As we continue to evolve our newsletter (thanks for the feedback!), we are excited to introduce a new feature we're calling "CEO Chat". Once a month we will include a CEO or senior leader of a healthcare payments company describing the problem the company was founded to solve, what makes it different and better than other solutions, and what's ahead for the company. Read more below from Tom Furr, CEO of PatientPay, who kindly agreed to help us kick off this new feature. (Send us a note to info@finmedpartners.com if you'd like to be included in a future CEO Chat.)
This issue also covers a major BNPL player moving into healthcare, the multitude of startups drawn to rapidly rising patient out of pocket costs, the CFPB's latest study on medical debt, new data on the shrinking number of independent physicians, Doxo in legal trouble, AI in healthcare, and another new feature - What We're Reading.
CEO CHAT
Tom Furr, CEO/ Founder, PatientPay
While we cover all types of companies related to healthcare payments, it's the smaller ones that always intrigue us the most with their innovation and potential for disrupting the status quo. In any industry, it is hard to wrest leadership from the big incumbents. Especially in healthcare, real change takes real patience. So we applaud new healthcare entrants and their leadership, and are delighted to launch a new feature introducing this leadership and their companies to you.
Once a month, "CEO Chat" will bring you answers to three questions from a different healthcare payments executive:
What problem was your company founded to solve?
How do you describe your company's right to win in your market?
What are your key goals and definition of success in the next 12 months?
Tom Furr founded Durham, NC-based PatientPay to help medical groups collect more money, faster, at a lower cost. Read Tom's take on our three questions here.
NEW ENTRANTS
Patient out of pocket spending attracts new entrants
Crunchbase recently wrote about investors and founders seeing opportunity with the large out of pocket amounts that consumers are spending on healthcare. The article suggests themes have emerged around access, price transparency and alternative plans. This includes applications to make it easier to use HSAs and manage self-pay transactions, and growing interest in Individual Coverage Health Reimbursement Arrangements (ICHRAs). Crunchbase included a list of 19 companies that are "innovating around the rise of out-of-pocket health spending" and which have "raised more than a half-billion dollars to date".
Buy Now Pay Later financing company Affirm (NASDAQ: AFRM) is quietly moving into healthcare. An Affirm executive told Reuters that it has significantly grown its network of elective medical locations to 130 at the end of last year, with price points being financed typically $2,000 and above. Electives targeted by Affirm (cosmetic, dental, medical devices and veterinary) overlap directly with the focus areas of financing incumbents such as CareCredit.
CFPB publishes updated data on consumer medical debt
The Consumer Financial Protection Bureau (CFPB) released the results of an updated review of consumer medical debt. This follows up on the original CFPB study from March 2022, which helped prompt the leading credit reporting companies to change their treatment of medical debt. Experian, Equifax and TransUnion agreed to increase the time before medical bills in collections can appear on credit reports (from 180 days to one year), stop reporting medical bills that had been in collections but were resolved, and remove medical bills below $500 from credit reports.
The new CFPB analysis found that unpaid medical bills on credit reports dropped from $88 billion in March 2022 (held by about 14% of consumers) to $49 billion (5% of consumers) as of June 2023. Not surprisingly - given that credit bureaus removed medical bills below $500 - the average medical balance on credit reports increased from $2,000 to over $3,100.
78% of physicians now part of health system/ corporate entity
Thanks to RevCycle Intelligence for surfacing a new report looking at the extent to which physicians have shifted from private practice to health system/ corporate ownership. The Physician Advocacy Institute (PAI) and Avalere Health have been conducting a multi-year study on this topic, and recently added 2022 and 2023 findings to their dataset.
Employed physicians grew by 5.1% from 2022-2023
77.6% of physicians are now employees of hospitals/ health systems and other corporate entities
Click here for summary and to download full report
REGULATORY
Doxo bill pay service in FTC's crosshairs
According to PYMNTS, "the Federal Trade Commission sued Seattle-based bill-pay firm Doxo, alleging the company and two of its co-founders, Steve Shivers and Roger Parks, engaged in deceptive business practices to mislead consumers about the junk fees they charged to customers...In the FTC’s complaint, the agency alleged that Doxo’s behavior violated the FTC Act, the Restore Online Shoppers’ Confidence Act and the Gramm-Leach-Billey Act. Its commission voted unanimously to file the complaint, which it later filed in the U.S. District Court for the Western District of Washington." Doxo denies the allegations and asserts that the FTC does not understand its services nor its work to meet regulatory requirements.
Doxo's website counts 33,119 health billers in the last 90 days, dominated by health insurers but also including Synchrony Financial's (NYSE: SYF) CareCredit product.
RCM outsourcing capabilities and long-term potential of AI
Ensemble Health Partners, a leading RCM outsourcing company, is working with Microsoft to improve the capabilities of its EIQ revenue cycle intelligence platform. According to Ensemble’s press release, “The firm’s top generative AI priorities are improving the speed and efficiency of denial resolution, including generating tailored appeal letters in seconds, as well as accelerating cash collections and improving overall yield with dynamic account prioritization, routing and automation.”
We will be at the upcoming HFMA annual meeting in Las Vegas from June 24 - 26. If you plan to attend, we would love to say hello - please drop us a line at info@finmedpartners.com!
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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, an affiliate of PayGility Advisors, 100 Theodore Fremd Ave., #b1c, Rye, NY 10580-2875, United States
