SAN FRANCISCO – At a time when health plans are starting their own banks and banks are considering setting up their own healthcare payment services, Canopy Financial is offering itself to the market as the middleman in this increasingly vital arena.
The San Francisco-based provider of IT services that connect healthcare and financial entities recently acquired CareGain, a Chicago-based subsdiary of Fiserv and provider of consumer-directed healthcare account administration and software to health plans, and is working to integrate the company’s offerings into its own platform. By the beginning of next year, says Canopy Financial CEO Vik Kashyap, the company hopes to entice health plans and banks with an all-inclusive electronic payment solution.
“Banks are critical components to the healthcare ecosystem,” Kashyap said.
Canopy is adding CareGain’s Asset Management Platform (CAMP) to HealthDirect, its electronic payment, administration and account management and investment technology platform for health savings accounts (HSAs), flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs). Once integrated, Kashyap said, the Canopy platform will manage more than 1 million CDH accounts, serve more than 50 health plan and banking clients, administer more than 8 million claims a year and support more than 5,000 unique plan designs.
Kashyap pointed out that some of the larger health plans, like United Healthcare, Wellpoint and the Blue Cross Blue Shield Association, have launched their own banking platforms, and
several banks are mulling development of their own CDH services.
“The biggest alternative we’re seeing is the home-grown system,” he said. “But it’s more complex than just taking an
existing checking account platform and repurposing it. These plans need to be distributed in the healthcare ecosystem … and that’s a very different ecosystem” than that seen in the banking industry.
“To make this work, you have to bundle (financial and healthcare components) at the point of sale,” he added. “Those products have not been bundled and sold properly.”
Reed Gillen, a senior analyst for Celent, an international financial industry consultant with offices in Boston, New York and San Francisco, says the company that is able to harness the financial and health plan aspects of a CDH system could see success in the industry.
“The popularity and growth of consumer-directed healthcare accounts is creating a unique opportunity for both health plans and banks,” he said. “A truly integrated, multi-custodian FSA, HRA and HSA administration platform with embedded payment capabilities unlocks a great deal of potential for those in the CDH ecosystem.”