Epi. 59: Helping Healthcare providers to offer patients pay-over-time financing options, Alice Ferguson, COO of Healthcare Finance Direct

JC: Welcome, everyone to another episode of The Future of Biz Tech. I’m your host, JC Granger. And I have another fantastic guest on the show today. And listen, if you end up loving this episode, please show your love and appreciation by following the podcast wherever you’re listening, and give it that 5-Star review with some comments because that is how other techies like you and I, find cool podcasts like this. And today I have the absolute pleasure of interviewing Alex Ferguson, the CEO of Healthcare Finance Direct. Alice, thank you so much for being on the show. Tell the audience a little bit about yourself. And what is it you guys do?

 

Alice: Well, so JC thank you so much for having me on the show, I do want to give a call out to your entire audience, including your girlfriend, Ida. 

 

JC: That’s actually my mom. My mom would be like be like  “Wait, that’s not it”

 

Alice: Well yeah your mom, your girlfriend and your two friends. So..

 

JC: I’m working on getting that down to one, it’s just easier.

 

Alice: Well, my name is Alex Ferguson, I am the CEO of healthcare finance, right which is HLD for short, because we know that the whole name is a bit of a mouthful. And we do patient financing, which is not the sexiest two words in the business world right now. But I’m hoping to show you today, why it is incredibly important and why the way that HFD is poised is going to be the wave of the future for this industry.

 

JC: It’s not sexy, but I gotta tell you, healthcare is a pretty big problem for a lot of people, I would say that anything that saves should be money or give puts them in a position where they can take advantage of their actual plan. I mean, I find that sexy, I don’t know, maybe I’m like that.

 

Alice: And I love that you think about it that way. Because you know, every person out there is a patient and every person out there needs to figure out how to finance their procedures. Because as we know, we’re not a country with universal health care and may not ever get there. And the interesting thing is that we see much more left of health care now because people care about how they look, people care about what they want to do. So it’s what they need to do. So the nice thing is that we’re growing organically in those directions. But also we have a 100% approval financing platform, which I don’t know if you know, but like the entire US industry, if you look at the entire population, only about 50% of the population actually have what’s considered like a prime credit score. That’s a score of 80 or above, that’s only 50% of the population, you have the other 50% that gets declined, time over time for getting financing. So they did it. We do have a 100% approval platform. And I did that. We are doing something that is naturally, organically growing as time goes by. That’s why it’s kind of exciting and sexy to me. And it sounds like it for you too. And you’re, you know, more people in the audience.

 

JC: I mean, here’s why I say that, because there’s a stat that I heard, you’re in the industry. So correct me if I’m wrong, but I heard this stat not too long ago, that was alarming. And it was essentially that. For one, we already know that we don’t have very expensive health care for one. And we know that we don’t get a lot for what we pay for compared to some other countries right now, we already know that. Here’s the part that I found even scarier was that of the people who are insured and have plans, most of them will, like avoid going to the doctor even use those plans. Because it’s almost too expensive to even engage in the plant like the premium becomes like the copay can be so high when it comes to surgery or whatever, or they are capped at a certain amount that it is now going to exceed and they know this going in. So what I found to be tragic was that it’s already expensive coming out of their check, you know, every month, and then when it’s time to actually use it to cash in on it. It’s literally too expensive to use, even when you’re paying for it already. And that was crazy to me. Am I wrong on this? Because..

 

Alice: No, and I’m not in the insurance industry. But I’ve been a user of insurance in every way possible. Right? There’s things like co-insurance, which means that, you know, they only cover 20% of something. There’s maximums, there’s deductibles, but even for things like your home insurance, you know that that’s a pain to go through too. Because there’s a deductible, there’s a maximum, there’s caps, you literally have to read the 30 page contract that you get in the mail twice a year. And you know, save that, find that and read through that. You don’t understand what is even covered. So it’s just you right, it’s not just the dollar amount that you have to worry about. But it’s the whole process. Right? That in itself is challenging and daunting and no one sits around being like “Oh, great. I have some time today. Let me read my insurance policy” no one’s sitting around doing that. So I think the whole thing about this is how do we make it easy for everyone to think through and how do we make it comprehensive. So I think you’re absolutely right. Even with insurance, there’s still a question mark as to how am I going to get this covered for that? Sure.

 

JC: Well, let’s talk. I do know that there’s like a b2c aspect where you do but, but I want to talk about the b2b aspects specifically, right. So talk to us about how your company works with other bigger companies when it comes to this.

 

Alice: Yeah, so accounting and setback, if you think about healthcare, so much of healthcare that’s covered by insurance is reactive, you break a leg, you go and you get it covered. But really, the whole world is becoming more health conscious these days. So people are getting more proactive about stuff, I want to fix my teeth alignment before I need to cap a crown, I want to, you know, get this removed before I get cancer there. And that proactive part usually is not covered by insurance. And that’s where we, that’s what they call, elective health care, because nothing bad happened to you yet. We’re not going to cover it.

 

JC: If it’s not broke, don’t fix it. Right?

 

Alice: No, I want to fix it, because I know it’s going to break in the future. So that’s the nice part about this whole light of healthcare piece. Now, with the way that we do this, the way we think about it is, most of these providers, most of these healthcare providers, they’re good at what you want them to be good at. One thing, which is to take care of you, to do the surgery, do the procedure, do the best they can and get you healthy. And they’re not good about thinking about financing, following up with financing, processing your payment, making sure that the mystery behind that all works. That’s not what they’re good at. And that’s not what you want them to be good at either. And so that’s where we come in, we say great doctors, you think about the health care piece, getting that patient, getting JC the surgery, he needs to be the best thing you can possibly be, let us worry about how he can pay for it. And let us worry about following up with him, making sure he is compliant with how he pays for all this administrative stuff. So really, we think about selling to the providers, because we know that the providers don’t want to think about everything else. Anything else but the payment part.

 

JC: Well, that’s a huge infrastructure cost for them as well. I mean, it’s not even just a mental bandwidth thing. I mean, that’s, that’s a lot of money on the books for them to have people who do what you’re talking about, essentially, what you providing for them.. the software sidewise

 

Alice: Software side, people are seen in terms of reconciliations because it’s dollar amounts, the others had to reconcile two ledger’s and stuff like that. So you know, we want doctors to outsource and they do outsource it. And it’s not just doctors, right? If you think about the entire industry as a whole, like every great company out there. Even big companies like Apple where I used to work, what are they known for? They’re known for making great products like hardware, phones, laptops, and stuff like that. They’re not known for software, because look at the disasters of Apple Maps, and Siri and stuff. So even great companies with the exception of maybe Amazon, are good at one thing. And then these doctors are good at one thing. Everything else is really, they’re really better off outsourcing it and giving it to someone else that can make it easy for them to integrate with and make it easy for the patients to use. So that’s kind of what we’re filling. Because we really want these doctors to have an easy time seeing their patients and not spending their time thinking about anything else.

 

JC: So then let’s talk about that. So you can work with big companies, but you can also work with a direct doctor’s office, like just an independent doctor. So I mean, that’s a lot. That’s a lot of I mean, that’s the majority, right? Like, these private practices make up the majority of the system for the most part, right? So when you are talking to, like, what is your kind of 32nd pitch to a doctor’s office, because I find personally, that, you know, they get pitched a lot for a lot of things. And doctors are not always the best business people, because that’s not what they got, they didn’t get into their education for business, they have their education, to help–right? To literally physically help people. But when they start a private practice, they kind of get launched into that side. And it’s really chaotic for them, a lot of them struggle with a lot of things that it takes to create and run a business successfully. So when you are approaching a private practice, what is the main thing that you say, Hey, this is how, you know, this is how we’re gonna make your life better. Right? And then what does that you know, not have to go in any kind of pricing because you know, we don’t want that to change, but just maybe with a model is how you’re compensated.

 

Alice: Yeah, yeah. So what we call our model is called the Win-Win-Win model. So three wins are up to us and the first win is for the doctors. You know, they don’t have to think about in house financing. They don’t have to think about using different financing tools. So win for them because we make it easy for them to have a financing vehicle. The second win is for consumers. Consumers, we take care of our side and we’re experts in that customer experience because that’s what we think about. We think about how to reach the consumer. How do we get them to pay their monthly bills? And we approve 100% of consumers so that they don’t have to worry about it. And they don’t have to worry about ranges or credit reports. The third win is for lenders. So if a doctor says, “Hey, I don’t want this on my balance sheet, because there’s too much money to carry.”, we actually match that doctor or the office to a lender. And we make sure that lenders are able to get a profitable pricing arrangement. So it’s sustainable. And it’s all about sustainability because the doctors just want to set it and forget it, they say we have this financing, we’re not going to change it for the next 20 years, because I don’t want to think about it. So they use the set it and forget it model, where it’s a win-win-win for everyone in this ecosystem. 

 

JC: In that it takes away the problem of them having to bill insurance companies and all the crazy delays and, and negotiations that go on with that, or is it not? Like is that still gonna be part of it or what?

 

Alice: So we’re separate from insurance, right? So customers can still say, “Hey, I want to use insurance for this.” A lot of treatments are covered by insurance. So they still had that part of the world. But if a person says, “Hey, I want to pay out of pocket, but I can’t actually afford it.” or “I want to pay out of pocket and I want to use part for insurance.”, that part will still be by insurance. And there’s billing companies and there’re insurance claims companies that can do all that. We’re essentially full of people that want to do cash pay, but can’t afford to, or want to do cash pay and they can’t do it in one lump sum.

 

JC: So then, you guys can also work with plastic surgeries like like you said, elective, or is it only just like, where’s that elective stop or not?

 

Alice: Well, it’s I say elective, because that’s where we tend to gravitate to. But really our solution can work for almost anything. It can work for a fine, it can work for anything where you have a large chunk of a payment that you want to spread out over time. And the big difference, where I should maybe take a step back and explain to the business model is, we are essentially giving a financial arrangement between the doctor’s office and the patient. The big difference is that we’re not a bank, and we’re not a lender ourselves. So if you go into your doctor’s office and say, “Hey, I’m gonna pay for this crown, but I don’t want to. It’s not gonna be covered by insurance. I want to pay for it out of pocket, but I want to have some sort of arrangement.” Instead of the doctor saying, “Great, go apply for a credit card”, and you get a credit card, and that’s your relationship with the bank. We would say it’s using shopping contracts with your doctor. But the doctor uses us for first party services. So we’re in there, but you’re not dealing with a bank at the end of the day. Like if you go to Home Depot today, you want to get a loan, there’s a Home Depot home loan, but it’s actually Citibank. So you’re ultimately dealing with a bank. And because banks have all these regulations and compliance, their underwriting only approves at 50%. Because we use something called a retail installment contract model, we’re saying your relationship is actually with the doctor, your contract is with the doctor. Our job is helping the doctor services onboard to technology and everything else. But the doctor’s name is still on that contract with you. So if you have any issues, you know, if you want to return the liners, you get busy, they just don’t work. You know, you don’t have to deal with financing companies to figure out how to stop my payments. You can go straight to the doctor and say, “Hey, I want to return this, it’s not working for me” and the doctor is like, “Great, I understand what you’re saying JC, let me just cancel this for you.” It just makes it much easier for the patient.

 

JC: With the provider on the back end, they deal.. they can still deal with their doctor’s office essentially, right?

 

Alice: Exactly.

 

JC: Do you find it? Do you work with bigger ones, like hospitals? Or do you find that they already have their systems in place? You know, so you do the local or the smaller mom and pop so to speak practices? What about the bigger companies

 

Alice: So we can go to the hospitals. And we do work with big companies that have, for example, 100 offices, or ones that are completely ecommerce. You know that you go online, you pay through us, and then you get your stuff in the mail. So we do work with pretty big companies. Hospitals are a little bit different in that they have a  pretty rigorous insurance billing process. And then a lot of hospitals, what they do is they actually kick it to a collections agency. So if someone’s not paying their bill on time, they kick it to a collection agency, which can have different terms and we’re not a collection agency either, because that is regularly a little bit different.

 

JC: So how does your financial model work? Like how do you guys make money just from General? 

 

Alice: Yep. So we essentially take a percentage of the payments that we are getting for the provider. So the provider we say “Hey, you have 100 customers that come into your doors, you know, in a month, but 20-30% of the time, you can’t actually treat them because they can’t pay for their services. So we will get you that 20 to 30%”. And then for that 20 to 30%, they’ll be put on like a monthly payment cycle. And when they get that payment for you, because it’s not always, you know, there’s always people that can’t pay on time or stuff like that, when you get that payment, we get a small percentage of that.

 

JC: Feels like a finder’s fee on each payment a little bit is one of the money, they never would have been able to get themselves, you get that. And then you can take a small finder’s fee like, hey, for the work we put in here, we’re gonna take a look..

 

Alice: We have a great call center. That kind of service, those folks they call in, you know. We have chats, we have SMS with them. We send emails, we send mailers, we send SMS texts, the stuff that you know, patients appreciate, and this is stuff that doctors can’t do or don’t want to do. We have all the servicing tools to make it friendly and make it easy for patients to pay. And we deal with all that. All the doctor’s office does is connect us to their payment system to the bank and say, “Alright, we’re just getting the money rolling to us.” The things that we give them reporting on, like how many loans, how many contracts they originated. They get reports on who’s late, who’s not late, so they get all those reports, that’s easy to see if they want to see it. But really, all we’re doing is saying, “Great, you’re in the office, here’s a little screen, sign up here.” And then you get money flowing to you as soon as customers sign up.

 

JC: So does that mean that the end user is the patient, does that mean that it’s like an interest free? Or can the doctor attach interest on top of it? How does that work? Yeah.

 

Alice: And that’s completely up to the doctor. So this is us being the first party servicer to the doctor who tells us “We want everyone that walks in to get the same pricing, the same interest, the same downpayment”, that could be an option. “We want everyone to get a 0% interest loan, that could be at a 0% interest contract”, that can be an option, too. So it’s all different things that the doctor wants to provide. And if they want, we just segment the customer base by you know, certain demographics, we can do that, too. So it’s actually up to the doctor and what they or their preferences are. But we can definitely, it’s completely customizable. And that’s why we call it a platform, because that means that there’s flexibility. And there’s customization for the doctor’s office.

 

JC: That’s really cool. So first, how long has the company been around? How long have you guys been around?

 

Alice: Over 10 years. So, it actually started out as a mom and pop, you know, looking at Mom and Pop offices with 10 offices, five offices, you know, they just need, they don’t have the infrastructure in place. They use us. And then over the last few years it really scaled up. So now we have clients that have over 800 offices. We have clients that originate 1000s of contracts in a given month. So yeah, we’ve really scaled up. And now we’re starting to think about, you know, to what you were saying earlier, how do we grow? We’re the next evolution. So patient financing. And it’s kind of an exciting time to be here.

 

JC: Well, it’s well, let’s skip to that, then let’s jump right into that question. So we’re first off, where do you see the industry? Or the industry you’re in? Where do you see that going in the next five to 10 years? You know, because I mean, you’re not alone in the industry. But you guys have a really cool value prop, which I think is great. Where do you see that going in the next five to 10 years, whether it be from technology, or legislation, or culture or just anything? Where do you see the industry going?

 

Alice: Yeah, they’re essentially some interesting things going on right now in the industry. Have you heard of buy now-pay later, that BNPL space?

 

JC: Yes, that’s getting really, really popular? And it’s like popping up on everything like eBay? Amazon had their own version of it. I mean, it’s just almost anything you want to pay for. You can get it right now and then just then pay for it later over time. Yeah, I see it everywhere now.

 

Alice: Yeah, so that’s really been huge in the last five years, and then a firm kind of started that full trend. So because it’s been so popular, there’s been much more regulation on it, on buy-now-pay-later. And then the nice thing is that, you know, people understand the whole concept of like, getting something now and paying later, it’s a little bit different than layaway, which was the trend 10 years ago, 20 years ago.

 

JC: Pay now, get later

 

Alice: Yeah, pay overtime and get it later. So there’s been more focus on that which is something that we’re not buy now, pay later, for payments two weeks apart. So that’s a very defined red tape and those companies are all backed by banks too. So they don’t want to prove it to everyone. They pull your credit report, they write to your credit report as well. Something that we do is called pay over time and we hope to see that possibly growing. Because of this, there’s going to be a shift away from the buy now pay later as is our guess. But also for a lot of healthcare, it’s not buying you know, two hundred dollar shoes, it’s buying $8,000 fertility treatments. You know, you don’t want to pay those over eight weeks. You want to pay them over years.

 

JC: What is the max time that typically you guys allow at this point anyway for overtime?

 

Alice: So our longest right now is about five years. So for loans that are like $20,000 or for contracts that are $20,000, we use a five year horizon. For ones that are about $2,000 We use like a two year horizon. So very, very different from the buy now, pay later, eight week horizon. So we see that shift away from buy now, pay later, especially as people go up on the spectrum of dollar amounts, but also because buy now, pay later has much more regulation on it going forward. And it’s imperfect because they’re just not performing well. Like it’s still, you know, Max Levchin from a firm started to get away from credit cards, but you use credit cards to pay for these. So it’s kind of not really fulfilling the original purpose.

 

JC: When I think a lot of people too are afraid of a credit hit, or they’re afraid of it, not giving them enough time or higher percentage. And, you know, that’s just the fear that’s been instilled through, you know, experience, you know, as consumers, right. So I think we’re, they’ve, I think what they did was good as I think they started an idea, but I think that they have, it’s going to take some time to convince people that it does and that it’s not predatory. Right. And I think that’s the biggest issue is just most people think, what’s the cat’s like, where am I getting played here? Kind of thing, right? Like, am I going to be stuck in this high? Interesting, is it gonna balloon later, and I didn’t read the fine print? You know, like, we’re just the terror that has been instilled. And for good reason, like we you know, 0809, you know, you have we’ve been through it, you know, more than more than once or twice, right. So, um, okay, so let’s talk about your company specifically. What’s coming down the pipeline for you guys here? What kind of cool insight check? roadmap stuff? Can you tell me about what my audience can hear first?

 

Alice: It’s funny that you always want the inside track, but yes.

 

JC: I’m greedy like that. Very greedy, I was an only child. I was raised mostly as an only child. I want it now.

 

Alice: Well, the one thing I can tell you, which I think is very exciting, is through our work over the last 10 years with providers, we know that providers, doctors, really rely on their front office staff. That person has seen the front, that greets, that greets the patients, that does the checkout,  the payments, stuff like that. That front office staff, especially in today’s environment, it’s a rotating role, and what I mean by that is that they are hiring, firing all that very, very quickly. And it’s really hard to hire for that role. So we are taking a major step to make it easy to use our platform for that person that’s sitting in the front office, because those are the ones who are usually talking to patients. The office manager, or the front desk staff is what we call them. There’s a big company called Rectangle Health. That is in 50,000 offices. That is a very prevalent software that does the payment processing and ties it to their revenue management cycle platform. We’ve actually been working on integration with them. Because today, you have to do something on the Rectangles screen, which is, you know, usually a backbone, and then you have to go over to our screen to get financing. Going forward, we’ve just finished our integration with Rectangle, we haven’t fully announced it yet, but we’re going to merge that into one screen. We are training this new front office staff for the fourth time this year. You have to learn and work with one screen and get finance through HFD. And you’re able to get a monthly, you know, payment plan for this patient that’s right in front of you, that’s 100% approval. So you never have to say no to this patient in front of you. And this way, we can have a seamless integration and aggregation of screens. And it’s making it easier for every provider to have that conversation. So that’s something that we’re testing right now with a few select providers, we should be announcing and launching them more widely after the next couple of months. So that’s something we’re really excited for. Because that will make it just one screen, a seamless experience for the providers.

 

JC: See, that’s what I was looking for. That’s the inside track. That’s exactly what I wanted. I wanted to preview. That’s a fantastic deal. Because I mean, that puts you in. I mean, that’s a big deal for you guys. That puts you in so many more opposites just like that. It sounds like oh, you know, one click, you know, apply kind of thing. So I mean, that’s a big deal. So congratulations on that. Um, let’s talk about this. So what motivated you to join HFM you’re the CEO, right. So like, what were you doing before? And then how did they get a hold here?

 

Alice: Yeah, that’s actually the story. So I’ve spent most of my time in a lot of more operational roles, more consumer facing roles. I worked at Apple. I worked at Levi’s, that’s when I got into the FinTech side because we had to do global payments, processing of payments, and people paying. And that’s where I learned that no matter what industry you work in, payment is the final step of checkout. You’ve gotten someone interested in jeans, in phones, or navigate them to your website, but you have to still make sure they can check out. And that’s when I got abandoned carts.

 

JC: There’s a lot of abandoned carts exactly.

 

Alice: Or you forget your card number, you don’t have the card number on you. And you have to deal with that, or you get notice of a  decline from your credit card because of some reason or another. So that’s when I got really interested in payments. Then I worked at a subprime credit card bank, actually. And in part of the bank, I realized how profitable the subprime segment is. Most of us think about prime, you think about your Amex cards, you think about how much you pay on those. But subprime is actually incredibly profitable, because a lot of these players have to charge high fees to offset the risk. Sure. So if their data and their risk modeling, if the underwriting is really sophisticated, which the bank I was at was really good at, they can run a good profit on some of these costs of doing. Now, the reason I found HFD was because the only other industry in the financing world that was consistent, sustainable, recession proof like that, was the health care line. Because you think about healthcare, again, it’s not the same thing as buying four $100 shoes, because that’s an impulse buy. Sometimes health care, you have to physically go into an office, get the treatment performed on you. So we have very little fraud. And because it’s healthcare, which you really need and want, and you’re seeing the doctor who’s like, you know, down the street from you, there tends to be much better performance on those contracts. So I actually came across HFD, when I was first looking to attend to industries that were still financing, that was a sustainable, viable and profitable one. And that’s how I found it, so joining now, our VP of Customer finance, they were there, trying to scale. The time was the right time, the right fit. And then we’ve kind of scaled up our different strategies, but also scale up on how we want to go into the future. In the future, what we find is really these aggregations of services, aggregation of lending and aggregation of screenings. And that’s where we kind of double down and ask “How do we tackle technology aggregation, but also looking at aggregations of providers?” So like clusters of like DSOs, for example, the dental service organizations, where they have hundreds and hundreds of offices, of mom and pops that consolidated, those are a really good way to start. And then we’re looking at fertility, we’re looking at LASIK. Those are all industries where we find that people are really doubling down on, from a customer perspective, that we can help with the large costs to do those services.

 

JC: So how are you guys getting? I mean, they’ve been around for a while, obviously, right? But, you know, a marketing guy was asked about marketing, how are you guys other than doing podcasts? Or do you do some PR? What do you market? How do you normally get in front of doctors offices? I mean, they can be a little harder to market to what you guys are using just as your platforms.

 

Alice: For sure, we really, we have a pretty human touch to our market. We physically go to a lot of conferences, where we can talk to people about understanding how our platform works. We have people literally dialing offices and saying, “Hey, how are you doing it? And how do you want to do it?” So we’re really just kind of focused on people with a human touch. And we actually have a lot of people coming to us now because they know about it’s 100% approval. And that’s a big pain point. They don’t, no one wants to say no to a patient. And when they hear that there’s a 100% approval platform out there, they actually come to us. So we can take them through what’s required to get up and running. And we can get someone up and running in as little as two weeks.

 

JC: That’s fast onboarding.

 

Alice: Yeah. It’s really actually just training that front office staff.

 

JC: That’s cool. Um, I want to ask a little bit about you personally. So I ask this question to my guests. What did you want to be when you grew up? Like when you were a kid, right? And then like, is this it? And if not, like, how did he get here from whatever that initial childhood dream was? I’m just curious.

 

Alice: So I’ve always wanted to be an engineer growing up, because my entire family were engineers. I mean, we used to sit around the breakfast table doing puzzles and stuff like that, because we have that engineering mind. So actually, at a very early age, when I was 19, I was doing work on fuel cell cars. So you think about if cars were actually true zero emissions, literally it would output water. And I was in Austria doing research on fuel cell cars when I was 19 years old, and that’s going kind of well, and this is before the recession. I’m dating myself, but this is before the ‘08-’09 recession where even though electric cars have been around for decades, no one was really driving them. So that’s what I hadn’t realized. The realization that if I worked on fuel cell cars, it may not come to fruition in my lifetime. But I knew I wanted to work on something that was future proofing the industry, the world, and making it better. So I got into healthcare after that, because I had to move away from fuel cell.  And my degree at the time was material science and engineering. So it was more adaptable to healthcare and medical devices. So how I got into healthcare then and how to meander through a little bit, you know, working in operations, working on customer services, but finally ended in a place I think, marries my love for this whole personal finance idea with healthcare. So I’m really glad to finally be at a place where I think I’m going to be for a long time.

 

JC: That’s awesome. Is there anything that I didn’t ask you that you wanna make sure the audience knows either about yourself or the company?

 

Alice: Yeah, I think one of the things I love to pine about is about the future of the credit score. Okay. And here’s why you probably applied to college, you took the SATs, you know, you apply and blah, blah. The credit score that the Americans use in their financial system today is akin to saying your LSAT score describes you, which we know isn’t right. 

 

JC: Yeah, because admissions are moving away from it, they take a look at you as a person, your essays, your references, and everything like that to understand who JC is. But we don’t really have that for the entire American financial system. Right now. It’s all based on his credit score.

 

Alice: And what I love talking about is what’s being done in other countries. So if you look at Africa, for example, there’s no credit bureau but we have three in the US. There’s really no credit bureau in Africa. And there’s a company out there called “Brands”, which is a startup. And what they do is they actually look at your SMS texts and your cell phone data to determine how trustworthy you are as a person.

 

JC: I don’t think we go for that here in America like..

 

Alice: No, it’s too privacy ridden. But this idea of how do you paint a picture of a person without just a score. And that’s what banks do all day, they try to get different sorts of data, bankruptcy data, healthcare data, all this stuff to kind of paint the picture.

 

JC: I have seen a new trend where they are looking at your payment history with other bills like credit card bills, sure, but like your mortgage, your electricity bill, because not everyone has credit cards or, or big ones, but they pay the electricity on time to pay their rent on time. So I’ve seen that you can connect like different accounts now into that, and it can help boost your credit score based on the trustworthiness of just your actions, that wasn’t part of it, for the longest time.

 

Alice:It wasn’t part of it. And if you ever like, had Progressive car insurance, they send you a tool to put into your car. 

 

JC: We have apps now pure now just your phone, you don’t even have to put in your car anymore. Because your phone’s gyroscope and GPS are so accurate. Now that live, you can just download an app and it just runs in the background. And it can see how you’re driving, which I don’t do because I would not qualify for better insurance. They would probably raise my insurance if they saw I was driving.

 

Alice: I got a good deal. I’m keeping it. No. But…

 

JC: The good news is it’s only a one way benefit, there’s no penalty to anyone listening, those apps cannot penalize you for driving like a madman like me. They can only give you a better rate if you drive like a grandma essentially. Right? So just for clarification.

 

Alice: I actually talked to the Progressive person once. I’m like, what do you look at? And they actually look at how regular your routine is. It’s not whether you brake hard, or whether you drive, you know, five above the speed limit. I mean, I’m sure they look at that too. But they actually look at this person, does this person have a stable job? Does this person go to church on weekends? Like little things like that.

 

JC: Well, it’s interesting. That’s really location data. Again, like some people don’t want to see how the sausage is made, right? Like this gets into privacy areas. But again, I can see that I see why they would do that. I can see where the benefit is for sure. Like I work from home for the most part. So they probably look at me and go, This guy’s not driving at all. Yeah, honestly, maybe I should run the app.

 

Alice: That’s only once a week, right?

 

JC: So it’s not like I’m barely driving it on. I thought to myself, Why am I paying all this money for full coverage, that’s the same as the other guy who’s literally out on the road, which is just more risk? The more you’re on the road, the more chance you have of getting in an accident? I’m barely on the road. So it’s like, should I pay a little bit less? You know, I gotta look into this now, just from this talk, I think I’m gonna have to go look into this again. 

Alice: I hope that’s helpful. But I think the idea is that there’s so much to be done about how do we best paint the picture of a person instantaneously without just using a single credit score? And I think that’s gonna be the next wave in the next 10 years. Yeah, which I think is fascinating. That might be one of the few things that I’ve seen that is a massive benefit to all consumers, that is actually catching on as a trend, right? And there’s no catch to it. Really, if you think about it, it’s a win-win, right? And it’s a benefit to the consumers but it’s also a benefit to the risk models of the companies, right?

 Like they now can understand better, where they should be putting the resources or what their risk model should be, and whatnot. So, a bit unfortunate, I think in that respect. I think it’s, I think consumers only get a win if the businesses are gonna get a win, right? So I think the only thing consumers can offer as a win-win, because it’s almost probably never going to happen, is that it’s just a consumer win. You know what I mean? And I think the only exception would be something like Amazon, for example, where one business wins and almost all consumers win. But you know, we could spot that one because it’s really rare, but I do like that trend of where that’s going on credit scores because it is more fair. I think it also helps eliminate any kind of racial or poverty disparities that you have in calculating it. You know, there’s no person at the top going, “Oh, we want to keep that person down.” That’s not the point. But when the numbers are in line, they can be misinterpreted, right? So you’re looking at someone who maybe is poor and doesn’t have a credit card, because they don’t qualify for one, it doesn’t mean that they’re not trustworthy, it doesn’t mean they don’t have a standard income, that they wouldn’t pay every single month. It just means they don’t have the credit card, for example, right? And so if you have these alternate ways of deciding if they are trustworthy, then now that person can live a more functional life and be part of a more normal society and get a credit card or get a cell phone, you know, a smartphone, which usually they check those things for payment plans. I mean, everything, even electricity bills, they still run credit on that, it’s crazy. So anytime that we can think outside the box, and give everyone a fair chance, regardless of their situation, that’s awesome.

 

JC: So I think that’s such a great feature that you guys have, and I can definitely see how a doctor’s office or even a hospital would love that. Because, you know, there’s a lot of leakage, right. There’s when they can’t take on a patient because of money. You just now solve that issue for everyone involved. Like how is that bad? Everybody wins. I love that.

 

Alice: I mean, we live for these testimonies that we get from the front office and it’s like, “Oh my gosh, John came in because we call him now that we have HFD, and he was so thankful that he was in tears knowing that he can probably get his teeth fixed.” 

 

JC: Can people refer like, if someone was listening they’re like, I want to get like elected surgery for something, you know. And the place I want to go doesn’t have it. Like how does a regular person just refer to, say, have you guys using this? Like, is there any model you have in place for like the person to like, bring it to the office?

 

Alice: You know what, go to the website, send in the little Contact Me form. It’s like, here’s my doctor’s office, here’s the phone number, and our salesperson will get on the phone and try to talk to them.

 

JC: That’s cool. I like that. So how can people do well, how can people reach the company first and then how can maybe someone at a company maybe a little high level if they’re in that, you know, VP or C level and they want to talk to you about a big massive integration, how they get a hold of you personally?

 

Alice: So I’m on LinkedIn, A. Ferguson, Alice Ferguson and then AFerguson@healthcarefinancedirect.com

But also, just go to our website, myhfd.com or Healthcare Finance Direct and you know, someone will definitely reply back. We’re a very people-heavy company and we just love talking to anyone and everyone about how patient financing can be so much better.

 

JC: That’s awesome. And listen for everyone listening out there. Again, if you liked what you heard today, be sure to subscribe to the podcast, give it that five star review a little bit of notes about it, you can mention Alice in there. So other cool techies like us can find and enjoy all these helpful B2B software’s that are out on the market today. Alice, thank you so much for being a guest on the show. I love what you guys were doing. That’s why I was so adamant about having you on the show today. And I do hope to talk to you again soon.

 

Alice: Thank you so much, JC. Bye!