Patient Finance Solutions—A Win-Win for Patients and Providers
With the rise in high deductible health plans, it’s no surprise that Americans are spending more on healthcare than they did in previous years. In 2019, the average American household spent almost $5,000 per person on health care.
These rising costs have a big impact on healthcare facilities as well. For example, the average cash conversion cycle in healthcare is 64 days. That’s a period of over two months before a facility receives any type of payment for service. Additionally, there are patients who are unable to pay their medical bills period, meaning the facility is forced to write it off. Fortunately, patient finance solutions can improve the payment process for both patients and healthcare facilities.
Patient Finance Solutions May Boost Facility Revenue
Even though most patients have every intention of paying their medical bills, fact of the matter is that life happens and every year hospitals write off a certain percentage of revenue that they are unable to collect. One option to reduce this bad debt is to offer patients flexible financing options where they can make payments over time with little or no interest paid.
By offering patients financing options, providers can increase cash flow, cut back time spent on collections, and improve patient satisfaction. Another benefit of patient finance solutions is that the hospital doesn’t have to run the program and it takes the receivable off their books. A hospital can work with a financial institution to manage the patient finance program, making it one less thing hospital administrators and staff have to worry about. Patient finance programs can also be white labeled by the hospital, making it a familiar and comfortable experience for patients without the hospital having to manage it.
One hospital that outsourced its patient financing and collections process reported that the program has reduced accounts receivable and improved cash flow, which has been especially important during the COVID-19 pandemic.
Patients Expect Payment Options
Technology is continuing to advance and positively impact the entire healthcare industry. For example, last year we saw a boom in telemedicine visits as the pandemic kept most Americans at home, giving patient continued access to care virtually. When it comes to payments, patients expect digital convenience as well, and this means the ability to make payments easily and access to financing options.
The rise in buy-now-pay-later payment plans has increased consumer’s expectations around payment options for everyday expenses, and healthcare is no different. Patients have embraced payment plans, as more than 50 percent of patients ages 18-54 have used payment plans to pay for healthcare. It can also reduce the hospital having to write off these patients as bad debt.
Additionally, many patient finance solutions offer patients competitive rates compared to other payment options, like credit cards or payday loans, making it a more affordable option. Patients can also see if they prequalify for a patient finance program without negatively impacting their credit score.
Implementing a Patient Finance Solution
Designed with an easy application process, competitive rates and beneficial terms, FNBO’s patient finance solutions offer a seamless experience for both patients and staff. Benefits of FNBO’s patient finance solution includes:
- The solution can be white labeled so patients are comfortable with the experience
- The program is flexible and can be updated when needed
- Easy application process
- Patients can see if they prequalify without negatively impacting their credit score
- Patients can compare different terms and loan options
- Account management features include payment reminders and account alerts
Contact our team to learn how a patient finance solution can help you monetize your revenue, improve the patient experience and eliminate additional work for your staff.
Blake is a Director of Healthcare Banking, working with hospitals to contain costs, improve controls and accelerate revenue cycles. He believes that stronger financial management can mitigate many concerns around profitability, allowing administrators to focus more on patient outcomes. Blake is proud to be a part of the FNBO community—one that meets the definition of a “great big small bank”—and strives for the personal touch in all of his banking relationships.
The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.