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The company prepays patient medical bills, and then offers them zero-interest payment plans
Healthcare has become increasingly unaffordable as costs continue to rise: health spending in the U.S. increased by 9.7% in 2020 to $4.1 trillion or $12,530 per capital, compared to 4.3% in 2019. But people still need care, so that means ten of millions go into medical debt, causing them to file for bankruptcy. It's an untenable situation.
PayZen's solution to this problem is to allow patients to pay off their debt in installments, rather than all at once. The company pays hospitals upfront for patient invoices and then offers the patients zero-interest, fee-free payment plans.
On Tuesday, the company announced a $220 million growth round made up of $20 million in equity financing, led by 7wireVentures, along with SignalFire, Link Ventures and Picus Capital, along with a $200 million credit facility provided by Viola Credit. This is PayZen's first funding since its $15 million Series A in November of last year.
As part of this funding round, Lee Shapiro, co-founder and managing partner at 7wireVentures has joined the Board of Directors at PayZen.
Launched in early 2021, PayZen offers patients a healthcare payment card they can use at any time for any health related expense, which is accepted anywhere debit cards are used; they can be used at any stage of care, from pre-procedure to post-procedure. Payment plans are 100% free for everyone, and have no service fees, no late charges, and never any interest on payments.
The company uses using financial technology, AI, and machine learning to generate healthcare payment plans tailored to each individual's budget and circumstances.
The advantage for providers for using PayZen is that they are more likely to get paid: the company says its customers, which includes Geisinger, see a 50% increase in their collections rate thanks to its predictive modeling power. PayZen is able to automatically offer its payment option to the right patients at the right time and using the right engagement channel, fully automating the process.
PayZen has deals with RMS, a Revenue Cycle Management vendor, and Vim, a digital health company that connects payers to providers at the point of care, which have allowed the company to partner with hundreds of hospital systems and thousands of patients.
Since its last funding round, PayZen has doubled its revenue every month and now it plans to use the new funding to scale its operations and product development.
“This exciting round is a testament to PayZen’s product innovation and the immense need for more affordable payment options for patients who are trying to pay their medical bills,” Itzik Cohen, co-founder and CEO at PayZen, said in a statement.
“Healthcare equity and affordability is a foundational problem in the U.S. Too many Americans have delayed or foregone getting the care they need because they aren’t offered an affordable way to pay. At PayZen, we’re determined to help fix this broken system.”
(Image source: payzen.com)
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