Over the past 10 years, the cost of quality medical care has continued to rise rapidly. According to a recent study from Porter Research, 91% of American families view healthcare as a big-ticket purchase that requires long-term financing, but not all medical providers offer these types of payment options. As the volume of “self-pay” patients has continued to rise over the last five years, healthcare providers are looking for more ways to get paid and to differentiate themselves. Offering financing and payment plan options is one of the easiest and most effective ways that they are accomplishing this goal.
The Patient’s Perspective
Patients are educated consumers. Before making major purchases like buying a car, they research online, and shop around not only for the product, but for their financing options to purchase the product. From the patient’s perspective, financing options empowers the patient. They are not burdened with a large lump sum for medical care and benefit from the option to make small payments over time. Considering that many medical bills originate from unexpected circumstances, offering financing and payment plans has been linked to improved patient satisfaction.
Modern patients want options for making payments. According to a 2016 Fiserv study, 71% of consumers reported that having multiple billing and payment options increase their satisfaction. Patients have continually shown that they are more likely to pay, and pay on time, when more payment options are available. Patient’s preferences for paying the same biller aren’t even always consistent month-to-month either. For example, 42% will use a different payment channel than they did last month to pay the same bill.
The Providers Perspective
From the provider’s perspective, the increase in self-pay customers brings new challenges and risks. Providers are less able to rely on insurance companies to compensate them for their work, and need to adapt to the new patient dynamic. Providers are looking for ways to improve the patient experience which, in turn increase the probability of them being paid, and paid on-time.
Now that more than 62% of all bills are paid online, providers have an opportunity to improve the patient experience by offering multiple channels for consumers to pay their bills. In a recent study, it was found that 93% of consumers would pay online on a provider’s or health plan’s website if given the option and that’s not providing patients with multiple avenues for payment is one of the top 3 biggest self-pay mistakes a hospital can make according to a recent Healthcare Finance article.
Providers are starting to wrestle with the idea that patients are prioritizing the payment of their medical debts behind other bills. According to a recent McKinsey & Company survey, only 7% of consumers ranked medical bills as one of the two bills they prioritize paying, training categories like mortgage/rent (72%), utilities (55%), and even cable/cell phone/internet (8%). Offering multiple payment channels and financing options enables patients to budget for the expense and increases their propensity to pay and outstanding medical bill.
Finding the Right Solution
It is important to find a solution that is the right fit for each provider, meeting the specific needs of their practice. Based on the average balance of outstanding accounts and other key indicators, providers can evaluate the types of financing and/or payment plans that they wish to offer.
When it comes to offering financing, providers are not on their own. Companies like CareCentric360 enable providers to offer financing through one of their direct-to-patient programs, or they can white label the offerings. Providers using programs like those provided by CareCentric360, receive immediate payment on self-pay accounts, leaving the financing company to manage the patient’s account, collect payments, respond to inquiries and otherwise service the account. Through these programs, providers eliminate their risk of uncollectible accounts, adding predictability to receivables management and freeing up more time for their administrative staff to focus on patient care.
CareCentric360 is part of the FFAM360 family of companies. “We pride ourselves on filling the gap, and helping patients with the financing options they need,” said FFAM360 President, Mary Maloney. “We are creating opportunities for families to have more control of their medical expenses by offering affordable payment plans.”
Using third party financing companies like CareCentric360 also enable providers to use multiple payment channels. When providers partner with the right financing company, patients can use the provided online portals for account management and enables patients to make payments online, over the phone or using a variety of other payment channels. Healthcare providers and their patients all benefit by choosing the right financing partner.