Patient Financing Helps to Support Optimal Care

The population of America is aging. This year, the first of the baby boomers began turning 60 at the rate of one every seven minutes. In the 1960s, life expectancy was age 65. Today, the typical male should live to celebrate his 74th birthday and the average female her 79th.

Due in part to these changing demographics, research predicts that the demand for provider services will increase by 25 percent for orthotic care and 47 percent for prosthetic care by the year 2020.

Unfortunately, there is a widening gap between what insurance covers and what the appropriate care and technology costs, resulting in patients having to pay more out of their own pockets.

With larger out-of-pocket expenses, patients may become limited in their ability to accept optimal care recommendations, especially if their payment options only include cash and major credit cards. And today, it is too financially risky for practices to extend credit to patients and carry the expense of accounts receivable.

Bridging the gap
Enormous pressure on patients’ pocketbooks has arisen from increased O&P deductibles, annual and lifetime O&P coverage limits, and even dropped O&P coverage. Research has also shown that most Americans only have $300 of available credit on consumer cards and cannot comfortably write a check for more than $500 out of their monthly budget.

However, there is a payment model that may help patients and O&P businesses. For years retailers have successfully offered consumers the ability to purchase discretionary or larger ticket items such as televisions, appliances and cars with no-interest financing or through a monthly payment plan.

To bridge the gap between cost and care, many health care practices have taken this concept from the retail sector and provided patients with the option to pay for optimal care and technology over time through a third-party patient payment program, such as CareCredit®, a division of GE Consumer Finance.

Help for patients

With a third-party payment program, patients can finance 100 percent of care with no up-front costs, annual fees or prepayment penalties.

Offering a monthly payment solution as a value-added service benefits the patient and the practice. Most of all, by accepting optimal care recommendations, the patient will have a better experience, a better outcome, and his or her lifestyle will dramatically improve.

A monthly payment option makes it easier for patients to accept optimal care and technology recommendations and fit the cost into their monthly budgets. For example, if the cost of care is $1,200, the monthly payments could be as low as $25.

These third-party payment programs include both no-interest and low-interest loan options. When you compare these options with the potential costs of a fixed-rate bank card, such as Visa™ or MasterCard™, the savings to the patient can be significant.

With no-interest plans, there are no up-front costs to the patient. As long as the balance is paid within the specified term length and on time, the patient avoids interest charges and late fees.

The same benefit is available with low-interest plans. Third-party payment program interest rates on their plans can be as low as 9.9 percent, which is lower than the national average consumer credit card interest rate.

Help for the practice

For the practice, the benefits of third-party financing can be numerous, but none of them are as satisfying as seeing the results of care enable patients to live more productive lives. Optimal care can significantly and positively affect lives, but only if the patient is able to accept it.

Financially, using a third-party patient payment program enables the health care provider to provide optimal care and technology without the cost and risk associated with billing, accounts receivable and collections.

Business cash flow is improved because the practice receives the treatment fee in full, usually within two business days. Usually, third-party payment programs such as CareCredit are non-recourse, which means that there is no responsibility to the practice if the patient is late making payments or defaults on the loan.

An important option

Offering a third-party patient payment program can be quick, is often easy to implement, and is a service many patients appreciate. Some third-party payment programs also provide patient educational and information materials; presentation materials, and ongoing support and training for the practice.

Offering patients a monthly payment plan gives them the ability to immediately accept recommended care and technology, which results in optimal outcomes—the goal of both the practitioner and the patient.

Rob Morris is vice president of marketing for CareCredit, located in Costa Mesa, Calif.