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A $1,300 ambulance ride, not covered by insurance. A single vial of a life-saving drug with a price tag of more than $21,000. A $30,000 bill for a first-time mother giving birth and spending three days in the hospital.

These types of stories are more common than not in the American healthcare system: even with “good” insurance, the financial burden placed on patients is creating a mountain of medical debt. And these ballooning costs get passed onto providers. When patients can’t pay their bills, providers who are just doing their jobs are left holding the bag.

Major steps need to be taken to offer patients and providers a simple way of paying for healthcare. At PayZen, we believe the answer is a platform-based approach to healthcare affordability; an approach that gives patients manageable, interest-free payments through AI-powered fintech. In this article, I’ll explain why a platform approach is so important, and why now is the time for its large-scale adoption.

Patients are Increasingly Feeling the High Cost of Healthcare

While the healthcare affordability crisis has always been an issue, the increasingly high cost of healthcare is being passed on to patients, 60 percent of whom don’t have rainy-day savings to afford a $1,000 emergency. When you consider that out-of-pocket costs now average an estimated $1,650 and rising, the magnitude of the problem snaps into focus.

Over the years, the conditions of the healthcare system have pushed the burdens of these costs onto patients in not always obvious ways. Coinsurance rates have gone up, and plans that patients can actually afford are saddled with high deductibles. Patient out-of-pocket spending grew by 10 percent from 2020 to 2021 and is expected to grow by another nearly 10 percent by 2026. The result is patients struggling to cover what they owe for care after insurance and incurring significant debt. In fact, half of Americans now carry some medical debt.

When faced with the options of seeing a doctor and accruing debt or avoiding care altogether, too many patients will choose the latter, which leads to a sicker population suffering from preventable conditions. By not addressing the healthcare affordability crisis, we’re deterring patients from seeking medical treatment until it’s too late.

Providers are Also Feeling the Pain

Because much of the high cost of healthcare is pushed onto patients who increasingly can’t afford treatment, providers aren’t being paid for the services they offer. In reality, most providers end up collecting between just 25 to 40 cents on the dollar after insurance for services they provide. 

With depleting resources as the cost of healthcare rises—further exacerbated by pandemic conditions—providers are fighting to keep their margins viable, particularly in rural and remote areas. As cash-strapped providers struggle with their own revenue concerns, they’re not in a viable position to provide financial services for their patients; they can’t afford to offer in-house payment plans, effectively acting as a bank as well as a healthcare provider. Third party vendor programs typically result in a poor patient experience that can include paperwork, hidden fees, or collection actions, with additional workload for staff and often financial uncertainty.

Why a Healthcare Affordability Platform is Such a Crucial Investment

We’re in a perfect storm of imperatives to address healthcare affordability. Thankfully, at the same time, fintech and state-of-the-art data tools have emerged to help us tackle this issue.

A healthcare affordability platform is a purpose-built solution for payment management that leverages AI, automation, and machine learning to create an intuitive digital enrollment and account management system. There are many core components to a healthcare affordability platform, and to truly understand why it’s a critical investment for both providers and patients, it’s important to highlight what defines the platform and how it’s designed to impact affordability. 

  • Ease of Implementation: For providers, a healthcare affordability platform integrates easily into existing systems or operates seamlessly alongside them. There’s no need to invest heavily in IT or overhaul billing infrastructures to accommodate the platform, so providers can take advantage of the platform without technical or financial barriers. Top solutions bring affordable payment options into the billing cycle with no upfront provider cost. 
  • Powered by Data Science: Another hallmark of a healthcare affordability platform is the leveraging of AI and ML to increase enrollment and streamline the underwriting process. The best solutions individualize payment options to each patient and provide the underwriting to determine what a patient can afford. 
  • Automation: The platform then automates enrollment for 100% of patients and takes on servicing of payment plans, which frees up provider staff to focus on other high-level initiatives. Ideally the platform will have a non-recourse structure so all credit-related loss will be borne by the platform, not providers. 
  • Digital Payment Tools: As the digital transformation has continued to impact every facet of our lives, these changes also need to be reflected in healthcare payment systems. Consumers demand easy enrollment right from their mobile devices without paper applications, credit checks, and exhaustive bureaucratic hoops to jump through. A healthcare affordability platform meets the needs of the consumer through intuitive enrollment processes that can be completed in a matter of minutes with transparent payment options, and the ability to manage their plans—payment date adjustments, updated payment methods, payment holiday requests, et al—from a simple online platform. 
  • Flexible and Affordable for Patients: The benefits shouldn’t be limited to providers. The integration of AI and ML works for patients by tailoring financing for each individual patient based on their unique financial circumstances. By evaluating each patient’s ability to pay, a healthcare affordability platform is able to customize plans to best accommodate the patient. The platform should also work at any point in the care cycle: before care, during routine visits, or after insurance.

The time is now for an answer to healthcare affordability. Implementing an AI-driven platform that can personalize payment plans for everyone is a major step in tackling this crisis in a way that benefits patients, providers, and everyone affected by the high cost of healthcare.

Ariel Rosenthal

CTO of PayZen, Tech leader, Serial Entrepreneur, Built and Scaled Financial Systems

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