Increasing Collections, Satisfaction with Zero Interest Third-Party Payment Plans


You have likely heard the statistics – and perhaps experienced them first hand in caring for an aging parent – Americans over age 65 make up 15 percent of the population today but account for one-third of overall healthcare spending. An estimated 80 percent of seniors have a least one chronic condition.

Fidelity Investments estimates that a 65-year-old couple entering retirement in 2017 will need $275,000 in savings to take care of their health alone. That number has risen sharply in recent years – in 2005, the estimate was $190,000.

The problem, of course, is that most Americans simply do not have that level of savings. Instead of enjoying their golden years, many seniors are finding themselves on the brink of bankruptcy due to their healthcare debt.

Unpaid medical bills put the financial health of both patients and healthcare providers at risk. The good news is that providers can play a critical role in offering financial relief to patients by offering flexible, zero interest, long-term payment plans.

People are used to having options to pay major expenses over time – think about the last time you bought a house, a car, or even a new piece of furniture – and the array of flexible, low-risk payment options that were offered.

Historically, this has been difficult to do in healthcare. Many hospitals try to offer payment plans only to end up with an administrative nightmare, and they put themselves at regulatory and operational risk if they don’t comply with consumer finance regulations.

With both patient out-of-pocket costs and hospital bad-debt levels on the rise, it is time for healthcare leaders to do something different. For many providers, it may make sense to engage a third-party partner that can assist in establishing zero interest, long-term payment plan options for your patients.

When this process is done well, everyone wins – patients appreciate the freedom and flexibility of being able to pay you back over time, and the hospital benefits from increased collections and cash, as well as greater patient satisfaction and loyalty. In an increasingly competitive provider market, providing zero percent options to your patients is proven to sway decisions about where people receive care, and it provides the incentive patients need to be proactive in maintaining their total health and wellness.

Congress is catching on to the value of this idea, too. In fact, legislation was recently introduced by Representative Jackie Walorski of Indiana to encourage more hospitals to adopt third-party patient financing programs for their patients, starting with Medicare patients.

These types of plans, and this legislation, are a rare win-win for both patients and providers. While there is already strong data that shows the benefits of these programs for both the patient and the provider, federal support will provide even more evidence, and a broader perspective, on the impact these plans can have. This legislation will help expand the common-sense solutions healthcare can offer to help people manage their out-of-pocket costs and pay off their medical bills.

In the meantime, I’d encourage leaders across healthcare to learn more about the potential benefits of zero interest, long-term payment plans. I suspect you’ll be pleasantly surprised how caring for the financial health of your patients can significantly impact your bottom line and your position in the community.


Nov Blog.CarePayment.Craig HodgesCraig Hodges is CEO of national healthcare finance company CarePayment, which bases its revenue-generating functions out of Nashville. Hodges has spent his career in healthcare payer solutions and technology, working with the former Emdeon and founding IXT Solutions prior to joining CarePayment in 2014. For more information, go online to



Walorski Bill HR3920