Patient Financing: 7 Benefits for your patients and practice

In today's healthcare landscape, patients are shouldering a greater burden of out-of-pocket costs, including larger deductibles, increased medication costs and other unexpected costs of medical care, according to a 2022 Synchrony Lifetime of Healthcare Costs report.¹ Patient costs rose 10% between 2020 and 2021, and a report by Kalorama Information predicted a similar rise in costs between now and 2026.²

Patient financing allows patients to pay their healthcare costs over time, in installments and in various ways. Healthcare systems that offer financing are more likely to maintain a healthy accounts receivable and improve patient satisfaction.

Patient financing in healthcare can take several forms:³

• The healthcare system or practice can act as a lender. The downside of this is that it can lead to a loss of revenue if patients don't pay.⁴
• A health and wellness credit card
• A line of credit
• Third-party financing, or patient assistance programs (PAPs). These financial assistance programs may be sponsored by pharmaceutical companies, nonprofits or and state-funded programs for people of low income or financial hardship.⁵

Below, we outline some of the many benefits that offering patient financing can have for everyone involved in medical care.

1. Manageable Payment Options

By offering patient financing, healthcare providers enable patients to break down their medical costs into manageable chunks through payment plans. Additionally, patient financing has other benefits, according to Finturf:³

• It increases patient volume. Satisfied patients not only stay loyal to a provider or practice, they also refer friends and family.
• It reduces the burden of collections. Patient financing options make it less likely that patients' bills will go to collections, reducing the burden of billing and collections procedures.
• It boosts revenue. Patient retention and higher collections can increase revenue.

2. Higher Patient Satisfaction

Any way that doctors and healthcare systems can streamline the out-of-pocket expenses before receiving their services made them more likely to get care.⁸

3. Greater Patient Loyalty

Patients who have a positive experience, both in the clinical visit and in the payment process, are more likely to return to their provider. Ninety-three percent of healthcare consumers in the El Studios survey said the billing experience could make or break their decision to return to a healthcare provider, and 90% reported that a good financial experience plays a key role in deciding to stick with a medical provider.⁶

4. Expanded Ability to Provide Necessary Care

It just makes sense that when patients can seamlessly pay for their care, they are more likely to return for necessary treatments, adhere to healthcare plans and follow through on doctors' advice. A 2019 TransUnion survey found that 62% of respondents said knowing their out-of-pocket expenses before receiving their services made them more likely to get care.⁸

5. Easier Payment Collection

By offering patients financing options, doctors increase their chances of collecting payment. In fact, TechTarget's RevCycleIntelligence newsletter points out that the most common reason patients don't pay is a lack of flexible payment options, not an unwillingness to pay.⁹

Offering financing options also opens the door to important financial conversations with patients about their burden, which increases the likelihood of receiving payment.⁸

6. Access to More Extensive or Specialized Care

When patients can't afford primary care, they often treat their health issues “reactively," either in emergency departments or by triaging their health needs for the most pressing, thus not treating all their health needs. Patient financing allows providers to offer preventive care, including specialized care. This can keep patients out of emergency rooms and allow them to be proactive about their health.¹⁰

7. More Patient Referrals

Satisfied patients are much like consumers in any industry—if they like the care they're receiving and are happy with the payment process, they're more likely to refer their friends and family to their provider. Similarly, in a survey by PYMNTS, 63% of patients reported that they would switch healthcare providers if they were not satisfied with the payment experience.¹¹

How to Begin Offering Patient Financing

Research Financing Companies

There are many patient financing companies on the market. Providers should do their research and look for companies that offer:¹²

• A solid reputation, with experience to back it up. Whether through word of mouth or research alone, seek companies that stand the test of time and have the reviews to show for it.
• A swift payment process. Revenue should be coming in within a couple of days.
• Fast but thorough application and approval process. Dragging out patient applications could discourage them from using the financing option. However, you don't want shady application practices, either.

Train Staff

Communication and transparency around financial issues are very important to the patient satisfaction process. When staff are trained to explain the financing options and anticipate patient concerns and needs, providers are more likely to receive payments in a timely manner.

Market or Promote Patient Financing Options

Whether through pamphlets, information on websites or patient portals, or emailed information, providers should make financing options available and visible to patients on a regular basis. Questions of finances can be sensitive and even embarrassing for patients to bring up, so make it easy on them.

Consider In-House Financing Options

If it's right for the healthcare practice to have an in-house financing option, this can create patient trust, loyalty and ease of payment. Practices with in-house financing options should maintain a current list of eligibility criteria available to patients and have strong policies and guidelines that are in writing, to be in compliance with federal regulations.⁴

The two main forms of in-house financing are:⁴

• Direct Pay: The patient pays in installments for their services directly to the provider.
• Co-Signing: The patient offers up their credit information and pays for part of the procedure upfront.

Helping patients finance their care can improve patient satisfaction, loyalty and practice revenue. It can also increase patients' access to necessary healthcare services.