Benefits of Medical Financing for Practices & Healthcare Offices
Medical costs have fundamentally transformed over the past decade triggering an upsurge in the need for patient financing. Insurance companies are charging more and covering less for procedures, leaving patients to bridge the gap with their own funds for their medical bill. According to research by the Board of Governors of the Federal Reserve system, 47% of Americans can’t afford an emergency medical expense of $400 or more. The average medical expense for an emergency room visit is $2,000.
If a patient has an emergent need to be addressed immediately, or they want to undergo an elective procedure, they’ll likely not have the means or the available credit on their personal credit cards. This is what makes access to patient financing, with manageable monthly payment options, a necessity for patients and for practices treating them.
What is Medical Financing?
In most cases, medical financing uses a patient’s credit to finance the cost of any medical procedure. Healthcare financing is integral to giving patients viable options to finance their medical costs. Medical financing is the only way to bridge the gap when it comes to procedures that a patient can’t pay immediately in their time of need.
As the face of health insurance coverage continues to change, more and more people need to find solutions to the unforeseen and unexpected financial burden that they face. Any patient can find themselves in a situation that requires medical financing for an emergent issue. This is why your practice needs to offer a healthcare financing option.
How Does Healthcare Financing Work?
There are several medical financing options available. What your practice should offer depends on both your patients’ needs and what your preference is when interacting with financial institutions. The top options in medical financing are:
- Utilizing dedicated medical finance lenders. These companies offer a way for patients to pay back healthcare providers without worrying about paying large amounts of money out-of-pocket prior to a procedure. They also protect against interest rate hikes or penalties for paying off a loan more quickly, making this a popular medical financing option.
- Payment solution platforms. These technology platforms offer patient payment plans and other financial services that allow patients to receive the needed treatment or care and make payments over time without utilizing traditional third-party financing.
- Medical credit card provided by larger banks. The use of a medical credit card for medical care has become a staple in the healthcare industry and patients recognize the banks that provide the credit lines. The interest rate is based on your credit score but a patient with good credit can often have a lower interest rate than their personal credit card. A portion of patients prefer this method as it does not include an origination fee often associated with a medical loan.
- Low interest personal loan services. Patients can do their own research and choose a company they are more familiar with or have heavily researched to assist them with their unforeseen healthcare costs. This leaves your firm to juggle several different loan services instead of streamlining your firm with one financing solution. Each financing company will have its own terms for a secured loan and variables will include factors such as a patient’s credit score history and existing debt.
Advantages to Offering Medical Financing
Patients need healthcare financing when they are invulnerable, and often impossible situations. By choosing a medical finance option for your practice, you protect your patients from a predatory market that can charge exorbitant interest fees on loans with a large out-of-pocket cost upfront.
Medical financing options give healthcare practices the ability to maintain their overhead costs while waiting for a patient to pay for a procedure. Having a finance option also puts your firm ahead of other providers who don’t have a finance option available.
Third party services also take the bill collecting out of the hands of office staff and allow for an increase in patient engagement. They can also provide better treatment options for patients that fit better into their budgets.
Choosing Medical Financing
The overall goal of medical financing is to give patients the money that they need to get the procedures that they need whether that is by means of a medical financing lender, payment solutions platforms, health care credit card or a personal loan. Healthcare financing makes patients feel comfortable with their options while also improving your communication with lenders and giving your practice the overhead it needs to continue operating smoothly.
Offering medical financing will allow your patients to focus on their health and less on navigating the private medical financing world. This frees you up as a provider to focus on the increasing patient engagement when patients need care the most. Medical financing is important to running a practice smoothly and delegating patient collections frees up any practice to focus more on patient care and less on finance.