Patient Financing Options: In-House vs. Third-Party

When a patient is deciding whether to move forward with care, cost is often the sticking point. Your practice can help ease any hesitation by offering financing — either through payment plans you manage yourself (in-house financing) or through a third-party financing partner.

While both approaches can help patients manage costs, third-party financing may offer a simpler path for practices that want to reduce risk, administrative burden and collections work.

Here’s how the two options compare and how to decide which is right for your practice.

What Is Patient Financing?

Patient financing refers to payment options that allow patients and clients to spread the cost of care over time, rather than paying the full amount up front. These options can take different forms — from simple installment plans offered by a practice to third-party programs that provide access to credit.

By offering financing, practices can give patients and clients more flexibility in how they pay and help them proceed with recommended care.

Benefits of Patient Financing

Patient financing can offer several benefits to both practices and patients, including:

Lower barriers to care

In 2024, 11.6% of U.S. adults ages 18 to 64 lacked health insurance, according to a report by the Centers for Disease Control and Prevention’s National Center for Health Statistics.¹ Uninsured patients may be less likely to seek care when they need it, which can make it difficult for them to manage chronic illnesses.

Even patients with insurance may be in a high-deductible health plan (HDHP) and have trouble paying their out-of-pocket costs. In 2023, just over 50% of private industry workers participated in HDHPs.² And in 2024, the median annual deductible was $2,750.³

Providing patients and clients with flexible financing options could help them embrace care they want or need.

Cost management

According to a 2025 Gallup survey, nearly 30% of Americans cite the cost of healthcare as the “most urgent health problem” facing the country.³

Moreover, KFF, a nonpartisan nonprofit that does U.S. health policy research and polling, found that about 1 in 3 adults skipped or postponed getting healthcare they needed in the past 12 months because of cost — and 3 in 4 uninsured adults under age 65 went without needed care due to the cost.⁵

Patient financing can help ease the burden on patients and clients by allowing them to spread out the cost of care over time.

Alleviating stress

Stress from financial concerns can impact physical, mental and emotional health.

For example, a study published in the Journal of Family and Economic Issues found that higher financial worries were associated with higher psychological distress, particularly among lower-income households.⁶

Having access to a convenient way to pay for care may help ease some of that financial stress. For patients worried about affording a health-related expense, a line of credit can offer a greater sense of flexibility and control.

It may also feel empowering for patients and clients to fit wellness costs into their budgets and pay in ways that work for them and their families.

What Are the Financing Options for Patients?

Patients and clients may use a range of payment methods for health and wellness expenses not covered by insurance. Some are arranged independently, such as credit cards or loans, while others are offered or facilitated by the practice.

For providers evaluating patient financing, the main distinction is usually between in-house financing and third-party financing. But in practice, patients and clients may have several options for payment.

Pay in full

If they have the means, patients and clients can pay the full cost using cash, debit, a check or other payment methods when they receive the bill. While this is often the simplest option, it may not be realistic for higher-cost procedures or ongoing care.

Credit card

Patients and clients can pay for care using credit. This can be done with a credit card they already have.

“Buy Now, Pay Later”

Patients and clients can also opt to use a “Buy Now, Pay Later” (BNPL) plan, which typically splits a bill into several equal payments, spaced out over weeks or months (depending on the terms).

In-house financing

Some practices offer their own payment plans, often referred to as in-house financing.

These plans may be structured as installment agreements that allow your patients or clients to make fixed payments over time until the balance is paid in full. Others may take the form of recurring payment arrangements, where your patients or clients pay ongoing costs at regular intervals — sometimes without a fixed end date.

In-house plans can give practices more control over payment terms, but they also require the practice to manage billing, collections and other administrative responsibilities.

Third-party healthcare credit

Just like standard credit cards, a healthcare credit card is a revolving credit line. The patient or client is approved for a credit limit, which they can borrow against as needed. As they repay some or all of the balance, that amount of credit becomes available again. There is no set end date, and the account remains open as long as the account remains in good standing.

Payment plans via partner tools

These plans allow the patient or client to pay for care over time, but they are facilitated by an outside financing partner. That partner pays the provider in full, up front, on behalf of the patient — and then the patient is responsible for paying the financing partner back under the agreed-upon terms.

In-House Financing vs. Third-Party Patient Financing

In-House Financing Trade-Offs Providers Shouldn’t Ignore

It’s natural to want to do everything you can to help your patients manage the cost of treatment. However, you should be aware of what in-house financing entails before offering it to your patients and clients.

Some of the potential drawbacks include:

• Having your cash tied up, plus delayed revenue. When you allow patients or clients to spread out their payments, it means you wait longer to be paid in full.
• Bad debt and write-offs. If a patient or client does not fulfill their obligation to pay for services, you may be saddled with that bad debt.
• Collections strain and patient relationship risk. Having to follow up with patients or clients who are late with payments is awkward at best. At worst, it may result in patients becoming reluctant to return to your practice. Outsourcing to collections can also sour the patient relationship and create an additional expense for your practice.
• Administrative overhead. Your staff is likely already bogged down in insurance paperwork and patient health records. Adding financing contracts and billing reminders to their plate could create workday strain or increase wage costs because you need to pay them overtime.
• Legal ramifications. Anytime you get involved with lending, you must adhere to applicable federal, state and local lending laws and regulations. This may involve a steep learning curve for staff, and not following the rules properly can have legal consequences.
• Inconsistent approvals. Deciding which patients or clients get approved for financing, and for how much, should be done uniformly — not arbitrarily based on who is at the front desk on a given day.

Third-Party Patient Financing Benefits When You Want to Reduce Risk and Work

If you opt for third-party financing, you’ll contract with an outside company that issues a credit card or line of credit to the patient or client to pay for health and wellness services.

A financing partner can offer your patients flexible financing while taking the risk off your health system or practice. Choosing a reputable financing partner is important because it will impact the patient experience and reflect on your practice.

The pros of contracting with a financing partner could include:

• A more predictable funding pathway. Because payment comes from the financing partner — within two business days with CareCredit — you don’t have to carry receivables or wait on installment payments over time.
• Less collections burden on your practice staff. Once a patient or client agrees to a financing plan, any future correspondence regarding late payments comes from the third-party partner.
• A clear monthly payment option for patients at the time of case acceptance. Supported by partner resources, you’ll be able to guide your patients or clients through how financing will work and what their monthly bill will look like. Being transparent and empathetic to patients’ financial concerns while offering a clear solution can help empower them to move forward with treatment.
• A more consistent process across staff and locations. Using the same third-party platform can help standardize workflows across your practice. It also makes it easier for staff to collaborate and access shared data for reporting.

Healthcare Financing Options That Improve Case Acceptance

Patient financing could be a game changer for your practice, from both a business and a patient-experience perspective. Potential advantages include higher case acceptance, larger treatment plans and the ability for patients to schedule care sooner.

For example, in 2023, 45% of CareCredit cardholders returned to the same practice and reused financing in the same year. ⁶

In addition, Synchrony’s Healthcare Journey Research Consumers and Providers study found that 3 out of 4 patients surveyed said they would seek additional health and wellness services if they had ways to pay for them.⁷

Financing Options for Patients: Real-World Scenarios

Whether you run a small practice with limited staff or a multilocation health system, financing could be a helpful solution.

Here are a few examples of when third-party financing may be especially useful:

• High-cost treatment decision. An orthopedic surgeon wants to present a patient with a high-ticket treatment plan totaling $10,000. The patient is eager to pursue treatment but is constrained by their budget.
• Multilocation consistency. A multilocation cosmetic dermatology practice needs consistent approvals and scripts so its staff can offer patient financing in a uniform way.
• Limited administrative capacity. A small ophthalmology practice has limited staff and no collections bandwidth. It’s looking for a solution to help its patients pay for eye surgery.
• Transitioning away from in-house plans. A hearing aid provider currently offers in-house plans but no longer wants to deal with late payments or debt write-offs.

Third-party financing allows each of these practitioners to give their patients and clients another payment option without adding to their practices’ administrative burden.

When a third-party financing partner offers a consistent process, an easy-to-use platform and centrally accessible partner resources, it gives you the opportunity to offer financing without becoming a lender.

Note: Every practice is unique, and in-house financing may be a good fit for some providers. For example, providers who have ample capital and prefer to manage receivables on their own may gravitate to an in-house solution.

Patient Healthcare Financing Options: Decision Criteria + Checklist

To help determine which financing approach may be the best fit for your practice, use this checklist to evaluate your needs:

• Do you want to avoid carrying receivables?
• Can you tolerate default risk and write-offs?
• Do you want to avoid using staff time for invoicing, reminders and payment failures?
• Do you want a partner to help ensure a compliant process and provide the required documentation?
• Do you need a consistent financing process across providers and locations?
• Do you want an easy way to quote monthly payments?

If you answered yes to most of the questions, a third-party financing partner may be right for you.

Quick decision guide: Is third-party financing right for my practice?

You may want to consider third-party financing if:

• Cash flow predictability matters to you.
• Your practice is growing, or you operate multiple sites already.
• You don’t want collections to impact patient relationships.

Why Many Providers Choose CareCredit for Patient Financing

When it comes to third-party financing for health and wellness, CareCredit is an industry leader. In fact, 1 in 10 adult residents have or have had a CareCredit card.⁸ Some of its key advantages include:

• Helping patients pursue care. Providers can recommend more advanced, comprehensive or frequent preventive care options, knowing that patients and clients have a way to pay — rather than limiting recommendations to immediate needs.
• Allowing practices to avoid taking on lender-like risk and workload. Once the patient financing is approved, CareCredit initiates payments to your practice and manages the patient repayment process.
• A consistent experience, a scalable process, support and resources. With more than 290,000 providers and retail locations in its network, CareCredit is a trusted financing partner across industries. Part of the reason why — besides being in business for 35-plus years — is that CareCredit has an intuitive financing platform, training support and extensive marketing and patient education resources.

FAQs About In-House vs. Third-Party Financing

Still curious about the details between in-house and third-party financing? Here are answers to some frequently asked questions.

What’s the difference between in-house patient financing and third-party financing?

In-house financing is a payment plan managed by your practice; your team sets terms, invoices patients, tracks payments and handles delinquencies/collections. Third-party financing is offered through a financing partner (such as a healthcare credit card or partner-facilitated payment plan), where the partner pays your practice (often quickly) and the patient repays the partner under agreed terms.

Is third-party patient financing better for my practice than offering my own payment plans?

It can be, especially if you want to reduce administrative workload and financial risk. Third-party financing can help with fast, predictable payments, less time spent on billing and collections and built-in tools and training that can create a consistent process across staff and locations. In-house plans may work best for practices with enough capital and capacity to manage receivables and compliance internally.

How can offering patient financing increase case acceptance and help patients move forward with care?

Financing can remove cost as the main barrier by letting patients spread payments over time, which can be especially helpful for uninsured patients or those with high deductibles. Patient financing can support higher case acceptance, larger treatment plans and fast scheduling, because patients can see a clear monthly payment option at the time they’re deciding whether to proceed.