JPMorgan Chase said May 17 that it is buying Philadelphia-based healthcare payments technology company InstaMed, according to CNBC.
The bank agreed to pay more than $500 million for InstaMed, which has about 300 employees, according to the companies.
A joint press release says the transaction will expand JPMorgan Chase's payment services designed for patients, healthcare providers and insurers.
"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,” said Takis Georgakopoulos, global head of wholesale payments at JPMorgan Chase.
In explaining the decision, Mr. Georgakopoulos cited the size of U.S. healthcare spending, which CMS put at $3.5 trillion in 2017 and projects will reach nearly $6 trillion by 2027.
"One of my favorite stats is approximately 90 percent of all health providers still use paper billing," Mr. Georgakopoulos told CNBC. "What InstaMed has created is both the platform and the network that allows them to simplify and streamline payments across payers, providers and consumers across the ecosystem."
Bill Marvin and Chris Seib, former Accenture consultants, founded InstaMed in 2004 to simplify healthcare payments. The company now owns and operates comprehensive technical and operational infrastructure.
Mr. Georgakopoulos told CNBC the business will be part of JPMorgan Chase's wholesale payments division, and the bank will offer InstaMed to its clients, and possibly integrate it with its JPMorgan Chase bill-paying apps.
Read CNBC's full report here.
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