The rapid development in the frontier where fintech meets the financialization of healthcare is changing how funding, access, and management happen in healthcare services. Financial technology could be defined as an innovation that forms a technological basis for improving financial services. As applied to health care financing, fintech solutions address some of the most perturbing challenges in the said industry, namely, increasing health costs, complex billing, and consequently extremely low levels of accessible care.
Another big avenue through which fintech is shaping healthcare finance involves the development of more efficient payment systems. Historically, the process for billing in healthcare was sluggish, less transparent, and, in most instances, prone to different types of errors. Patients usually receive bills that they barely understand, while providers complain about the slow pace at which they are paid and the administrative workload. Digital payment platforms from fintech firms have facilitated better ease of the stated processes and quicker transactions between the patient, the health service provider, and the insurer. These digital touchpoints will facilitate processing of payments in a far more effective and transparent manner with reduced administration costs and with increased cash flow efficiencies for healthcare providers.
Second, and most importantly, fintech allows flexible and patient-friendly methods of payment. High out-of-pocket costs and unexpectedly incurred medical expenses are major financial drains for the patient population in large segments. Fintech companies are coming forward to offer patients financing options for installment payments, healthcare credit cards, and point-of-service loans for medical services in an effort to make healthcare more affordable and accessible. For instance, CareCredit and Klarna are some of the fintech companies that offer such financing tools through special credits, which enable patients to serve their various healthcare needs without high-interest debt. These solutions not only reduce patients' out-of-pocket expenses but also help healthcare providers reduce bad debt and improve patient satisfaction.
Another contribution that FinTech is making immensely relates to insurance. Traditional models of health insurance are, in a lot of ways, alienating-complicated and rigid in their pricing. The technology startups in the Fintech market are trying to make insurance products more transparent, adjustable, and friendly. For instance, insurtech startups are deriving online platforms where people can consumers compare dozens of health insurance plans, enroll in the plan of their choice, and manage claim settlements. These platforms enabled the use of algorithms to analyze humongous health data sets on individuals for recommending a personalized insurance cover offering better coverage at a lower cost. A good number of fintech companies are also in the forefront, looking for means to make insurance transactions more transparent using the blockchain technology by effectively reducing fraud, hence rebuilding trust within the system. Fintech is also at the center of spearheading new ways of making health care more accessible to the people; most parts of the world, and even more so, the lower and middle economies, prevent access to quality health care mostly by simply instituting financial barriers. Other ways in which the gap is being bridged include, but are not limited to, the provision of microloans and digital savings products that enable people to access healthcare. For instance, some financial technology companies partner with healthcare providers in the provision of micro-insurance products covering basic health services at a relatively small premium. These could also include making crowdfunding websites for medical expenses, which the community can contribute in aid to very sick but less privileged persons.
Lastly, emergency healthcare accounts and financial products make healthcare savings and investment innovative. Things such as Health Savings Accounts, HSAs, and Flexible Spending Accounts, FSAs, are fast-moving companions for healthcare expense management in a tax-advantaged manner. Fintech companies are incorporating these products and making them current by providing digital platforms that enable consumers to easily manage their accounts, track expenses, and invest unused funds. The mobile apps attached to such platforms also come with features such as real-time tracking of spending and investment help, which ultimately enable consumers to make more informed choices regarding their healthcare finances.
But there are a couple of problems with that. Supplementing the foregoing arguments, one would further argue that data security and privacy have formed points of debate, with most of the fintech solutions revolving around the collection and processing of sensitive personal health information. This has implications for patient confidence and cybersecurity-related regulations such as HIPAA in the United States. On the other hand, consumer protection and market stability risk are associated with the quick pace of FinTech, with development surpassing that of current existing regulatory regimes.