The U.S. observed the highest uptick in health spending in 2023 than in the past 20 years. With costs for medical care and services continuing to increase and insurance often not covering many procedures, patients often look to medical service providers to help make financial aspects of their care a reality.
Offering financing services opens up patients’ abilities to secure the medical help they need, similar to how they might finance other higher priced items in their lives. There are many financial healthcare options that providers can offer patients when spending out of pocket isn’t desired or possible. Here are three popular options for patients seeking alternative payment methods:
1. Medical Loans: Typically offered by online lenders, banks, and certain credit unions, medical loans can offer a faster means of payment with lower interest rates and more flexible terms than credit cards. However, financing can be limited, and patients with poor or below average credit may run into higher interest rates or a lack of credit approval.
2. Credit Cards: Depending on the finance terms, a credit card might offer enough flexibility to provide adequate funds. However, this option can necessitate careful understanding of terms in order to avoid penalties such as retroactive interest, unwanted annual fees, and more. Patients should evaluate specific credit cards in comparison to other options to which they might have access, to obtain the best terms and options.
3. Payment Plans: Often, healthcare providers can offer their own payment plans with more beneficial terms than a medical loan or credit card. This can be a way for patients to access funding without utilizing personal loans and/or credit card options. Many providers will offer short-term low or no interest financing.
Of these, a popular option is leveraging payment plans. A payment plan through a healthcare provider often provides patients with more beneficial terms over a medical loan or credit card. This effectively lowers financial barriers, allowing services to be accessible to a wider audience that might otherwise not have been able to afford care.
Financing medical costs can be beneficial for both the patient and the healthcare provider. Here are three ways it can make an impact:
- Attract New Customers with Flexible Payment Options:
Health care is a competitive market. Offering financing options can be an essential step in encouraging new customers and establishing a practice as a competitive option. With medical costs increasing and an estimated 26 million Americans lacking health insurance (2023), medical financing can be a deciding factor in care.
2. Expanding Customer Base:
Offering consumer financing for patients to pay for medical procedures or equipment, either through a financial provider or other means, can be a good way to make services more affordable and accessible. Payment programs grant possibilities to individuals with non-traditional credit histories, or lower credit scores. They can help medical providers to accept and help more patients who may not qualify for conventional credit but still have the ability to pay overtime. Offering financing could be the factor between helping or turning away a patient in need.
3. Building Trust and Customer Loyalty:
Offering financing can demonstrate understanding and care for the wellness of patients, including addressing their financial concerns. When a customer feels as though an organization is willing to work with them financially, it can create a sense of trust, which in turn can foster stronger loyalty. This can lead to longer-term care. A positive customer experience can also lead to referrals, further expanding your customer base through word-of-mouth.
Offering financing options can benefit patients and medical providers and device companies to become a more competitive option, help a wider audience, and increase satisfaction.
The author, Eric Daugherty, draws on more than 10 years of experience, as director of business development at Monterey Financial Services. He can be reached at edaugherty [at] montereyfinancial [dot] com