Many patients today may face higher out-of-pocket costs, including increased deductibles and self-pay portions, that can make moving forward with health care challenging. In managing the cost of care, patients appreciate and have even come to expect some level of assistance from their health care practices. In turn, some practices try to help by billing patients in-house. However, when a practice takes on the responsibility of extending credit to patients, it also incurs costs and risks, including potential late payments, bad debt and uncollected accounts.
Health care practices looking for effective ways to help patients move forward with care should not overlook the value of having financing options available through third-party patient financing programs. Providing a variety of attractive payment options not only helps more patients get the health care they need, but also provides other important and valuable benefits to both the practice and patients.
Benefits for practices
When a practice bills patients, the practice makes no interest on the money sitting on the books. In the meantime, overhead costs, including payroll, rent, supplies and equipment, continue to add up while fees wait to be collected. This can create a cash flow crunch, with more money tied up in accounts receivable than coming into a practice.
The benefits of making a third-party patient financing program available include a potential increase in treatment acceptance, patient satisfaction and retention and payment within 2 business days. With third-party patient financing programs, more patients can get needed care with monthly payments that fit budget and lifestyle. Health care practices also benefit by reducing their accounts receivable and increasing cash flow.
There is immediate payment and health care practices are able to step out of the financial relationship, giving staff more time to focus on practice building activities. Third-party financing also can be used as a marketing tool. If patients know special financing options are available, then they may be more likely to seek care at that practice compared to another practice where it is unavailable.
Benefits for patients
The biggest benefit patients enjoy when special financing options are available is the ability to move forward with care while making monthly payments. Many financing programs feature added benefits to the patients such as no annual fee. Some programs provide patients with a revolving line of credit so depending on the financing program selected, patients may have an ongoing financing resource to pay for additional care at a practice or with another health care providers who also accepts the same payment option. This would be subject to credit approval and minimum monthly payments are required.
The addition of third-party patient financing program to financial policies makes it easy to let patients know a payment solution may be available that fits their budget and lifestyle. This may allow patients to get procedures they want or need. Improved cash flow, reduced accounts receivable, billing and collection costs also make offering a third-party financing program a smart decision to help maintain a practice’s financial health.
Disclosure: Morris reports he is a paid employee of CareCredit.