The Growing Role of FinTech in the Healthcare Revolution – TechCrunch
The quest to provide More affordable and accessible healthcare, amplified by the COVID-19 pandemic, has spurred an explosion of innovation, which in turn has attracted massive amounts of capital. To put that in perspective, consider this: In 2019, digital health recorded $ 7.7 billion in venture capital investments, and that number rose to $ 14.6 billion in 2020. However, the the first half of 2021 alone saw $ 14.7 billion in investing in VC.
His marriage to fintech is the catalyst for the transformation of the healthcare sector. Similar to unbundling of financial services and how fintech is evolving vertical SaaS, pandemic-fueled healthcare disaggregation has created new players who are taking a page off the book of the fintech revolution – all starting with payments.
A growing number of startups are now relying on fintech playbook to solve a key part of the healthcare problem – the changing dynamics between patients, payers and providers, and the way payments and associated electronic health records (EHRs) flow between them. Not only is the burden of payments and data flow shifting from payers to patients, providers are now facing a monumental shift to new billing and engagement models, requiring new technologies and platforms to support the change.
Through the lens of fintech, here are three key areas to watch in healthcare.
Gamify consumer well-being to avoid chronic diseases
One of the most important trends impacting the population today is the steady increase in chronic disease. It is estimated that nearly half of the American population will have chronic illness by 2025. People get sicker for longer periods, which leads to a constant spending streak. Non-compliance with medical recommendations by patients is a major factor and is responsible for $ 100 billion in health spending and over 100,000 deaths per year. With about a fifth of patients never filling their prescriptions, it has become a priority to educate and encourage patients to complete care and avoid readmissions or emergency room visits.
The convergence of healthcare and fintech will be an important catalyst in solving some of the most pressing issues facing healthcare today.
To curb the increase in chronic disease and the associated recurring costs, many startups are using behavioral economics and gamification to engage patients and develop healthy habits. For example, companies like Paceline in the USA, Sweatcoin in Europe and Better fly in Latin America gamify well-being by combining fitness and financial rewards.
On the other hand, startups like Semper Health and Well tackle medical nonadherence with behavioral economics. For example, Wellth financially rewards actions such as taking prescriptions on time or having regular A1c tests for diabetic patients.
Fintech for an affordable price and reduce friction
When it comes to payers, there is a major change resulting from the increase in High Deductible Health Care Plans (HDHP) – enrollments have increased 43% in the last five years – emphasizing the increase in premiums and the financial responsibility of the patient. Petty spending threatens the financial stability of many, with 40% of Americans unable to pay an unexpected $ 400 bill.