Patient financing: How it helps your patients and practice

In today’s insurance environment, many patients are facing higher out-of-pocket costs, including insurance deductibles and co-pays that can make moving forward with urologic treatment a challenge. A recent analysis by USA Today (published Dec. 29, 2014) found the minimum deductible available for a family health insurance plan at the silver level had increased by as much as $5,000 over the previous year.

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While some patients are seeing lower premiums, co-insurance payments are on the rise with self-pay portions varying from 10% to 40% under the Affordable Care Act. In addition to these costs, patients with insurance, as well as those without coverage, still have to manage the cost of services not covered under their plans.

Unfortunately, when a practice takes on the responsibility of billing patients, it also incurs the cost and risk associated with it as well-including increased overhead, late payments, collections, and increasing accounts receivables. Third-party financing programs, as discussed in this article, can provide an effective solution by offering special financing options that have been used successfully with practices and patients.

Third-party patient financing is actually quite common in many health care specialties, including ophthalmology, plastic surgery, dermatology, podiatry, and dentistry. A third-party program can be very simple to implement. Patients apply for financing and, if approved, can immediately access their credit to pay for treatment with monthly payments over time. By offering third-party financing, practices can provide a variety of attractive payment options that help more patients get the care they need, and practices can benefit as well.

Patients often ask physicians for help with billing and extending time to pay the practice, and physicians are looking for solutions to address these requests. There appears to be a trend toward third-party patient financing options in the current economic environment. It is estimated that 3% to 5% of urology practices are offering and utilizing these types of options.

NEXT: Benefits to your practice and patients

Benefits to your practice and patients

The benefits of making a third-party patient financing program available include increased treatment acceptance, reduced accounts receivable, reduced collection costs, and improved cash flow. Unlike lending institutions that charge consumers interest for the opportunity to make payments over time, when practices bill patients in-house, they make no interest. In the meantime, overhead costs including payroll, rent, supplies, and equipment continue to add up, while fees have not yet been collected. This can create a cash flow challenge with monies tied up in accounts receivable.

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When you partner with patient financing programs and their financial professionals, you can receive payment as soon as a couple of days and your practice is able to step out of the financial relationship, giving you and your staff more time to focus on practice-building activities and providing excellent patient care. 

The greatest benefit that patients enjoy with special financing options is the ability to move forward with the care they need immediately, while paying convenient monthly payments. In addition to providing immediate access to care, many financing programs feature added benefits to the patients, such as no annual fees.

Some programs provide patients with an ongoing line of credit, which is used as a financial resource to pay for additional care at your practice or at other health care providers that accept the same payment option. Many liken it to a convenient health care credit card.

An often-overlooked benefit to third-party financing is the ability to use it as an effective marketing tool for your practice. If patients know that special financing options are available, they may be more likely to seek care at your practice versus other practices that do not offer these types of programs.

Most patient financing companies provide free marketing materials, including patient brochures that can be strategically placed in waiting areas and consultation rooms to help educate your patients. Some companies have digital tools available, including buttons and banners, that can be placed on your practice website to educate patients about financing options, which can save time for you and your staff. For your tech-savvy patients, some providers also offer options to apply online through their smartphones, tablets, and computers.

NEXT: Choosing the right program

Choosing the right program

Because financial needs differ from patient to patient, it is important to select a patient financing program that provides flexibility and meets the needs of today’s patients. Programs that provide special financing offers such as 12 months deferred interest-in which the patient pays no interest charges as long as the balance is paid off by the end of the promotional period-are helpful and popular with patients.

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When selecting a plan, consider the initial costs to patients. Plans that feature no upfront costs, annual fees, or prepayment penalties will always be more attractive. Programs that offer a simple and quick application process, immediate credit decisions, and multiple processing options can make it easier to integrate third-party financing into your practice.

Another consideration when selecting a program is when your practice will be paid. A great benefit of offering financing through a third party is that your practice is paid for your services upfront. Not all programs are the same. One program may deliver payment in 2 business days, while others can take longer to pay your practice. So be sure you clearly understand the program’s policy.

Also consider how the payment will be delivered. Some programs offer direct deposit into an authorized account, while others simply mail a check to the practice, increasing the amount of time before payment is actually credited to your account. Ideally, the less time you spend on documentation and paperwork to get compensated, the healthier it is for your practice overhead.

Conclusion

Adding a third-party patient financing program is an easy way to help patients manage out-of-pocket costs and get the urologic care they need. Improved cash flow, reduced accounts receivable, and reduced billing and collection costs make offering a third-party financing program a smart decision to help enhance your practice’s financial health.

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