Finance: Easy Pay
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Written by Nancy Fragus   
Thursday, 01 May 2008
Finance: Easy Pay - Health Executive - RedCoat Publishing
Finance expert Nancy Fragus says hospitals and clinical practices of all sizes can benefit from promoting patient payment programs.
Finance is used as a sales tool in almost every business. From home mortgages and autos to furniture and electronics, most of the things we buy have a finance program associated with them. Savvy finance executives know that if you offer a consumer a payment rather than a price, they will be more likely to make a purchase. A monthly payment not only sounds better, it makes it easier for the customer to buy because you have met their financial objectives while selling your service.

The one sector that rarely takes advantage of this tool is healthcare, even in the face of upset patients who have not yet met their deductible for the year. Patients almost always underestimate the cost of services, so it makes sense to ease the blow by showing them a way to obtain your services within a budget they can afford. Offering a monthly payment is certainly more attractive than telling a patient, “The services you would like today will cost around $1,000.”

Cash flow is key to financial success in any business, and healthcare is no exception. With the ongoing changes in reimbursement structures, medical practitioners are integrating patient finance programs to give patients the option of paying for services when they are rendered rather than the clinician billing patients on a monthly basis. Obviously, obtaining immediate cash flow is very attractive to a business owner. Adding programs within a practice or medical organization should enhance the practice’s overall financial condition.

Up-front payment
Chris and Suzanne Russell are self employed. They have medical insurance for emergency services and hospitalization but not for routine office visits, prescriptions, laboratory services, etc. When their three-year-old son came down with a persistent cold, the Russells wanted him to be seen by a medical provider but were concerned they could not afford the office visit, possible blood work, and prescription for their child.

Fortunately, the Russells found a patient finance company to approve them for credit and immediately sought medical care for the child. The provider was paid upfront for services rendered, and the Russells are paying the bank back on a monthly basis, a win-win situation for everyone.

Increasingly, hospitals, practitioner groups, urgent care clinics, and other types of healthcare facilities are taking advantage of these types of financing programs. In most cases, getting a patient into a program is simple, involving a connection to a patient finance source in your marketplace and a credit application from the patient. The medical organization must spend a bit of time understanding the programs that are available, but they are easy to implement and have minimum set-up costs.

The director of admissions for an urgent care center in Atlanta, Margaret, found value in adding a patient finance program to her admissions process. “So often, patients come in the door seeking medical attention but do not have insurance or the money to pay for services rendered,” she said.

“While the patient is sitting in our waiting room, I ask if they would be interested in our finance program to pay for their medical services,” she said. “Many times, they agree to fill out the form.” Margaret sends the form to her finance company and usually receives approval within a few minutes. “It has really changed our revenue stream, and the process was very easy to set up,” she said.

Track transactions
Not all programs are created equal, so look for financers that offer online credit submissions, immediate credit decisions, and quick funding—and make sure there are no hidden fees.

Providers using patient finance programs should set up a separate business account to accurately identify transactions being paid. It’s also a good idea to have an internal staff member keep a status report on fundings. Although most transactions are paid via direct deposit into an established checking account, it makes sense to track the transactions to make sure payments are posted correctly.

Patient intake forms should include a line asking, “Are you interested in our finance program?” All promotional advertisements should include information about patient finance options—you’d be amazed at how often patients will opt for one provider over another due to the finance programs offered at the medical office.

If possible, find a staff member in your office who is outgoing and able to talk easily to patients. Have that person attend a training seminar on how to politely offer patients a monthly payment rather then a large lump payment.

Most patient finance programs offer a line of credit, loan, or a credit-card-type approval. Once the dollar amount has been used, the money is usually available for reuse of services. Once a patient has a line of credit for services rendered in an office, it stands to reason they will choose to come back to your practice.

Nancy Fragus is president and CEO of Tri Healthcare. She works with medical providers and healthcare organizations of all types structuring patient finance programs, advising on equipment acquisitions, and consulting with healthcare providers on how to enhance revenues and build a stronger medical practice. She can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
 
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