As COVID-19 ravages the country, hospitals stand on the brink of financial ruin and more patients are going bankrupt from out-of-pocket healthcare costs. But a new healthcare fintech startup has a solution: PayZen pays hospitals upfront for patient invoices and offers patients zero-interest, fee-free payment plans. The PayZen platform is expected to increase collections for hospitals by 50 per cent, while making healthcare more affordable for patients.
Coming out of stealth with more than $5 million in seed financing, PayZen was incubated with Viola Ventures in 2019, with more recent investments coming from Picus Capital, TWO39 Ventures, and others.
PayZen just made deals with RMS, a Revenue Cycle Management vendor, and Vim, a digital health company that connects payers to providers at the point of care. The partnerships have allowed PayZen to successfully deploy the AI-backed technology platform across a number of healthcare providers, reaching hundreds of hospital systems and thousands of patients across the country. The company is receiving strong demand as it enrols patients who haven’t been able to pay their medical bills and gears up for expanded partnerships across the country.
“PayZen addresses a decades-long problem of hospital bills going unpaid due to patients’ inability to pay large lump sum medical invoices,” said PayZen CEO and co-founder, Itzik Cohen. “We’ve created a business model that does well and good, addressing the challenges experienced both by patients and hospitals when it comes to out-of-pocket expenses.”
Currently, hospitals average payments of just fifteen to thirty cents on the dollar, but once a patient enrols in the PayZen program, healthcare providers are paid immediately, without recourse.
PayZen’s model is the first of its kind, applying an embedded finance approach to healthcare to determine a patient’s unique ability to pay. The digital platform easily integrates into any hospital system and makes the application seamless for both patients and hospital administrators. 100 per cent of patients are approved, offered a zero per cent interest payment plan, are never charged fees, and can change their payment schedule online at any time.
“We are excited to be working with PayZen to offer these innovative and flexible payment plans to patients,” said Scott Thomas, CEO at RMS. “This business model takes the payment burden off of patients and the collection burden off of hospitals, so patients can focus on recovery and hospitals can focus on treating patients.”
By leveraging PayZen’s unique digital patient experience, hospitals can increase collection by 50 per cent while reducing the significant expense and resources currently being spent to collect outstanding invoices.
“The COVID-19 pandemic has exacerbated long-standing financial hurdles for providers,” said Oron Afek, CEO at Vim. “We are excited to partner with a company that is offering hope for progress on this critical problem for providers and the patients they serve.”
Founded with strong early support from investors, PayZen has secured more than $200 million in debt financing commitments from capital providers.
“We believe vertically embedded fintech solutions will impact many industries which led us to take an integral part in PayZen’s incubation,” said Omry Ben David, General Partner at Viola Ventures. “The $3.7 trillion U.S. healthcare industry is ripe to be disrupted with affordable, transparent, and inclusive patient payment plans, driven by data and AI, offering a real win-win for providers and patients, with no fine print.”