Payzen impact in Healthcare
Healthcare expenses in the United States have skyrocketed, with patients bearing an even greater burden of these rising costs. Over the course of two decades, hospitals and doctors have seen a significant increase in the proportion of revenue from patient fees. Back in the day, it accounted for a mere 5%, but by 2017, it had risen to a substantial 35%.
Independent health policy research firm KFF reported that millions of U.S. citizens are struggling with substantial medical debt, which has reached a staggering total of at least $220 billion.
Addressing the growing problem of mounting debt is a complex challenge, but PayZen, a young company with five years of experience, is determined to make healthcare more accessible. Their innovative approach allows patients to conveniently pay their medical bills in installments without any additional interest or fees.
The company’s product, marketed as “care now, pay later,” has gained significant popularity among consumers. PayZen proudly reports a remarkable six-fold increase in revenue over the past two years.
PayZen’s recent impressive growth played a significant role in securing a substantial $32 million Series B funding round. NEA led the round, with participation from existing investors including 7WireVentures, Signal Fire, and Viola Ventures. As part of the equity round, the company successfully obtained a $200 million warehouse credit facility from Viola Credit and a group of insurance companies.
A source familiar with the deal values the company at over $200 million in this round of funding.
Healthcare systems also appear to benefit from this arrangement. “Providers who partner with PayZen experience a significant boost in their collections rate,” stated Itzik Cohen, the founder of PayZen.
While PayZen has seen success in recent years, Cohen acknowledges that persuading healthcare providers to adopt a “buy now, pay later” product was initially a difficult task.
“It was quite surprising to me that the majority of BNPL providers failed to recognize this enormous market as a potential opportunity,” Cohen shared withEltrys. Once I delved into the subject, I quickly grasped the reasons behind it. The market is quite intricate. It’s different from e-commerce.
It can be quite challenging to sell technology to healthcare systems.
In addition to PayZen, numerous startups have attempted to provide “care now, pay later” services. However, according to Cohen, many of these competitors, such as Walnut, have shifted their focus away from offering interest-free loans to patients.
As per Cohen’s findings, PayZen stands out as the sole fintech company that provides medical loans seamlessly integrated into patients’ medical record portals, including Epic’s MyChart. Its competitors, such as Clear Balance and Access One, continue to depend on call centers staffed by human operators. That’s the reason Cohen doesn’t see them as direct competitors.
“Providers are seeking a comprehensive solution,” Cohen stated. It seems like everyone is making the switch to Epic. Our integration into Epic offers us a significant advantage.
PayZen has established partnerships with more than 60 health systems and prominent physician groups, such as Geisinger in Pennsylvania and Common Spirit in multiple states. These reputable organizations have made PayZen’s product available to all of their patients.
In addition to providing post-care loans, PayZen has recently launched a pre-care card. Cohen noted that a growing number of individuals are now required to make a deposit before scheduling their medical procedures. The company leverages its data and AI capabilities to assist health systems in identifying eligible patients for government financial assistance.
Cohen highlighted the valuable impact of PayZen on society, stating, “Our mission attracts individuals who are eager to join us.” Every night, we rest with the satisfaction of knowing that our work is positively influencing the world.
