Wednesday, December 31, 2014

Julie Papanek: Healthcare Predictions For 2015

This one's huge. Some excellant insights from Julie Papanek (@JuliePapanek). Someone I've started to follow!
Hospitals become a channel for peer-to-peer lending 
If you understand the flow of payments in healthcare, you can predict the trends. Consumers and employers are purchasing insurance plans with high deductibles. As a result, the first dollar that hospitals earn is now coming from consumers. Actually, the first $17,000 is coming from consumers. With an average income of $55,000, most American consumers simply can’t pay their medical bills. When they don’t pay, it hurts providers financially. What consumers don’t pay shows up as accounts receivable on hospital balance sheets and eventually turns into bad debt. Since many hospitals are financed by debt and their credit worthiness is partially determined by the health of their balance sheet, the problem of getting patients to pay is urgent. This raises the question — how can we find the money to help consumers finance their health care payments? Many consumers are able and willing to pay their medical bills, they just can’t do it all at once. Peer-to-peer lending companies have paved the way for unsecured structure notes, where an individual’s loan can be financed by others. These have shown impressive growth. Peer-to-peer lending is already being used to finance plastic surgery and other cash-pay procedures. Now it could be used for the majority of medical expenses in the U.S.

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