Philip Wimberly, Senior Vice President, Global Payments Integrated
We recently sat with Philip Wimberly, Senior Vice President of Sales at Global Payments Integrated, to chat about the opportunities for ISVs and VARs in the Health Care arena. Health Care is a catchall term for a number of related industries – medical practices, chiropractors, counseling services, physical therapy; the list goes on. What these fields have in common are complexity and heavy reliance on administrative technology. Naturally, one of those technologies is payment processing. Here’s what Phil had to say…
Q: Please explain where health care opportunities exist. Is it in large health care systems, small private practice, clinics, etc.?
“Health care is a highly segmented and underpenetrated market. Opportunities for payment-related technologies in the health care field abound. Anyone ever receiving services from a medical provider can attest to the number of touch-points where it is necessary to pull out one’s wallet.
“Whether small practices or complex health care organizations, services are varied and only marginally centralized. The industry’s reliance on referrals to specialized service providers represents key opportunities for ISVs and VARs.
“Larger health care structures are prone to have established payment partnerships. Practices and smaller organizations, however, can be opportunities, especially in highly specialized fields outside of general practices”
Q: If a VAR sells IT (for example, they sell network security or bar code solutions) to this market and has established relationships, how can they get into the payments piece?
“Clearly, payments are a natural extension of the practice management solution. Due to the commoditization of many IT services, payments and billing can, in fact, generate more revenue over time than software sales. Many IT components ‘speak’ to practice management, EHR and EMR systems. Vertical integration of payment solutions isn’t a great leap.
“The right payment solution will ease time-consuming tasks such as invoicing, billing, reconciliations and the like. As in any offering, the practice must understand the benefits achieved when payments are included with IT offerings. Security, for instance, is a consideration due to both PCI and HIPAA compliance. While card fraud may not be a great concern in a doctor’s office, the threat of hacker infiltration certainly is. Payments and other IT functions are intimately connected.”
Q: Who should ISVs and VARs talk to?
“Physicians rarely handle the process of payments receipt. Rather, office managers, collections and billing companies are smart places to start -- whoever is responsible for collecting the money (as they will appreciate the cost and time savings smart payment products can offer). However, growing practices need to deploy IT infrastructures that scale quickly and with minimal investment, so head technologists will also be key contacts.”
Q: Do VARs and ISVs have a chance at winning the payments business?
“When focusing on a particular industry, there is learning curve. In a sense, your customer’s business must be your business. The solution provider who understands the intricacies of payments, insurance and regulation for health care – offering value-added services to make business processes smoother for the practice – will have a sales advantage.
“With mergers and acquisitions in health care on the upswing, practices are pooling capital and achieving economies of scale; so practices will be hungry for cost-saving solutions like payments. In fact, the pressure exerted on practices to grow is increasing as the industry shifts to quality-based reimbursement and payer reimbursements decline relative to increased cost.”
Q: What are the unique aspects in this market of which VARs and ISVs should be aware?
“Health care is among the more complex industries, but also one of the most lucrative for payment providers. Government regulation, billing requirements, insurance involvement and new technologies will drive constant change. VARs selling health care solutions will need to remain informed, agile and vigilant for changes in the field. In fact, complexities can be so great that some VARs and ISVs may want to ask themselves what part of the health care business they want to pursue. Specialty practices? Cash practices? Those which accept co-pays? There are many considerations.”
Q: How much potential does this segment hold?
“The health care segment offers much potential by virtue of being a demand industry, but also due to external influences forcing practices to merge, grow and adapt. This often leads to overwhelming operational demands which will grow with the group, requiring more and more staff members. To ease these tensions, practices will introduce process standardization and new workflows in areas such as billing, appointments, clinical guideline adherence, co-pay collections, checking eligibility and more. The opportunity for practices to stumble on the business-critical area of accounts receivable is very real. The VAR or ISV which can offer answers to these payment challenges will be strongly positioned.”
Q: Who is winning this business today? Who are the established competitors?
“According to a Health Affairs Study (already several years old), the average physician’s practice can expect to pay around $47,000 on EHR software, plus $162,000 on implementation and maintenance. The VARs, ISVs, network and IT professionals offering these services are taking market share.
“The good news is that growth and acquisition are driving an ongoing need for these services. But, for now, that fact remains that banks are winning the payments business. However, banks cannot deliver customized, targeted payment services appropriate for the medical practice specialty. Therefore, there is opportunity and room to compete.”