How Embedded Finance Creates a Better Patient Experience

For years, there has been discussion around consumerism and the need to improve the patient financial experience, with a focus on providing consumers with the same financial options they’ve come to expect in other areas of their lives. One approach that needs more exploration is how to seamlessly embed finance into the patient financial journey. 

What is embedded finance?

EY defines embedded finance as “the integration of financial services or products, such as payments, within a nonfinancial services company’s customer value chain.” This gives companies the ability to curate a “seamless customer experience.” 

Examples of embedded finance include Uber, Amazon, and Shopify, where the ability to purchase a service and make a payment are seamlessly integrated. Many companies now leverage apps to create an embedded finance experience.

Why embedded finance into healthcare?

Integrating financial services directly into healthcare delivery makes healthcare more accessible, affordable, and convenient for patients, which can improve care plan adherence and enhance outcomes. In return, providers participating in value-based care plans can benefit from increased reimbursement and patient loyalty. Embedded finance can also generate significant improvements in revenue cycle efficiencies and self-pay collections. 

While online health and wellness platforms, telehealth service providers, and innovative retail clinics have made significant progress in implementing embedding finance, other types of healthcare providers have yet to take the steps. In an age where consumers have more options than ever about where to receive their care, improving the financial experience through embedded finance can give providers an advantage in an increasingly competitive marketplace.

Three strategies for embedding finance into the healthcare experience

The following are three strategies you can use to implement embedded finance into the healthcare experience for your patients. 

1. Introduce patient financing discussions during appointment scheduling and pre-registration. The first opportunity to engage in financial discussions with your patients is to educate them about what they will owe. However, in our heavily siloed ecosystem, finding and calculating coverage and cost can be a complex process. Patient responsibility estimation technology is an excellent option. As technology has advanced, accuracy has improved substantially. In addition to providing estimations, many clinics now offer patients the ability to store a credit card or HSA card in their patient EHR systems. Once charges are determined, patients can easily make a payment without having to input their financial information repeatedly. This lowers the provider’s collection costs and improves the patient’s financial experience. However, this approach may not work for larger balances, which leads to the next strategy.

2. Offer patient-friendly options that also increase cash flow. Using a credit card or HSA balance is suitable for lower balances. Offering a non-recourse, zero-fee, 0% fixed APR payment option — regardless of credit profile — helps ensure patients can afford the care they need when they need it. It also enables patients to get elective care they may have been putting off due to financial limitations. Patients can apply for financing through the provider’s website or at the provider office and receive a financial arrangement immediately. With a non-recourse lending partnership, providers get paid upfront by the finance company, which significantly reduces the administrative burdens that come with recourse programs where balances may be returned and certainly better than having to wait 60, 90, 120 days or more to collect using in-house payment plans. Providers can benefit from better cash flow and improvements in A/R.

3. Ensure patient financing is revisited during the checkout or discharge process. When patients check out or are discharged from your facility, their focus should be on recovery, not whether they’ll be able to pay their bills. Creating a final bill and confirming payment arrangements before they leave can alleviate this pressure and support the healing process. 

Consider Sarah, a 35-year-old freelance graphic designer who woke up one morning with severe abdominal pain. Concerned about the potential cost, she logged into her healthcare provider’s patient portal and scheduled a virtual consultation. During the video call, the physician recommended an ultrasound to rule out appendicitis. Soon after the call, Sarah received a notification in the portal with the estimated out-of-pocket cost for the procedure based on her high-deductible health plan’s coverage.

Realizing the cost was more than she could comfortably pay upfront, Sarah explored the financing options described on her provider’s payment platform. She was relieved they offered a 0% interest, extended payment option with no hard credit check required. Sarah applied for the financing option directly through the portal and was quickly approved for a reusable line of credit. This gave her the peace of mind she needed to schedule the ultrasound without delay.

At the imaging center, the procedure cost was automatically charged to Sarah’s new line of credit. After the ultrasound, Sarah could use her line of credit for the additional expenses of follow-up care without having to reapply or worry about immediate out-of-pocket costs. Over the next few months, Sarah made affordable monthly payments on her healthcare line of credit. She appreciated the flexibility and transparency of the process, which allowed her to focus on her recovery rather than stressing about medical bills.

The future of healthcare: Embedded finance and beyond

As the healthcare industry continues to evolve and new technologies and health apps become more widely available to patients, embedded finance will become a differentiator. By integrating financial services into the healthcare experience, embedded finance makes healthcare more accessible, affordable, and convenient for patients while streamlining operations and improving revenue collection for healthcare providers. 

Photo: StockFinland, Getty Images

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