This snapshot marks the first in our Embedded Finance Vertical Snapshot series, beginning with a focus on the US Healthcare Providers landscape (excluding payment to payer payment flows). The healthcare sector is notably complex and highly regulated, with widespread software adoption driven in large part by US electronic health record (EHR) mandates. Despite this digital maturity, the embedded finance ecosystem within the vertical remains relatively nascent, with significant room for growth. We see meaningful opportunity for fintech solutions to expand, particularly in patient payments, provider payouts, and financial services integration.
- Sizable embedded payments market: The vertical is associated with a large and stable card payments volume pool with potential for growth. For example, card acceptance has become order qualifying for healthcare software, but most patients still pay in other ways.
- High software usage: The healthcare sector is undergoing continued digitization, with approximately 85% of medical providers now using practice management solutions.
- Moderate embedded lending upside potential: The vertical offers the potential for business and consumer lending, buoyed by provider profitability constraints and an increasing cost of care.
- Fragmented, but consolidating software market: The provider landscape is consolidating, led by acquisitions from hospital systems, private equity, and large tech companies (e.g., Amazon).
1. Vertical Definition
2. Vertical Spend - US Healthcare Providers Revenue
(trillions of USD, 2022-2026)
3. Vertical Dynamics
(all sub-segments)
4. Software Landscape - Practice Management / Billing / EHR
- Healthcare providers often use multiple software products, creating competition for embedded payments and finance.
- Practice mgmt. and billing modules are the most common payment integration points.
- Practice mgmt. solutions are increasingly expanding into other software adjacencies (e.g., EHR).
- Sub-verticals (e.g., dentists, veterinarians, etc.) have specialized software needs and vendors.
5. Embedded Finance Monetization Maturity in the U.S.
Embedded Fintech Highlights
- Most payments are made via insurance, which is more challenging for SaaS to monetize, there remains high volumes of ACH/check, but card acceptance and usage is growing rapidly.
- Embedded e-billing, POS payments, and consumer financing are the most mature embedded fintech products. Consumer financing is often offered for large patient payments.
- We also see potential growth in embedded pay-outs (in various forms) and business financing.
Please do not hesitate to contact Peter Taylor at Peter@FlagshipAP.com or Amilee Huang at Amilee@FlagshipAP.com with comments and questions.