The real threat to healthcare ISOs isn’t competition – it’s irrelevance

By Lisa Brooks Carmichael, vice president, healthcare partner management

For years, independent sales organizations (ISOs) have approached healthcare as just another vertical – maybe a bit more compliance, a few integrations, and a longer sales cycle. But beneath the surface, something more fundamental is shifting market demand: healthcare payments are no longer about transactions. Successful industry players take control of revenue cycle management and meet their healthcare clients’ needs head on – leaving ISOs behind.

The center of gravity has moved

Traditionally, ISOs have owned the point of payment: card present, card not present, gateway, and settlement. But in healthcare, the “moment of payment” is no longer a single event. It is a series of questions:

• When is the patient billed?
• How is the balance presented?
• What financing options are offered?
• How many reminders are sent?
• When does an account move to collections?

These decisions happen upstream of the transaction and are increasingly owned by Revenue Cycle Management (RCM) platforms* and healthcare SaaS providers. As payment control shifts to whoever owns the workflow, the ISO’s role naturally gets reframed as an enablement layer inside someone else’s platform.

Payments have become a feature, not a product

RCM companies do not think about payments the way ISOs do. To them, payments are not a revenue stream – they are levers to accelerate cash flows, increase yield per patient encounter, reduce days in accounts receivables and improve collection rates.

In that context, payments are simply embedded into a broader financial workflow. This creates a dangerous reality for ISOs, while healthcare clients receive less optimal solutions. When payments become a feature, the provider that controls the workflow controls the economics, and healthcare clients don’t get the support they need to reduce complexity in their financial operations.

Where is the gap? Many ISOs still lead conversations with healthcare prospects focused on familiar tools:

• Competitive pricing
• Hardware solutions
• Gateway access
• Basic integrations

While this approach may work in other verticals, this approach is insufficient for the needs of healthcare providers and hospital systems. These finance leaders are not asking, “Who can process this transaction for less?” or “Who can help me collect more, faster, with less friction for the patient?” Instead, healthcare clients are seeking solutions that optimize their overall workflow outcomes, in which payments acceptance is only one tool in a larger bundle of financial tools.

The rise of the healthcare financial stack

Because of this demand, a new layer in healthcare is emerging. Payment acceptance capabilities are table stakes and no longer a competitive differentiator. RCM platforms, EHR vendors, and healthcare SaaS companies are rapidly building or acquiring capabilities to build financial engagement stacks that blend:

• Billing
• Payments
• Patient communication
• Financing
• Analytics

These players are quickly leaving ISOs behind, as they seek sponsorship, infrastructure, and configurable economics – not the sales channel of the past.

If ISOs continue to position themselves as transaction providers, they will be pushed further downstream, competing on price and margin. To stay relevant, they need to move upstream. This means:

• Understanding revenue cycle workflows, not just payment flows
• Aligning with healthcare-specific outcomes like net collection rate and days in accounts receivable
• Supporting flexible models such as payment facilitation and integrated financial experiences
• Building partnerships with RCMs, not competing with them

In short, they must evolve from processors to participants in the revenue strategy.

The strategic shift is already underway. Some ISOs have started to make this transition. They are partnering with RCM firms instead of selling around them, designing healthcare-specific pricing models tied to performance, and supporting more complex fund flows and patient payment experiences. It’s time for more ISOs to take this lead and bolster their healthcare payments strategies to seize massive opportunities for partnership and growth.

Taking the leap

The healthcare payments opportunity is enormous, but it will not be won at the point of sale – rather, at the point of influence. Right now, that influence is moving away from ISOs. The question is not whether the market is changing, but whether the ISO model will change with it to meet market expectations – broadening offerings, taking ownership of provider payment strategies across patients, payors, vendors, and internal services, and positioning themselves as indispensable by partnering with RCM software providers.

Platforms that control workflow will continue to control payments. ISOs that want a scalable role in healthcare must choose whether they remain downstream or reposition themselves as strategic participants in the revenue cycle. That’s where we come in – Elavon helps position payments as the lever for vertical expansion and durable growth in healthcare. Connect with us to learn more.

* By selecting this link, you will leave Elavon content and enter a third-party website. Elavon is not responsible for the content of, or products and services provided by this third party, nor does it guarantee the system availability or accuracy of information contained in the site. This website is not controlled by Elavon. Please note that the third-party website may have privacy and information security policies that differ from those of Elavon.