The cost of healthcare in the US has been rising rapidly, but the portion of those costs footed by patients has increased even faster. In 2004, fees paid by patients accounted for only 5% of hospitals’ and doctors’ revenue, but by 2017, those fees made up 35% of revenue.
This trend inevitably led millions of US citizens to accumulate significant medical debt, which now totals at least USD 220 billion, according to estimates by independent health policy research firm, KFF.
A 5-year-old startup, PayZen, aims to make healthcare more affordable by enabling patients to pay their bills in interest and fee-free instalments over time. The company’s product, which it’s branded as ‘Care Now, Pay Later,’ has had strong traction with consumers — PayZen claims that revenue has expanded sixfold in 2022 and 2023 respectively.
That strong growth recently helped PayZen close a USD 32 million Series B, led by NEA, that also saw participation from existing backers, including 7WireVentures, Signal Fire, and Viola Ventures. In conjunction with the equity round, the company secured a new USD 200 million warehouse credit facility from Viola Credit and a syndicate of insurance companies. The round values the company upward of USD 200 million.
According to company officials, PayZen is the only fintech company offering medical loans that are integrated directly into patients’ medical record portals, such as Epic’s MyChart. Its competitors, including incumbents like ClearBalance and Access One, still rely on call centres operated by people.
PayZen works with over 60 health systems and large physician groups like Pennsylvania’s Geisinger and multi-state Common Spirit, who make the startup’s product available to all patients who receive care from them.
Besides offering post-care loans, PayZen introduced a pre-care card. Their team realised that a lot of people are being required to pay a deposit before they schedule procedures. The company also uses its data and AI to help health systems determine which patients qualify for government financial assistance.
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