JPMorgan Chase announces plan to acquire InstaMed
JPMorgan Chase is seeking an expanded role in healthcare payments, announcing plans to buy InstaMed, which operates a nationwide electronic payments platform.
Terms of the acquisition, announced on Friday, were not released, but published sources suggest that JPMorgan Chase expects to pay about $500 million in the purchase, which would make it its biggest acquisition since the financial crisis of 2008.
Executives of New York-based JPMorgan Chase say the acquisition of Philadelphia-based InstaMed will expand the bank’s suite of payment services designed for healthcare consumers, providers and payers.
InstaMed has built a secure, centralized platform that is intended to alleviate vexing problems facing healthcare payments, specifically looking to eliminate paper, improve consumers’ financial experience and reducing the costs involved in collecting payments.
"We've made significant investments in our Wholesale Payments business over the years, and this acquisition will give us a unique advantage in one of the fastest growing sectors," says Takis Georgakopoulos, global head of wholesale payments at JPMorgan Chase.
InstaMed's centralized platform connects healthcare consumers, providers and payers through a proprietary healthcare payments network, enabling digital payments by sharing information securely and more efficiently than in traditional payment models.
"Together, we will be able to invest in and expand the InstaMed Network, accelerate our consumer reach, and deepen our commitment to innovation," says Bill Marvin, co-founder and CEO of InstaMed.
The acquisition will facilitate JPMorgan Chase, which is making an aggressive move into the space to support both payers and providers.
“Health plans are increasingly seeking to integrate payments into their portal experience and, by doing so, take over a key consumer engagement relationship,” says Mike Trilli, research director of insurance for Aite Group, a payments research firm and consultancy.
More complicated billing procedures has provided additional impetus to improve payment approaches and move aggressively to electronic payment platforms such as InstaMed, Trilli adds.
“Healthcare providers have long relied on the billing system vendors to drive payments requirements for payments vendors based on the capabilities of their systems,” he contends. “This approach may have worked for what was once a simple bill payment transaction usually involving cash or checks, but this approach fails to match both the evolution and increased velocity of consumer bill payments.”
“Payments vendors such as InstaMed stand at the ready to remove these friction points with a variety of tools,’ Trilli adds. “As consumerization in payments evolves, many healthcare providers are feeling the pain and continue to reassess their bill payment capabilities.”