The Role of FinTech in Healthcare: In-Depth Overview
- 22 Nov 2023
- 7 min
Are you a serial entrepreneur, investor, or startup founder that wants to create a solution for the healthcare sector? Or are you just curious about FinTech’s impact on healthcare?
Read this article if you gave a favorable answer to any of those questions.
Here are things you’ll learn from this article:
- The role of FinTech in healthcare
- The best FinTech startups revolutionizing healthcare
- What to learn from the most successful FinTech startups
- And more!
Let’s dive right into the crux of this article.
The Role of FinTech in Healthcare
According to the World Health Organization, the cost of seeking healthcare expenses has driven over 100 million people into poverty.
However, FinTech is actively solving this problem by broadening financial access to reduce complex transaction costs and expedite payment processes.
Let’s elucidate further on three use cases of FinTech in healthcare.
Use Case 1: Health Lending
Healthcare lending entails getting funds for medical resources on credit. This lending program helps to cover payments for dental care, physician care, and other personal medical services.
Albeit, FinTech for health is still nascent. Health lending by the financial technology service industry is experiencing astronomical growth. A statistic giving credence to the importance of this tech innovation is that over 50% of US citizens use healthcare loans. And since tech lending makes accessing credit seamless, it’s safe to assume that startups venturing into this niche will make astronomical profits.
Examples of Startups in Healthcare Lending
Numerous tech startups issue loans for healthcare seekers in short of funds. Amongst the gamut of service providers, the most notable ones include:
- Arogya Finance
Let’s consider another popular use case: health wallet.
Use Case 2: Health Wallet
This is a digital wallet account created by FinTech to save up funds for health services. In the United States, health wallet savings are tax-advantaged to individuals enrolled in high deductible health plans.
While this concept is popular in many western nations, it’s still relatively non-existent in most developing nations. A statistic by the American Economic Association shows over 60% of child mortality in developing countries can be prevented if families invest in preventive medicine.
Since health wallets help provide a means for saving towards both preventive and curative medicine, FinTech health wallets can help eliminate the problem.
Examples of Startups with Health Wallet
Some examples of tech startups championing the use of health wallets include
- Bend Financial
Use Case 3: Improved Access to Health Care
Access to healthcare means having a timely use of personal health services to achieve the desired health outcome. Quick healthcare payment is imperative to achieve this goal, and FinTech has been championing that through important innovations.
As it currently stands, about 50% of the world population still lacks access to essential health care services. But experts believe that with the right synergy between FinTech and medicine, that number will reduce significantly with time.
Albeit much needs to be done, FinTech companies are currently making significant strides. How?
FinTech introduces new and improved digital service models to healthcare. FinTech companies are leveraging blockchain, artificial intelligence, and machine learning to eliminate gaps in the current healthcare system.
Procedures that require complex payment schemes and operations are easily accessible, and all indices show that things will keep improving in the future.
For example, FinTech, through assistive technology, has made health payments easily accessible to the disabled. Also, FinTech schemes that improve financial inclusion for the unbanked are improving the savings culture of users towards preventive medicine.
Examples of Startups Improving Access to Healthcare
Now that we’ve discussed some use cases of FinTech impacting the health sector. Let’s discuss some startups impacting the health sector.
Overview of the 5 FinTech Healthcare Startups Worth Learning From in 2022
The Covid-19 pandemic revealed a lot of inefficiencies in the health system. Due to these, private companies are beginning to champion a wide range of health-centric innovations.
These change champions are responsible for introducing certain benefits, such as better customer engagement, price transparency, patient financing, a fast payment system, etc.
Here’s a list of five FinTech startups introducing salient changes to healthcare:
Startup 1: SmartHealth PayCard
This financial technology service company empowers both individuals and families with resources and solutions to simplify healthcare expenses.
The financial technology company has a SmartHealth PayCard Mastercard: a credit card that provides family members with payment choices and benefits for telehealth. It also provides copays, high deductibles, medicines, mental health preventative care, and others.
The startup’s complete solution includes a cardholder website, SMS messaging, record-keeping, secure online tracking, and a credit line.
Here’s a spreadsheet depicting more details of the startup:
|Start Date||Target market||Funds Raised|
|2019||Smarthealth PayCard is intuitively designed for U.S.-based individuals and families. It helps them with financial solutions needed to simplify and improve their ability to pay for healthcare.||According to their page on CrunchBase, the platform has raised $1 Billion in seed funding.|
What to Learn from Smart health Paycard
Smarthealth’s forte is their intuitiveness in digitizing ordinary payment services. Startups willing to create a similar solution should identify a niche in their target market. Then create a sophisticated product that appeals to an identified problem.
Startup 2: Cedar Inc
Cedar is a financial technology startup that provides ways for medical groups, hospitals, and health systems to manage their patient financial ecosystem.
The solution created by this startup uses a combination of techniques in healthcare, FinTech, and ad tech to ensure providers engage patients efficiently.
The platform delivers modern intelligence to eliminate collection challenges, improve billing effectiveness, and ensure patients get an apt user experience.
|Start Date||Target Market||Funds Raised|
|2016||The startup targets hospitals, medical groups, and health systems that elevate the end-to-end patient experience.||Cedar has raised a net sum of $351 million. Their most recent funding was raised on March 9, 2021.|
What to Learn from Cedar
Through a robust platform, Cedar Pay personalizes the experience for every patient, leading to a better business-to-customer relationship and better results.
Startups that copy Cedar’s business model must first invest extensively in creating platforms that appeal to business owners and their customers.
Startup 3: WellPay
WellPay is a financial technology solution provider with the aim of building solutions that allow consumers to deal with rising healthcare costs.
WellPay recently launched the beta version of its platform to provide personalized healthcare service delivery for Covid-19 patients. It’s expected to carry out a full-scale product rollout later this year.
This FinTech platform’s crux is a machine learning algorithm that enables patients to secure and keep track of pending medical payments.
The platform then negotiates and facilitates disputes between patients and healthcare providers, if any. It also provides zero-interest rate credit to financially distressed users.
Summarily, Wellpay helps manage healthcare bills and smoothens operations between healthcare providers and patients.
Let’s help you with a spreadsheet of more valuable information about this startup:
|Start date||Target Market||Funds Raised|
|2019||This solution is targeted at healthcare providers. It helps them streamline and give accurate billing statements to patients.||The company has raised $3.8 million in seed funding.|
What to Learn from Wellpay
Wellpay understands that costs and transparency are among the biggest problems facing healthcare. Thus, through niche marketing, the company is helping healthcare providers solve that problem.
As a startup, you can learn from the problem-solving approach of Wellpay and imbibe the founders’ attitude of diligence.
Startup 4: MedXoom
Medxoom is a FinTech startup that helps organizations and employees save money on healthcare costs through pricing, payment & mobile CRM solutions. The financial technology company introduces comparative shopping, CRM, and unified billing to healthcare.
The Atlanta-based startup helps to bend healthcare costs by recommending platform members to cost-efficient medical organizations. Beyond this, it also offers users financing options, powerful payment features, an integrated net due to payment, and a payment card.
Medxoom employs a wide range of strategies to help members and employers save on health costs. Among the methods used are reference-based pricing, member steerage, direct provider contract, etc.
The FinTech organization is backed by leading venture funds TTV capital and Las Olas Venture Capital.
|Start Date||Target Market||Funds Raised|
|2018||Medxoom’s target market is mainly corporate organizations and their employees.||Medxoom has raised $11.3 million in total funding.|
What to Learn from Medxoom
Medxoom focuses on answering a specific question in the health sector: how much will it cost? They’ve stayed through to this and have provided the most suitable answers obtainable to their users. Their determination and focus once again show the efficacy of niche marketing.
Startup 5: Gem
Gem is a blockchain-centric startup that creates solutions for healthcare businesses. The company mainly focuses on helping health professionals to create a fully functional blockchain environment for data storage.
Beyond this, the platform also helps prove sensitive information without divulging its details to the inquirer.
Need to know more about Gem? Check the spreadsheet below:
|Start Date||Target Market||Funds Raised|
|2017||Gems’ target market is hospitals and other health-related institutions looking for a secure way to store patient data.||According to their Crunchbase page, the total funding amount raised by the company is $148 million.|
What to Learn From Gem?
Gem emerged on this list primarily due to the company’s management vision of creating a consumer-centric solution.
Every product the company has worked on seems to guarantee top-notch consumer data security. This consumer-centrism is partly due to the co-founder, Steven Bartel’s experience working for Dropbox.
Want to Learn More about FinTech?
As a startup investor, entrepreneur, or founder looking at creating a FinTech for a health app, then you should have in-depth knowledge of FinTech.
Beyond the multiple information you need, it’s important to know about owning your financial technology company.