Fintech Working to Help Hospitals Ease COVID-19 Financial Burden
Collateral Velocity Testing Low-Cost Finance Solution for Hospitals
CHARLOTTE, N.C. - April 7, 2020 - PRLog -- To assist hospitals and health systems with the financial impact of COVID19, Collateral Velocity, Inc., announced today that the company has designed and alpha-tested two new financial products based on the processing of public or private medical claims. The products offer a low-cost finance alternative as hospitals brace their balance sheets for the financial fallout.
"The COVID-19 pandemic is a global threat to physical health; but it's also a challenge to the financial health of the nation's hospitals and health systems," said Chris Langley, chief operating officer of Collateral Velocity. "Hospitals are expected to feel the financial impact of COVID-19 long after the pandemic subsides."
Collateral Velocity operates a platform that transforms the uncertainty of delayed claim payments into the certainty of accelerated cash. The company's patent-pending technology assembles pools of claims in real time and bundles them as short-term, fixed income securities to be sold to investors.
The benefit of the company's solution set to hospitals and health systems is greater access to lower-cost funding at a time when they need it the most. Hospitals are still unsure when, how and how much COVID-19 funding will come.
Currently, there is no Medicare inpatient diagnosis-related group for COVID-19 and many admitted patients require resource-intensive ICU treatment. Rates have also yet to take into account the rising cost of crisis staffing from the pandemic.
Langley said these issues represent a myriad of short- and long-term factors that will buffet hospitals as they scramble to deal with a surge of patients infected with COVID-19.
"Hospitals are canceling profitable elective surgeries to make way for costly COVID-19 patients as they manage higher staffing and supply costs," said Langley. "They will likely treat more unemployed individuals and suffer investment losses, which will have lasting long-term financial consequences."
Collateral Velocity is a portfolio company of Carolinas Fintech Ventures, LP (CFV), an early-stage venture capital firm specializing in financial technology. Collateral Velocity is working with a healthcare investment bank and a financial services-focused investment firm to enable the low-cost funding alternative.
"Hospitals and health systems are facing significant financial headwinds at this time," said Nat Clarkson, managing partner of CFV. "We're pleased to support talented entrepreneurs that are making worthwhile breakthroughs in financial technology that can help address pressing problems."
CFV works in affiliation with Queen City Fintech, an accelerator program in which Collateral Velocity was a participant. For more details, visit www.collateralvelocity.com.
Collateral Velocity, Inc.