The Hidden Reason Healthcare Bills Keep Rising
When you pay $2,000 for a medical procedure that actually costs $250, where does that extra money go? Not to your doctor, and not to better care. Instead, it disappears into a payment system that hasn't fundamentally changed since the 1980s – and it's costing Americans billions.
Your money, lost in translation
"Think about what happens when you use your credit card," explains Boe Hartman, who built Marcus and Apple Card at Goldman Sachs before co-founding and becoming Chief Technology Officer of Nomi Health. "The transaction shows up instantly. But in healthcare, we're still using fax machines and manual file transfers to process payments."
The consequences of this outdated system go far beyond slow processing. Because healthcare payments lack the transparency and real-time pricing of modern banking systems, costs can be manipulated in ways that would be impossible in other industries. Providers often don't even know what they'll be paid until months after delivering care, leading to inflated prices that protect against uncertainty.
Following the money
Every time your doctor enters information into their electronic health record system, they're not just recording medical data – they're initiating a financial transaction. But unlike modern banking systems that process payments instantly and transparently, healthcare payments bounce through layers of administrative complexity.
The result? Americans spend $4.5 trillion annually on healthcare, projected to reach $5 trillion by 2025. A significant portion of this spending isn't paying for care – it's paying for the inefficient system processing the payments.
Why nothing changes
In banking, systems that process trillions of dollars face intense scrutiny. Banks must regularly prove their systems are secure, efficient, and resilient. However, healthcare payment processors, despite handling $4.5 trillion annually, operate with minimal oversight.
This lack of accountability persists because of a calculated industry response. Whenever reformers push for modern payment systems – the kind that could deliver real-time pricing and transparent costs – the industry claims this would interfere with medical decisions. "We made this an emotional discussion," Hartman explains. "It became an argument of 'I don't want somebody between me and my doctor.' That branding has stuck."
Yet this argument deliberately confuses medical care with medical billing. While your doctor makes healthcare decisions, a massive back-end bureaucracy processes the payments – and that's what needs modernizing. By blurring this distinction, the industry has made its outdated infrastructure untouchable.
The path to lower costs
The solution, Hartman argues, lies in treating healthcare payments like other critical infrastructure through good policy and public-private partnership. "We do it with power grids, we do it with highway systems," he notes. "We need to hold the people participating in this market accountable."
At Nomi Health, paying providers within 48 hours isn’t just theory. By building modern banking rails for healthcare payments, the company is already delivering real results. When doctors in Nomi Health's network treat patients, claims are adjudicated within seconds and providers are paid in near real-time – similar to how modern credit card payments work. This real-time payment system means providers can offer reduced rates, which are typically 20 - 30% lower than traditional insurance rates.
Hear more insights from Boe Hartman on how to transform healthcare's hidden payment crisis in his recent appearance on the Slice of Healthcare podcast.
Boe Hartman is the Co-founder and CTO of Nomi Health, where he leads the company's mission to reduce healthcare costs through real-time payment innovations. Prior to Nomi Health, he helped build Apple Card and Marcus at Goldman Sachs and served as CIO at Barclays Card International.
