What Healthcare Can Learn From Fintech’s Digital Evolution

Matthew Hawkins is CEO and Board Member at Waystar. getty Nearly every industry is facing a digital reckoning because of the Covid-19 crisis—few quite so visibly as healthcare. The demands of the pandemic have required more speed and efficiency from healthcare organizations, acting as a tipping point for digital services, including […]

Matthew Hawkins is CEO and Board Member at Waystar.

Nearly every industry is facing a digital reckoning because of the Covid-19 crisis—few quite so visibly as healthcare. The demands of the pandemic have required more speed and efficiency from healthcare organizations, acting as a tipping point for digital services, including payments and telehealth. The digital evolution of healthcare accelerated by the pandemic will continue in the months and years to come. But what will the path forward look like? Solving financial pain points—and namely, the convoluted process of paying for healthcare—will be key to the industry’s digital evolution.

The digital disruption of the banking industry offers helpful comparisons and takeaways for the future of healthcare and healthcare finance. Banking has continued to innovate over the past decade, taking inspiration from adjacent industries as well as the biggest players in tech, growing as an ecosystem while staying oriented around customers’ needs. Here are a few lessons to be learned from the digital transformation of banking.

Get Connected

Digital banking is built on connectivity, thanks to companies and services that helped disparate, complicated systems talk to each other and share data more easily. Stripe and Zelle, for example, enable more types of payments between banks, merchants and consumers in streamlined flows.

In any ecosystem, whether it’s banking or healthcare, software should be designed to work with as many other services as possible. This is often done through the smart use of application programming interfaces (APIs), which allow systems and services to “talk” to one another by sharing data. Plaid, another fintech company, recently rose to prominence (and a $5.3 billion exit) by building a universal “API for banking.”

Just as digital banking has been driven by the improved interoperability of complex systems, the fragmented healthcare system needs more open, easy and secure flows of data. The result will be a better experience for everyone from insurers to hospitals—and especially patients. Healthcare API companies, which make electronic media records more portable and easily connected, have been compared to Stripe and Plaid.

While there has been some progress in the space, a scaled, transformative solution hasn’t fully yet emerged—partially because, in healthcare, there are more challenges than a simple API plug-in can solve. One challenge is the complexity of the data required to facilitate transactions within healthcare. Banking transactions or purchases usually have simple, set amounts and prices. In contrast, it takes a tremendous aggregate of data and a deep understanding of insurance rules to figure out how much patients and payers owe to providers.

Retain The Human Touch

The success of digital banking depended on building consumer trust and understanding—the same is true for digital healthcare. Getting consumers to bank from their mobile phone (or anywhere other than a physical bank or ATM) was not as simple as releasing an app. Banks and fintech companies needed to retain a human touch and maintain relationships with their customers at the same time as they introduced digital and automated services. The resulting products combine algorithmic and human advice. Betterment, for example, is a robo-advisor that encourages smarter saving and investing behavior while providing access to real financial experts.

Financial organizations have also been intentional about combining tech- and human-driven user experiences, for example, using the power of AI and machine learning to handle transactions or simpler customer service requests, and enabling human representatives to focus on more complex and advisory support.

As healthcare continues its digital journey, both incumbents and innovators need to remember that technology is built to serve people, and design and business decisions must support that aim. Machines are better suited to some tasks than people are—for example, making and tracking huge numbers of transactions. When simpler functions are automated, this frees up time and bandwidth for the complex problem-solving, creative thinking and sensitivity that only humans can provide. As patients adjust to a world where more healthcare is handled digitally, providers and insurers must ensure that trust and compassion are at the core of the experience. That means offering opportunities for real conversations, human expertise and nuanced support in addition to automation and self-service.

Innovation Often Comes From Outside Forces

If anyone understands customer-centricity, it’s tech giants like Amazon and Apple. Amazon made one-click shopping part of millions of peoples’ daily lives and now offers its own credit card (partnered with Chase). ApplePay jumpstarted digital payments. Companies like these have inspired financial services organizations to create and acquire disruptive tech—like Visa’s acquisition of Plaid—to shore up the back-end, digitize analog processes and provide better customer experiences.

Similarly, tech giants will push healthcare toward the next phase of a tech-enabled, patient-centric model. Walmart announced its goal to become “America’s Neighborhood Health Destination,” Amazon’s logistics and cloud infrastructure could change healthcare rapidly, and Apple will attempt to leverage its leadership in the wearables market to storm into healthcare. When the giants really get moving, everyone will need to meet a new level of healthcare experience in line with customer expectations.

It will be no easy feat for incumbent healthcare leaders to disrupt and move quickly in a highly regulated space, and we can expect similar acquisition and consolidation activity in healthcare. Companies have emerged to tackle everything from patient data to care management; expect to see some major players bring in startups to keep up with accelerating change. 

Looking Forward

Healthcare is a singular industry. Its path forward, including the challenges ahead, won’t be identical to those in banking. That said, fintech’s history holds helpful lessons for the digitization of healthcare finance. As in banking, it will be important to build a tech ecosystem around connectivity and interoperability as well as to balance (and even enhance) interpersonal and automated interactions. The industry should look to both tech giants and emerging healthcare players for innovation. Most of all, it will be critical for organizations—incumbents and new entrants alike—to create convenient, patient-centric healthcare experiences at every step.

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