Fintech startup expands to meet growing need for medical loans

Crains Atlanta ^ | 7-6-2017 | Richard Lawson

[spintreebob]

In the post-Great Recession world, Kennesaw, Ga.-based LendingPoint saw an opportunity in what is called the “near prime” market, borrowers whose credit rating is in the 600-700 range. LendingPoint loaned $15 million its first year, according to Tom Burnside, one of the founders and chief executive officer. LendingPoint has since reached $260 million in loans, employs more than 100.

Now, LendingPoint ... making loans easier to obtain for covering out-of-pocket medical expenses. “We do a lot of medical as is,” Burnside said of the company’s standard lending.

But a new deal with ezVerify, a healthcare information technology company based in Miramar Beach, Fla., gives patients more accurate information on what insurance will pay and what they have to pay themselves. With ezCarePoint, the new service partnership between LendingPoint and ezVerify, the loan decision can be processed quickly, before the procedure is performed so a patient doesn’t get hit later with unexpected expenses.

The market size for this type of lending could be in the tens of millions. According to a 2014 survey from The Commonwealth Fund, a New York-based private foundation that promotes improving the healthcare system, 31 million adults aged 19-64 who have insurance had such high out-of-pocket expenses or deductibles relative to their incomes that they were underinsured.

At the time, 44 percent of those underinsured skipped needed care because of the cost. Half of the underinsured had debt loads of about $4,000.

[spintreebob]

Insurance is not the only solution. Medishare, Direct Pay and now LendingPoint are viable and better. Imagine if hospital prices could give discounts to those who pay at the door. Hospitals would be spared the expense of billing, or collections, of bad debts. And wouldn't have to wait as long as they do in Illinois and some other states for Medicaid payment.

[buckalfa]

Medical loan companies have been around for nearly 40 years. What seems different is that this one seems to operate on the front end of the revenue cycle. I wish them and the participating hospitals success. The problem remains though that even with potential access to credit, not many will be able to afford loan payments (on top of existing debt) on what can amount to tens of thousands of dollars in deductibles and copayments.