Case: Can Fintech Fix Healthcare Payment Processing? (Case: SM-356; date: 06/07/22; length: 15 pages)
Authors: Morgan Kiss (MBA ’22) and Professor Kevin Schulman, MD, MBA, Stanford Graduate School of Business
Introduction
Doris Petropoulos was a rising star in the payments industry. After five short years, she was promoted to lead corporate development and strategy at a Bay Area-based private fintech company. Their valuation had recently soared to $15 billion and, looking for their next big growth opportunity, senior leadership allocated a large cash budget to her team. Petropoulos led initiatives spanning the company’s larger growth strategy to M&A investment activity and was on the lookout for the next opportunity—only to be surprised where she would find it.
On a recent visit to her primary care doctor, the front office staff asked Petropoulos for her proof of insurance and a method for co-payment. She pulled out her health insurance card and credit card. She tapped her microchip-embedded credit card on the reader and her co-pay was processed instantly. Meanwhile, the front office staff took her insurance card and scanned it, front and back separately, and had to type information from the card into their computer system. She realized that this was the start of a long, arduous process of determining plan enrollment, eligibility, benefits, and, ultimately, her bill.
She began to wonder what went on behind the scenes. Why was her credit card transaction instantaneous, while the health insurance payment process had only just started? She went back to her office to discover a startling discrepancy in the speed and cost of transactions between U.S. health care and financial systems, despite some of the very same technologies being relevant to both sectors. Had she just stumbled upon the next big market opportunity for her company?
Download the case. For inquiries, contact Kevin Schulman kevin.schulman@stanford.edu