?
Streamlined Revenue Cycles: By reducing the time between service delivery and payment receipt, health systems can streamline their revenue cycles. This not only improves financial stability but also allows for more accurate financial forecasting. Obviously, U.S. providers need their primary counterparty— U.S. private and public insurers— to be adopters of these payment innovations to realize improved cash flow and fewer days in account receivables (DAR). It remains a question how quickly payers will use any of this innovation to pay medical claims. Float has traditionally been their friend.
Challenges and considerations
While the benefits are clear, transitioning to faster payment systems isn't without its challenges.
Technology Integration: Implementing new payment systems requires significant IT infrastructure changes. Health systems must ensure their current systems can support these new technologies without compromising security or compliance.
Training and Adoption: Staff will need training to adapt to new processes and tools. This includes understanding how these systems work and how to troubleshoot any issues that may arise.
Cost Implications: While faster payments can save money in the long-run, there may be initial costs associated with upgrading systems and training staff. Each of these technologies for faster payments also have their own transactional costs charged by the bank for payment processing.
The future of healthcare payments
U.S. hospitals, health systems and other healthcare providers stand to gain significantly from adopting faster payment networks like RTP, FedNow, and Same Day ACH. These systems not only improve financial operations but also enhance relationships with both vendors and patients. While there are challenges in transitioning to these new technologies, the long-term benefits make them a worthwhile investment for the healthcare industry. Faster payments are set to transform the healthcare landscape, making it more efficient, transparent, and ultimately more patient-centric. So buckle up—the fast lane is coming!
Unbanked U.S. households declines to record low in 2023
According to new data from the Federal Deposit Insurance Corp.'s biennial National Survey of Unbanked and Underbanked Households, the 5.6 million underbanked U.S. households represents the lowest percentage (at 4.2%) since the survey began in 2009 ("underbanked" households are those without a bank or credit union account). The highest number recorded was in 2011, when it hit 8.2%.
The FDIC survey reported that 19.0 million (14.2% of U.S. households) were underbanked in 2023, meaning they had a bank or credit union account but primarily used nonbank products and services.
Source: 2023 FDIC National Survey of Unbanked and Underbanked Households
The same study also showed that underbanked U.S. households are more likely to hold cryptocurrencies than those utilizing traditional bank services (see chart).
Unbanked and underbanked consumers often use cash instead of credit/ debit cards or checks for everyday payments. According to the Fed's 2023 diary study, this could be as many as 19% of consumers making a retail purchase. FinMed Partners recently helped launch a retail cash-in solution for medical bill payment. This will increase the ability of cash-paying patients to pay all or a portion of medical bill balances due at the largest U.S. retail cash-in network. Contact us at info@finmedpartners.com if you would like to review cash preference data from a survey of 2,000 consumers, and learn more about increasing patient collections yield by adding retail cash-in to your patient payment options.
CEO CHAT
Stephen Faust, CEO, Dash Solutions
Click here to read our latest CEO Chat with Stephen Faust, CEO of Birmingham, AL-based Dash Solutions.
AI IN HEALTHCARE
Harnessing AI to reshape consumer experiences in healthcare. AI-powered solutions can unlock insights from previously inaccessible data and enable consumer engagement and personalization at an unprecedented scale, in turn lifting healthcare business outcomes. (McKinsey)
WHAT WE'RE WATCHING
Fireside chat with Epic's Judy Faulkner at Glaser Society awards, held at the McWilliams School of Biomedical Informatics at UTHealth Houston. Judy Faulkner received the John P. Glaser Health Informatics Innovator Award. Big thanks to the HISTalk blog for surfacing this video. Check in at 25:50 mark for discussion with Ivo Nelson, John Glaser, and Judy Faulkner.
Live from Las Vegas: Download from Money 20/20. Review of topics covered including open banking, cash flow underwriting, battle over cards vs digital wallet, secured credit cards, agenic workflows, overconcentration of fintechs in certain areas, and FedNow’s booth. (Alex Johnson of Fintech Takes)
Wallet Wars: The Battle for Your Digital Life. Digital Identity is about to reshape finance. While everyone's watching AI, the biggest tech companies are quietly fighting for control of your digital identity. (Simon Taylor of Fintech Brainfood)
ADDITIONAL RESOURCES
Deal Tracker. Regularly updated list of healthcare payments related transactions since November 2023.
Conference List. Rolling twelve month look ahead at conferences and other events covering healthcare payments, revenue cycle, fintech and related areas. Updated through September 2025.
CEO Chat. Thoughts from healthcare payments CEOs on the problem their company was founded to solve, their right to win, and plans for the next 12 months.
Newsletter Archive. News, trends, and insights from the healthcare payments industry compiled in our bi-weekly newsletter. Last six months of newsletters.
Epic MyChart. Excel sheet with full listing of all Epic MyChart instances as of May 2024, categorized by state, provider type and specialty.
All of these resources can also be accessed at the FinMed Partners Insights page.
NEXT ISSUE: JANUARY 8, 2025
We'll see you in early January with a deeper POV on AI in Healthcare and healthcare banking. Until then, enjoy the holidays and Happy New Year!
Thank you for reading! If you enjoyed this newsletter, please forward to a friend or colleague.
FinMed Partners is a management consulting and advisory business focusing at the intersection of payments/ fintech and healthcare. Our founders have developed deep expertise from decades of experience with health IT companies, healthcare providers and many players within the payments ecosystem. Investors, boards and executive teams work with us to maximize business value through strategic input and tactical execution.
FinMed Partners LLC, 34 Long Avenue, Belmont, MA 02478, United States
