I speak with health care practices on a regular basis. During these conversations, physicians usually ask a range of questions to help determine whether they should incorporate third-party patient financing into their practice.
Here are some of the most frequently discussed topics to give a better understanding of third-party patient financing and how it can benefit practices and patients.
When practices take on the responsibility of billing patients in-house, they incur the costs and risks associated with it as well, including late payments and uncollected accounts. Although nearly every health care provider has some degree of accounts receivable, in-house billing can have a significant impact on a practice’s bottom line.
When a health care provider considers the investment of time and resources to process payments, track down late payments and make collection calls, the cost can be considerable, not to mention having the potential to negatively affect referrals and public relations. When attempts to receive payment are unsuccessful, the resulting uncollected accounts can become a bad debt write-off that can further impact the practice financially. Improvement of cash flow and elimination of billing and collection of delinquent accounts are benefits that help health care practices stay healthy, too.
Financial needs differ among patients and the selection of a patient-financing company that provides a variety of options and meets the needs of patient is critical. Companies that provide options, such as financing for 6 months or 12 months, which is subject to credit approval, with minimum monthly payments required, on qualifying purchases, are popular. Companies that offer a quick application process and credit decisions and multiple processing options make the integration of third-party financing into a practice easier.
A key benefit of making financing available through a third party is a practice is paid for services up front, eliminating the need to bill patients. However, not all companies are the same, so be aware that some companies may pay the practice within 2 days whereas other companies can take longer.
An often-overlooked advantage of patient financing is that it also can be used as a marketing tool for the practice. Most patient-financing companies provide free promotional materials, including patient brochures and counter displays. Health care practices can highlight the benefits of financing in their new patient materials, website, and marketing and advertising activities. When patients know financing options are available, they may be more likely to seek care at the practice rather choose one that does not.
Disclosure: Morris reports he is a paid employee of CareCredit.