This is the third in a three-part series on new financing options for insured patient self-pay accounts. Here is the first part, and here is the second part.
To varying degrees, new entrants to the patient finance game are investing in the future to help providers and patients adapt to the new reality of HDHPs and the increase in payer diversity they’ve ushered in.
For patients, these game-changing companies are working to gently land the “You really are the payer now” news, and help patients get empowered and stay in control. The intent to provide good “whole patient” care, including healthcare financial services, is made more powerful with a combination of technology, scale, partnerships and increased access.
For providers, both patient satisfaction and bottom line get stronger if patients know their obligations and have a manageable way to meet them up front--at, or preferably before--the point of service. The field is wide open and very hungry for simple practice management solutions that prevent debt, neutralize risk, and improve debt recovery operations.
Game Changer Profile: MedPut
Set to launch in summer 2017, MedPut takes an almost peerless approach to bridging the self-pay financing gap by positioning itself as part of an employer-sponsored benefits lineup. Offering small loans repayable through payroll deduction (or converted to ACH payments in the event of a job loss or change), MedPut allows borrowers to upload bills and secure loans equal to a maximum of 10% of a workers’ after-tax salary. Employers can offer MedPut alongside HSAs and other tools to help employees cope with the rising percentage of medical office revenue that must now come from patients.
How it works
MedPut funds nearly any medical expense up to a limit and works with most providers, in-network and out-of-network.
- MedPut partners with employers to agree on credit line terms and enroll/onboard employees.
- When patients incur OOP medical costs not covered by insurance, they can upload their bill to an online portal, and MedPut partners with an agency to try to negotiate a discount. This is especially valuable with out-of-network bills.
- If a discount is negotiated, patients pay MedPut the negotiated amount, plus a service fee (some portion of the discount).
- Funds are loaned at a rate usually under 5% APR, and are transferred for medical bill pay.
- MedPut and employer then work to initiate payroll deduction, which takes place over the course of one year. When one debt is repaid in full, another can be uploaded.
- If there is a job loss or change, patients can convert their loan to ACH repayment in lieu of payroll deduction.
- Employees can see savings from negotiation, view balance and make payments online.
What it adds to the healthcare finance game
- Medical financing as an employment benefit is uncommon. Most companies looking to help solve the funding gap for OOP medical expenses are not reducing risk by partnering with employers to secure payroll deduction.
- By producing a value proposition for employers who are pressed to offer only high deductible health plans, MedPut is also creating a captive patient market. As long as the employee is working, they are re-paying their medical debts almost painlessly.
Loan size & time horizon matters
- Lines of credit are usually small (less than 10% of employee’s monthly take home pay), so risk is further mitigated for MedPut.
- Duration of loan is also limited in MedPut’s model; loans must be repaid within a year’s time.
Providers, take note
Cashflow: Once the bill is approved and the loan is in place, providers are paid by MedPut, ending the risky wait that providers have had to carry for too long.
Risk shift: By shifting the risk of default to MedPut, providers are able to maintain better cashflow and healthier books.
Negotiated debt: The firm’s model calls for bill negotiation, and discounts can approach 30%. While sometimes healthcare providers aren't paid at par, MedPut still solves a collections problem.