Our Investment in PayZen
We are excited to announce that 7wireVentures invested in PayZen through the company’s $15 million Series A round of financing. PayZen is an AI-backed technology solution tackling the US healthcare system’s pernicious affordability crisis for consumers across the country. We’re proud to support the company alongside additional investors, including SignalFire, Link Ventures, Viola Ventures, and Picus Capital, to advance PayZen’s mission of solving healthcare affordability for everyone, no matter the stage of care.
Founded in 2020, Payzen’s first-of-its-kind medical financing solution engages and offer consumers a better way to pay their medical bills via a personalized payment plan they can afford. Payzen’s proprietary technology considers a holistic picture of a consumer’s financial health by ingesting claims, billing, and self-reported consumer data. The digital platform also easily integrates into any healthcare system and allows hospitals, health systems, and large physician groups to more accurately determine a consumer’s unique ability to pay, ultimately accelerating collection rates.
“Medical expenses are the leading cause of bankruptcy in the U.S.,” said Lee Shapiro, Partner at 7wireVentures. “Cost is an insidious and inevitable part of the healthcare journey. We’re proud to partner with PayZen as the team tackles the affordability crisis and makes care more affordable for consumers across the country.”
At the helm of the organization is Itzik Cohen, co-founder and Chief Executive Officer, and Ariel Rosenthal, co-founder and Chief Technology Officer, who jointly founded the company after identifying the dire need for consumers to have access to convenient and affordable options to pay for their medical care. Both Itzik and Ariel are senior fin-tech leaders and repeat entrepreneurs who recently served as the CEO and VP of Technology respectively at Beyond Finance, a consumer finance platform aimed at helping consumers consolidate and manage debt.
“As healthcare costs continue to shift to patients, nearly one in four Americans now have trouble affording their medical bill,” said Cohen. “We could not be more excited to have the 7wireVentures team, along with their extensive network, by our side as we leverage our new capital to further address the growing healthcare affordability problem and fuel our mission of helping patients “Care Now, Pay Later.””
PayZen offers smart, flexible, and transparent payment options for consumers, with 100% of patients automatically approved for a 0% interest, no-fee payment plan. The platform also easily integrates into a providers’ revenue cycle system and process to help health systems dramatically increase consumer access to healthcare while improving patient collections.
Why We Invested
Mounting Consumer Healthcare Affordability Crisis
Today, nearly one in four Americans report having trouble paying a medical bill and many have been forced to make challenging financial decisions such as cutting back on food, clothing, or other basic household items. Expensive medical bills can be dire to an individual or family’s financial health and today, medical issues are the number one cause of bankruptcy. Although rising healthcare costs are a large contributor of this crisis, consumer responsibility for financing medical expenditures has more than doubled over the past 15 years with the rise of high deductible health plans. Additionally, 60% of Americans report they are unable to afford a $1,000 emergency expense and as a result, nearly two thirds of consumers avoid or delay much needed care due to cost. This often results in avoidable, and costly, emergency department visits down the road.
PayZen’s next-generation medical financing platform addresses these challenges through smart, tech-enabled, and personalized medical payment plans. Through PayZen, consumers can conveniently select a payment after a procedure takes place to pay their medical bills over time with 0% interest. Through a personalized approach and considering multiple data sources, consumers are provided with custom payment plan options they can actually afford.
Increasing Financial Pressures Borne by Health Systems
The challenges of rising unpaid medical costs and the current healthcare affordability crisis are also impacting the healthcare system at large. Providers delivering care are experiencing the pressures of unaffordable services and financing the burden of higher levels of uncompensated healthcare costs and bad debt, longer payment cycle times, and higher administrative costs to collect patient bills. Additionally, a significant portion of out-of-pocket patient expenses today are deemed uncollectible. This contributes to the realization that 25% of all US hospital spending is administrative related, the highest share when compared to other developed countries and presents a meaningful opportunity to reduce expenses for these organizations more broadly.
PayZen addresses such challenges by partnering directly with health systems to provide a non-recourse financing solution while accelerating collection rates, improving cash flow, and reducing administrative complexities. PayZen seamlessly and quickly integrates into a health system’s electronic medical record or revenue cycle management solution and can onboard and enroll consumers in under one minute. Through the company’s proprietary underwriting engine, PayZen customizes a payment plan that efficiently factors in risk-adjusted pricing for providers and is proven to accelerate collections by over 50%.
Lack of Tech Forward Financing Solutions
While some provider organizations have elected to fund their own patient medical financing programs or partner with third-party lending organizations, these solutions offer a one size fits all approach. Existing platforms neglect to consider the holistic financial picture of the consumer, translating to high rates of payment defaults, low collection rates, and sizeable bad debt reserves for the health system.
As a result, there is a clear opportunity for PayZen to partner with health systems who are seeking a solution that enables consumers to afford their medical treatment through personalized and affordable medical financing options, as well as to aid in the billing and collecting of medical loans to increase health system liquidity.
By the end of 2021, less than a year since launching, PayZen is set to partner with several major health systems and hospitals to drive affordability across their patient populations. The team is well positioned to achieve its mission of addressing healthcare affordability for everyone, no matter the stage of care. We are excited to welcome PayZen to the 7wireVentures portfolio!