With a genuine interest in helping both medical providers and patients, Tyler Johnson is committed to disrupting the patient finance industry—a space historically dominated by big banks. Since obtaining a degree in business management from California State University, Bakersfield, he has demonstrated a comprehensive knowledge of the field as well as an enthusiasm for exploring new practices and approaches. In January 2018, Tyler joined Healthcare Finance Direct as a financial controller and worked his way up to director of operations within the first 12 months. By May 2019, he had become chief operating officer, and in January 2021, he took the helm as the firm’s CEO. Today, with nearly a decade of business and finance experience under his belt, Tyler focuses on building a strategic vision for the company, working to ensure that the needs of both medical providers and their patients are being met, and supplying employees with the support and resources they need to thrive.
Based in Bakersfield, CA, Healthcare Finance Direct is a privately held financial services firm that was founded as a startup in 2010. Unlike traditional lenders, they offer a state-of-the-art technology platform, which effectively gives the keys of strategic control to medical providers. Tyler and his team of financial experts work to equip practices with affordable payment plans and financing options that fit their patients’ needs. To date, Healthcare Finance Direct has worked with doctors and clinics to help over 700,000 patients (projected to be over 1 million by next year) in all 50 states and Canada—resulting in 100% revenue growth year-over-year. The Top 100 Magazine recently had the pleasure of speaking with Tyler to learn more about Healthcare Finance Direct, the company’s unique model, and the clients they serve.
Let’s start with a bit of background. What led to the establishment of Healthcare Finance Direct?
The firm came about after the Great Recession of 2007-2009. By 2010, many people could still pay their bills, but if their credit scores had fallen, they were denied medical service. Healthcare Finance Direct was founded to address this issue. From day one, the firm’s goal has been to offer an innovative new model that would allow medical practices to offer pay over time options to their patients.
How does your unique model help patients who struggle to afford medical care?
We recognize that when patients lack sufficient cash or credit, everyone loses. While medical loans help people with good credit, only about 50% of patients applying for those loans get approved. The rest either rely on the practice to foot the bill or they get turned away. To help patients gain access to the treatments they need, our model offers an alternative—an affordable, pay-over-time plan that allows practices to accept more patients, charge interest, and mitigate risk of default. There’s also no need for medical providers to worry about collecting payments. When healthcare providers offer pay over time plans on the Healthcare Finance Direct platform, we manage the entire process with infrastructure and processes that would rival any professional lender. Then we deposit payments directly into the providers’ accounts daily, resulting in less credit risk and a better patient experience.
How does your model differ from those of other financial service firms?
Our model is the only one of its kind, at least inside health care where the big banks determine whether they will lend money to patients based upon FICO. Sadly, because the banks primary concern is protecting their money, the majority of people are denied health care financing. The banks have never explored what patients or providers need as a “total solution.” That’s where we come in. The type of financing we support is non-securitized, which makes it critical to be correct about each patient’s ability to repay. We’re essentially the bridge between the capital market and the health care providers, but our focus is on the providers. We want them to be able to say “yes” to all patients, if possible.
What types of health care facilities do you serve?
We work with both public and private companies or practices—with a focus on large enterprise and middle-market providers who specialize in elective medicine and have at least 10 locations. The most common practices we serve are dental, Lasik, audiology, orthodontia, cosmetic-related, invitro fertilization and surgical centers. Since the patient costs for their services can range from $1,000 to more than $15,000, financing options can be necessary for up to 70% of patients for some of our providers.
How does Healthcare Finance Direct benefit providers?
At the heart of it, most providers want to serve every patient if they can, but it must be profitable for them to do so. Just by leveraging technology and finance, we allow them to serve every patient, if they so choose. Our job is to give them tools to make it easy—multimillion-dollar technology, a call center, accountants, and analysts to support their patients’ needs. There’s no longer any reason for health care providers to manage patient financing in-house because it’s simply not cost-effective. We also negotiate with health care providers to give discounts that will make their services more affordable for patients. A lot of hospitals collect less than 2% of what’s owed to them solely because it’s hard for patients to pay due to portals that are difficult to navigate, etc. We use technology that makes it easier for patients to make payments, and we cut down on administrative expenses and headaches for our providers while helping them bring in more revenue—a minimum of 5% to 30% or higher—dependent upon the other affordability options they have available.
Can you expand on how you help providers increase their revenue?
Of course. We essentially mitigate the providers’ costs by optimizing their down payments from customers. While banks pay providers up to 90% on prime patient financing (and keep the interest income from the customer), and for subprime, can be as low as 60%, our model allows providers to make more on every dollar—collecting the interest, or at the very least, benefitting from the income they receive from it. We put their profits on a payment plan so that the down payments cover their fixed costs. Ultimately, this gives providers the flexibility to either collect a monthly revenue stream or sell off the profit to the capital markets so that they can get cash now. We also empower providers to be in control of the customer experience. Instead of being handed off to a third-party financial organization, such as a bank, patients are placed firmly in the hands of providers to ensure they receive optimal care.
To what do you attribute the company’s success?
I think this niche in the market came about due to the false assumption that big banks will always be in control. We refused to accept that notion based upon basic business principles. Instead, we recognized there was a better way that would allow providers to say “yes” to more patients. So, I attribute 100% of the company’s success to the humility and discipline of our team members. When we see that patients are underserved or not served at all because of their credit scores, we are determined to help providers bring in more revenue so that patients will have access to the care they need.
Chief Executive Officer
Healthcare Finance Direct