By CRAIG HODGES, CarePayment

As healthcare organizations continue to work diligently to reduce COVID-19 cases, the financial implications for both providers and patients have come to the forefront. The decline in healthcare spending – much of it due to patient financial insecurity – has forced many organizations to make difficult decisions in order to stay afloat.

Prior to the pandemic, patients were already absorbing much of the out-of-pocket medical costs. The increased financial strain resulting from the economic downturn has put even more pressure on patients, causing many to make healthcare decisions based on financial rather than health needs.

As a result, healthcare providers can no longer be singularly focused on the clinical experience to remain viable. Their strategies must also include caring for a patient’s financial health. Helping patients afford out-of-pocket expenses is a proven way to increase revenue, attract new patients and build volume. Offering a patient friendly and comprehensive financing solution can drive significant new cash while ensuring patients get the care they need, when they need it.


Comprehensive Solution Driving Significant Cash

When providers offer flexible payment options to their patients, they remove a primary obstacle to timely access to care. Patient financing solutions also offer clear benefits to providers. They can generate the reliable revenue needed to uphold their organizations’ mission to promote health and wellness in their communities while improving the likelihood of collecting patient-owed balances. A comprehensive patient financing solution is one that meets every patient where they are and offers healthcare organizations multiple strategies to collect significant new cash.

In an ideal scenario, a patient who knows they cannot pay their balance in full asks about payment options and agrees to pay through the available payment plan offered. This works for patients who are able to make payment arrangements while they are engaged with provider staff. However, programs that rely exclusively on provider personnel to educate and engage patients miss out on significant cash due to the realities of these healthcare financial conversations.

The reality is patients walk into financial discussions distracted, scared and uneducated about their insurance coverage and what they could owe. As a result, most patients do not make payment plan arrangements at the time of service and are unlikely to ask about them once they are removed from the clinical experience.

A comprehensive, best-in-class patient financing program is not only available to patients at the front end of the clinical and collection process, but it also includes a pre-bad debt solution that engages patients who have moved out of the provider’s sphere of influence and have been unresponsive to traditional collection efforts.

Pre-bad debt programs engage directly with patients who likely believe they have no payment options and will be sent to collections. Because most patients who need help do not make payment arrangements early, it is the pre-bad debt solution that historically drives the most patient engagement, and the most yield, for healthcare organizations that leverage a comprehensive patient financing solution.

Along with the front end and pre-bad debt programs, a comprehensive solution also includes payment plan conversions and the ability to convert a percentage of active A/R to cash. This ensures balances are immediately funded and paid, which is key to giving providers the cash they need up front in a timely manner.


Patient-Friendly Solution Driving Engagement & Loyalty

With the combination of increased out-of-pocket costs and economic uncertainty, it is important to provide a patient-friendly solution that offers 0.00% APR.

Some patient financing companies charge interest on patient payment plans, making it more difficult for patients to fulfill their financial obligations. Still others offer deferred interest medical credit cards, where the interest does not begin until either the promotional 0% financing period ends or a patient defaults on payment. When either of these conditions occurs, an interest rate, typically well above 20%, is applied retroactively to the original balance. Charging either interest or deferred interest can be detrimental to both patient collections and satisfaction.

Interest-bearing solutions will also have fewer enrollments because not all patients will qualify due to credit checks. But even if patients do qualify, the additional costs may turn some patients away. Deferred interest, in particular, also grossly affects patient satisfaction. Low enrollment coupled with the additional burden of interest for patients leads to increased defaults and lower provider yield.

An interest-free program means every patient qualifies, and there is no impact on patient credit scores. More patients get the payment help they need, which increases overall collections. Because collections are much higher in an interest-free program, the provider should also see a demonstrable ROI, net of any fees.

When patient financial health is prioritized through affordable payment options for all who need them, providers see fewer gaps in care, as well as increased revenue and patient loyalty.


Craig Hodges is the CEO of patient financing company CarePayment, which partners with healthcare providers to make affordable financial options available to patients. CarePayment helps patients get the care they need, when they need it, while protecting the financial health of provider organizations so they can continue to offer valuable care to the community.


WEBSITE: CarePayment