patient financing because of their confusing natures.
As the face of healthcare evolves and deceptive lending practices are exposed, there are in fact, many more patient friendly options for medical financing. Not to mention options for in-office systems that can be set-up to help patients manage their expenses.
What to Look For in Safe Patient Financing Options
Lower Rates: Health care financing options are notorious for interest rates skyrocketing to upwards of 30% for late payments. These practices are not patient friendly and often result in angry phone calls from disgruntled patients back to the office which referred them to these financing plans to begin with. Referring patients to predatory financing companies can result in a loss of trust between the patient and physician.
Terms and Restrictions: Questionable healthcare lenders are also known for short payment terms which can translate into exorbitant interest rates for balances not paid within an established term. It is important for practices to pay close attention to the term options being offered to patients within any given plan. Even if patients are offered longer payment terms at higher interest rates, it is better that they have extended options as opposed to limited options with short terms and skyrocketing interest rates.
Late Fees: It is to be expected with any line of credit that late fees will be applied to accounts experiencing late payments. Lenders cross the line when their terms include dramatically increased interest rates after one late payment. Rates can sometimes be raised to as high as 30% from an initial 7-10% starting rate.
Tiered Programs: The biggest obstacle to securing patient financing will always be a patient’s credit score. There is very little a (physician, since you have been using this term throughout) can do to combat this problem. Fortunately, there are lenders offering credit lines to those with challenged credit, with fair interest rates and terms for patients.
Alternatives to Lines of Credit
Payment Plans: With the right technology physicians can create in-house payment plan programs for their patients. Cloud based software like PaymentCare™ allows practices to set-up recurring, installment or save on file payment plans. These programs give offices the ability to securely store patient card information and set-up automated plans to be deducted from their accounts.
Patient financing can be a beneficial solution for both patients and physicians. It can help practices increase collections and improve cash flow dramatically. As the healthcare marketplace becomes more competitive, it is wise for practices to diversify their resources for patient payments to stay afloat.