The Hidden Path to Healthcare Point Solution Success: Why Payment Models Matter More Than Your Product

How claims-based billing became the secret weapon for healthcare benefits companies

The pitch deck was flawless.

Twenty-three slides showing 28% cost reduction. Member satisfaction scores in the 90th percentile. Clinical outcomes that would make any health plan smile.

The insurance carrier executives nodded through every slide.

Then came the question that killed the deal: "How do you handle billing?"

The CEO's answer: "We send monthly invoices based on case rates."

That's when the head of network operations closed her laptop. Meeting over.

Welcome to healthcare point solutions – where the best product rarely wins. The one with the smartest payment strategy does.

The PMPM Trap That's Killing Point Solutions

Most healthcare benefit companies start with the same flawed assumption: sell on a per-member-per-month basis. Charge $2-5 PMPM across every employee whether they use your service or not.

Sounds logical. Predictable revenue. Easy math.

Here's what actually happens:

The employer now owns your engagement problem. They're paying for 10,000 employees but only 200 are using your service. You got paid. They got frustrated. Next renewal? You're gone.

This is why 60% of healthcare point solutions fail in their first three years. Not because their clinical model doesn't work. Because their payment model creates misaligned incentives.

The Case Rate Mirage

Smart companies figured this out. They moved to case rates.

Only pay when someone actually uses the service. Engagement becomes the vendor's problem. Sounds perfect.

Reality check:

Case rates get billed outside the normal claims process. That means invoices. Reconciliation. Manual tracking. A separate check to write every month.

I've watched HR teams with 5,000 employees trying to track 17 different point solution invoices. They're not benefits managers anymore – they're accounts payable clerks.

The average HR professional spends 6-8 hours per month reconciling point solution invoices. That's time they're not spending on strategic benefits design or employee communications.

The Claims-Based Billing Revolution

Here's what most healthcare startups don't understand: the easiest sale in healthcare benefits is the one that looks like what's already being done.

Insurance carriers process billions of claims annually. They have systems. Infrastructure. Workflows that have been refined for decades.

When you can bill your service as a claim, you disappear into their existing process. No new vendor setup. No invoice reconciliation. No separate payment mechanism.

You become invisible infrastructure. That's not a bug – it's the ultimate feature.

The Three-Stage Path to Claims-Based Billing

After working with dozens of healthcare benefits companies, I've identified a clear pattern for those who successfully transition to claims-based billing:

Stage 1: Product Definition (The Foundation)

Before any carrier will consider billing your service as a claim, your product needs five elements:

Simple Explanation – If you can't describe what you do in one sentence, carriers won't touch you. "We provide virtual physical therapy for employees with MSK conditions" works. "We leverage AI-powered care coordination to optimize treatment pathways" doesn't.

Simple Pricing – One model. Not 17 variations based on company size, geography, and employee demographics. Take a diabetes management program as an example: $850 per engaged member annually. Done. No tiers, no calculations, no negotiation.

Simple Implementation – You should need nothing more than a benefits eligibility file to get started. If you're requesting claims feeds, medical records, and pharmacy data just to onboard, you've already lost.

Simple Understanding – The broker, the employer, the carrier, and the employee should all understand your value proposition in 30 seconds. Complexity kills adoption faster than bad outcomes.

Simple Value Statement – "Reduces MSK costs by 35% while improving return-to-work times by 45%" beats any amount of technical detail about your platform.

Most startups fail at Stage 1. They want to be everything to everyone. Claims-based billing demands focus.

Stage 2: Strong Use Case (The Proof)

Product definition gets you in the door. Use case proof gets you the meeting.

You need to demonstrate three forms of demand:

Member Demand – Sell your service to 5-10 mid-sized employers (500-5,000 employees) on a case rate basis first. Yes, it's painful. Yes, it requires manual invoicing. Do it anyway.

This proves members actually want what you're building. I've seen too many companies pitch carriers with zero market validation. Carriers don't fund your market research.

Client Demand for Simplicity – Document every conversation where an HR team tells you they love your product but hate your billing model. These testimonials become your ammunition.

When you can show a carrier 15 companies saying "we'd renew if you made this easier to pay for," you've built leverage.

Carrier Demand – This is the game-changer most miss. Find one carrier relationship manager who's willing to champion your solution internally.

Maybe you solve a problem in their book of business. Maybe you help them retain a large account. Maybe you give them a competitive advantage in broker presentations.

That internal advocate is worth more than 50 employer references.

Warning about broker demand: Brokers can love you today and ghost you tomorrow. They're hunting for the next shiny object. Build broker relationships, but don't base your claims strategy on them.

Stage 3: Product Pitch (The Close)

Now you're ready to approach carriers about claims-based billing. Your pitch needs four elements:

Simple for the Carrier to Implement – Show them you've done the work. You have CPT codes identified. You have claim format specifications. You've mapped to their existing systems.

One variation. Not 50 different models for different employers. Give them a cookie-cutter implementation.

Benefits the Carrier – What's in it for them? Maybe you become a value-add they promote to retain accounts. Maybe you solve a specific problem in their large group business. Maybe you help them manage risk in high-cost conditions.

I've seen mental health platforms position themselves as the carrier's differentiation strategy. "Our competitors don't have integrated behavioral health support. We do."

Benefits the Client – Clear ROI. Simple implementation. Better member experience. Reduced admin burden. All documented with real numbers from your Stage 2 pilot customers.

Benefits the Member – Lives saved. Money saved. Better outcomes. Easier access. This is where your clinical credibility matters.

When you can show that adding your service increases member satisfaction while reducing costs, you've created the rare win-win-win scenario that healthcare actually responds to.

The Bottom Line for Healthcare Founders

Your product might save lives. Your clinical model might be revolutionary. Your outcomes might be industry-leading.

None of it matters if you can't get paid efficiently.

The path to claims-based billing isn't glamorous. It requires:
• Ruthless product simplification
• Market validation before carrier conversations
• Internal champions who understand both clinical value and billing mechanics
• Patience to build the foundation before scaling

But healthcare has never rewarded the best clinical solution. It rewards the best business model built around a good clinical solution.

Healthcare point solutions that get payment mechanics right consistently outpace their competitors—transforming distribution and value creation.

If you're building a healthcare point solution, ask yourself: Are you solving the patient's problem or the payer's problem?

The right answer is both. And claims-based billing is how you prove it.

What's your experience with healthcare payment models? Have you seen companies succeed or fail based on their billing approach? Share your insights in the comments.

As a former healthcare CEO turned AI consultant, I help healthcare companies build the business models and storytelling strategies that turn clinical innovation into scalable businesses. Follow for more insights on healthcare transformation and strategic growth.