How Can Buy Now, Pay Later (BNPL) Be Applied to Healthcare?

One of my highlights from the ViVE Conference was the opportunity to hop on stage with Caroline Meehan, Senior Director of Partnerships at Affirm.  The fireside chat was called “Just what the doctor ordered: flexible, transparent payment options” and educated myself and those in the audience on the Buy Now, Pay Later (BNPL) space and particularly how it’s being applied to healthcare.  Given everything that’s happening in healthcare, this is a really relevant topic because healthcare organizations want predictable payments from patients.

The session was on trend with what’s happening in healthcare in a number of ways.  First, patients are having higher deductible plans and thus are on the hook for more of their medical expenses.  Second, healthcare organizations used to rely on the more reliable insurance payments and now face the reality of a much higher patient pay volume.  Third, many of the younger generation are moving away from credit cards, but they still want some sort of flexible payment option that allows them to pay for healthcare services over time.

This is where Affirm comes into play.  They’re bringing the Buy Now, Pay Later (BNPL) solution offering that we’re seeing in so many other areas of our life to healthcare.  That’s right, if you’ve used Amazon, you’ve probably seen the Affirm option to pay for your purchases.  Not to mention other places like American Airlines, StubHub, GoodRx, RepeatMD, and Veterinary Emergency Group to name a few of their current partners.

How does it work?  Healthcare organizations can easily just add Affirm as another payment option.  Simple as that.   It doesn’t have to replace your currrent billing system or disrupt the payments you’re already getting.  It can just be another option for your patients to consider when paying you.

What was interesting to hear from Meehan was how providing Affirm as an option for payment meant that many people didn’t forgo the healthcare services they needed.  The flexible payment options opened the door to them getting care they would have otherwise delayed.

I also asked Meehan about how Affirm builds trust and satisfaction with many in healthcare that are leary and untrusting.  Two of the things that stood out to me were that Affim never charges compound interest and they don’t charge late fees.  They only charge simple interest and sometimes even no interest.  Let’s look at an example of what this means in real practical terms.

The average American spends $1,400 out of pocket annually on healthcare. For those who revolve a balance on credit cards (about 50% of Americans), compounding interest can add an additional $308—about 22% of the original expense. In comparison, an Affirm payment plan with simple interest would cost half that, ~$150.

How can Affirm do this?

This was the question I had when I learned about Affirm.  The reason they can do this is with every transaction they are doing a real time check to assess the transaction and any risk associated with it.  They’re using their data and experience to be able to offer the Buy Now Pay Later option while understanding the risk of not being paid back. And because they only lend money they believe will be repaid, they don’t rely on late or hidden fees. They don’t charge those, ever.

Meehan shared a real life example of RepeatMD partnering with Affirm which you can find summarized here.  RepeatMD is a software platform for dermatologists, plastic surgeons, dentists, med spas, etc.  After integrating Affirm into their software, practices saw higher basket sizes with more completed purchases.  They found increased patient satisfaction and loyalty.  No doubt patients have different payment expectations today than they did before and Affirm helped RepeatMD meet those expectations.

It was fascinating for me to learn more about the Buy Now, Pay Later space from Caroline Meehan from Affirm at the ViVE conference.  As costs and revenues continue to shift in healthcare, we’re going to need a lot of creative ways to solve the cash flow challenges many healthcare organizations will face.  I’ll be watching to see how this plays out in healthcare.  What do you think of BNPL in healthcare?  Is it a good fit?  I’d love to hear your thoughts on social media.