What is The Best Patient Financing Option For Your Practice?
Most patients carefully plan out their monthly budgets. When an unexpected medical bill arrives, they feel stressed out and overwhelmed. How will they afford the bill? Estimates suggest that a quarter of baby boomers, Gen Xers, as well as nearly a third of millennials, avoid seeking care due to costs. This problem is amplified by the rise in high-deductible insurance plans, which means patients are paying a larger portion of their bills. Practices understand that patients need help in this area — but what is the best way forward?
Offering patient financing is one way that practices can address this need. There are two main types of patient financing: an internal program or a third-party solution. Practices that create internal patient financing options typically provide patients with the ability to make payments and don’t usually charge interest on the balance. This option puts a large strain on the practice both in terms of the financial burden as well as the staff time required to monitor the plan and follow up on late or declined payments.
The other option is third-party financing, which allows practices to offload the risk to a trusted partner while still providing patients with flexible financing. Understanding the benefits of patient financing, evolving patient expectations and what to look for in a solution can help you make the right decision for your practice.
Patient Financing: What You Need to Know
Patient financing is an attractive option for patients and it eliminates a major hurdle that stands between patients getting the care they need, which is how to pay for it. A third-party partner can deliver customized payment programs that are tailored to a patient’s needs, ability to pay and any relevant risk factors.
Not all patients qualify for traditional third-party financing, which is why it’s important to work with a partner that provides 100% approval rates. This allows all patients, regardless of their credit score or credit history, access to payment options that make care affordable.
Patient financing platforms allow patients to quickly view their payment plan once it is set up, make extra payments and monitor their progress on paying down balances over time.
Patient Financing Benefits
When reviewing payment plan options, it’s important to consider the benefits to your patients. One benefit is that patients are empowered to spread costs out over time, fit those costs into their monthly budget and feel in control of their healthcare.
Patients who know they have upcoming costs can anticipate those needs and plan for them in a monthly budget, which is a win-win for the practice and the patient. Additional patient benefits include the following:
Lower financial stress. A survey showed that regardless of the economic climate, money and finance have remained a top stressor since 2007. What’s more, is that stress related to financial issues could have a significant impact on Americans’ health and well-being. Giving people a simple way to pay for healthcare can help reduce this stress. Practices that offer 100% financing remove this stressor on the front-end for their patients, enhancing the overall patient experience.
Alternative to traditional lending options. In the past, some patients sought help from traditional lenders, but this option isn’t always available for those with credit challenges. Estimates show that as many as 40% of patients seeking credit from top healthcare lenders are denied. Applying for a loan can be stressful, documentation intensive, and decisions can take a long time. With this new model, these stressors are avoided.
Fewer delays in treatment. Patients delay treatment for a variety of reasons, but among the biggest is affordability. Doctors know that delaying treatment can negatively impact a person’s health, and practices are dedicated to keeping people healthy. Payment options give patients the option to get care now and pay later.
Patient financing is clearly good for patients, giving them options to make healthcare affordable. But what about the practice? An internal financing program can weigh practices down with high administrative costs, bad debt, and potential risks. However, working with a third-party partner can provide all the benefits to your practice, without the risk.
Benefits For Your Practice
Practices that provide personalized financing options without the burden of administering that program in-house experience many benefits. Not only do they build stronger relationships with patients by saying, “we’re going to help you pay for this,” but they also benefit from improved cash flow and stronger financial health. Benefits include:
Better use of your team’s time. Having staff dedicated to dealing with patient collection-related tasks is a huge drain on your business. Getting this task out of the practice frees up employees to focus on other work that improves the patient experience.
Cash flow improvements. Practices that get involved in patient financing are essentially providing credit without any interest or return on investment. At the same time, your expenses including payroll, equipment, and supplies continue to add up. Every month in which balances aren’t paid promptly puts additional strain on your business. Some financing partners will give you the option of receiving the funds upfront, which greatly improves cash flow.
Reduction in risk of bad debt. Bad debt is a problem for even the healthiest of practices. Employees are logging many hours collecting debt and at the same time, you have the cash flow to consider. Partnering with the right financing provider allows you to mitigate potential risks and improve the financial health of your practice.
Increase in patient satisfaction. Happy patients will tell friends and family members about your practice. When they meet somebody looking for a new doctor, they will quickly share your information as a service to their friend. Reducing worry about how to pay for care through payment options allows you to build goodwill with patients and make it easier for them to refer you to the people they care about.
Tool for retaining patients. Patients don’t like feeling stressed out about unexpected healthcare costs. Once they realize that you have easy financing options, they will be more likely to seek care from your practice versus one that does not have flexible payment options available.
Flexible payment options benefit both the practice and its patients, but how can you select a partner that is right for your practice? Money is a hot topic for patients, and when you have a partner that operates with the same dedication to patient care as your practice does, you can provide a service that is a natural extension of your business.
What to Look For in a Solution
Every patient has different financial needs, which is why it’s important to select a healthcare financing partner that offers flexible options. You need a complete healthcare payment system that provides your practice with a variety of payment capabilities — all in one place. For example, in addition to providing patient financing, you can offer mobile payment options and “card on file” technologies. A few important considerations include:
User-friendly and efficient online payment options. People like to pay online and by text. When a person pays their agreed monthly payment, you want that process to be simplified and automated if possible.
Personalized options. Patients want to feel truly known by their providers, and this demand extends to payment options. They don’t want a one-size-fits-all approach, but one that is customized to their needs and budget.
Easy approval. Filling out large amounts of paperwork only to get rejected is frustrating for patients. Instead, work with a partner that approves 100% of patients regardless of credit history, giving all your patients access to the tools and resources they need.
Patient support services. Patients will view their financing experience as an extension of your practice. If they have a problem with the financing, that will reflect poorly on you. Select a partner that is highly qualified and courteous, that has the same level of compassion for patients as your practice does.
Moving Forward With Success
Adopting a patient financing program is a powerful way to help patients manage the rising cost of healthcare while simultaneously improving your practice’s financial stability. But not all third-party partners are created equally, so it’s important to understand even the smallest details about their patient financing program options.
The rewards of selecting the right partner are great and include greater cash flow, improved patient experience, and more patient referrals. As a result, you will improve your financial stability while at the same time building stronger and more meaningful relationships with your patients.