Q4 2023 Earnings Summary
- Significant Growth in Patient Affordability Segment: PaySign's Patient Affordability claims volume increased 122% in 2023 and 215% in Q4 2023 compared to Q4 2022. This hyper-growth is expected to continue, with the addition of 10 new programs in the first quarter of 2024 , indicating strong momentum in this segment.
- Competitive Advantages Leading to Market Share Gains: PaySign is winning business from competitors due to its technological innovations, expertise, and focus on client needs. The company's disruptive offerings, such as identifying accumulators and maximizers to save clients money, and providing pricing transparency, have allowed it to secure programs from major pharmaceutical manufacturers.
- Ability to Capitalize on Industry Disruptions: Following a cyberattack on Change Healthcare, PaySign was able to secure and launch 8 new programs from 2 manufacturers in less than 10 days, adding substantial revenue and approximately 1 million additional claims to its 2024 claims volume. This demonstrates the company's agility and strong operational capabilities, positioning it favorably for future growth.
- Reduced Growth Prospects in the Plasma Business: PaySign's plasma clients are shifting focus from opening new centers to increasing plasma yield per center due to elevated financing rates. The company expects only 15 to 25 new centers in 2024, which may limit growth in the plasma segment.
- Unpredictable Revenue from Patient Affordability Programs: The size and profitability of patient affordability programs vary widely, with some programs generating extensive claims and others generating none, leading to uncertainty in future revenues from this segment.
- Lack of Clarity on Total Addressable Market for Patient Affordability: Management is unable to provide a clear estimate of the total addressable market for their patient affordability business, making it challenging to assess the growth potential and scalability of this segment.
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Winning in Patient Affordability
Q: Why is PaySign winning against competitors?
A: PaySign is winning because they've introduced disruptive offerings focused on payments and claims processing, bringing pricing transparency to the market. Their technological innovations and expertise have saved clients tens of millions of dollars, while competitors have watered down their offerings. Clients appreciate PaySign's focus and ability to move quickly to address issues.
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Claims Volume Growth
Q: What was the growth in claims processed?
A: PaySign reported a 122% increase in claim volume for 2023 and a 215% rise from Q4 2022 to Q4 2023, reflecting significant growth in their patient affordability business.
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Technological Advantages
Q: Does PaySign have a technological moat?
A: Yes, PaySign has developed proprietary technology and algorithms to identify accumulators and maximizers, creating a technological moat. This innovation differentiates them from competitors and contributes to their success in winning business.
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Size of Affordability Market
Q: Can you size the patient affordability market?
A: While PaySign does not have an exact figure, they believe the patient affordability market is larger than the plasma market, which has a total addressable market of around $120 million.
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Competition in Plasma Business
Q: Has competition changed in the plasma side?
A: There has been no significant change in competition in the plasma business. PaySign continues to compete with the same players, and some companies are focusing on reducing costs and improving yields rather than building new centers.
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Handling Security Breach
Q: How did PaySign handle the Change Health Care breach?
A: PaySign was minimally affected due to having three processor connections and strong partnerships. They quickly transitioned programs and onboarded new clients whose vendors were struggling, experiencing minimal disruption.
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How Affordability Programs Work
Q: How do patient affordability programs work?
A: These programs remove financial barriers for patients accessing expensive drugs. The process starts at the doctor's office or pharmacy, where co-pay coupons offset insurance payments, reducing out-of-pocket costs and helping patients gain and stay on therapy.
Research analysts covering Paysign.