Buy now, pay later (BNPL) applications in the healthcare space are shaping up to be one of the most effective treatments for the high cost of healthcare, filling affordability gaps across a range of expensive treatments ranging from elective surgeries to dentistry to countless other medical necessities.
One new entrant in this up-and-coming category is TempoPay, a healthcare payments platform from Redesign Health that offers a zero-interest, zero-fee, flexible payment card that allows employees to repay immediate medical expenses and health-related services over time via flexible installments through their preferred source of funds: deductions from payroll, personal bank account, or HSA.
While not a new idea, the launch of a new healthcare line of credit points to the potential of the concept as well as demand in the marketplace.
Going beyond some other offerings in the market, TempoPay is also a tracking assistant that consumers can use to monitor how much they’re spending on healthcare, and how the card can be used in concert with existing insurance benefits to maximize savings.
“TempoPay enables employees to utilize their insurance without fear of out-of-pocket costs — removing financial barriers to getting care and staying healthy,” Erika Davison-Aviles, head of product and co-founder at TempoPay, said in a press release. “Our solution is designed to democratize the process, by supporting the needs of all employees, regardless of their job level or income, and to complement existing benefit offerings.”
As healthcare financing moves from old-school installment plans offered directly by practices to third-party digital tools and platforms that add data insights and other benefits to the mix, more specialized forms of healthcare credit are appearing in response to the positive reception.
In mid-October, Synchrony launched Allegro Credit, a new point-of-sale (POS) consumer financing solution for the hearing industry using the Sycle practice management platform.
These and other announcements in the past year reflect consumer demand for health-specific digital payment solutions that are in sync with the digital transformation of medical payments.
The trend is taking several forms. For example, the study “Connected Wellness: The Next Prescription For Healthcare Providers — Digital Wallets,” a PYMNTS and CareCredit collaboration, finds digital wallets becoming increasingly popular to pay the doctor.
“PYMNTS’ data finds that 24% of all consumers used digital wallets to make their most recent healthcare payment. This share is similar to the portion of consumers who used digital wallets to make their most recent grocery purchase and 22% more than the share of consumers who used digital wallets to make their most recent retail purchase,” that study said.
As Synchrony Senior Vice President and General Manager of Health Systems Shannon Burke told PYMNTS, “If we just think about the fact that $400 billion will be paid out of pocket or is owed out of pocket, there’s a massive opportunity for financing there. We know that once you get over a bill of about $800, many people want the option to pay that over time.”
See also: Healthcare Financing Gains Broader Acceptance With Patients, Providers
BNPL More Than a Band-Aid
PYMNTS research finds that nearly 6 in 10 (59%) of all U.S. consumers are living paycheck to paycheck — 43% of them earning over $100,000 a year — and 43% of paycheck-to-paycheck consumers see the sense in using BNPL to cover out-of-pocket medical expenses.
The October Buy Now, Pay Later Tracker® a collaboration with Splitit, notes that U.S. consumers are sitting on roughly $88 billion in medical debt, adding that “BNPL companies are looking to fill this gap, offering customers the ability to finance their health procedures in the same way they would retail purchases.”
It adds that “Splitit, a BNPL provider, partnered with medical payments firm DOCPAY, to increase the number of healthcare deals by approximately 50% over the past six months.”
This is extending to dentistry, too — a medical space where insurance often doesn’t count for much beyond cleanings and fillings — and helping consumers afford costly implants, caps and crowns that many people forego due to cost, endangering dental and physical health.
CareCredit comes into the frame here again, as PYMNTS reported that “CareCredit was founded as DenCharge, providing consumer financing for pricey procedures like root canals, caps and crowns. This grew into a broader healthcare line of credit concept. Hurt by the pandemic as much or more than other medical practices, the truly painless dentists of 2022 are those offering crucial treatments in affordable installments.”
See also: Buy Now, Pay Later Options Help Fill Dental-Care Gap