Can Fintech Fix Healthcare Payment Processing?

By Kevin Schulman, Morgan Kiss
2022 | Case No. SM356 | Length 15 pgs.

Health care was one of the largest sectors of the U.S. economy, but administration costs accounted for a growing share of health care spending. The administrative burden for health care in the United States was far higher than in other countries—was this an area ripe for transformation, and greater efficiency? While a typical credit card transaction might process immediately, health insurance payments could take many weeks to process. A primary care physician in the United States, for instance, might have to spend $20 or more to submit a single bill and collect payment, far more than the comparable cost in other countries.

This case study explores the structural factors that contribute to high administrative costs in health care, from regulatory compliance costs, to the large number of unique contracts between insurance companies and providers, to the complex contractual requirements—and multiple provider manuals and updates. For this sector, what was holding back the innovation and efficiency that had evolved within the traditional finance ecosystem? Would health care billing emerge as the next big disruption target—and what pathway would offer innovators the best chance of success?

Learning Objective

This case is designed to help students understand the full complexity within the U.S. health care system’s financial processing—and why a typical medical bill might take weeks between date of service to the date the provider received payment. Students discuss the opportunities to tackle the huge challenge of overhauling the existing payment processing model, and improve the speed and efficiency of health care payments.
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