How Patient Credit Benefits Medical Practices

In a world of ever-rising costs, medical expenses are certainly not immune. Everything from equipment and medicine to insurance and leases ticks upward each year as patients and medical practices struggle to keep up. Patient credit programs can benefit both parties by meeting the needs of the medical practice and respecting the patient’s ability to plan for unexpected costs.


Alarmingly enough, medical debt is consistently the top reason why Americans file for bankruptcy. Patient credit programs alleviate much of the distress experienced by patients unable to afford sudden healthcare costs. In turn, these programs also address cash flow needs of medical practices.


In partnership with a commercial financial company, a medical practice can offer patients the credit option while they wait. Once the patient fills out the paperwork, the financial company determines the amount of credit available based on the patient’s credit history. From there, a payment schedule may be arranged with the patient to afford the medical costs.


This addresses two key issues that are at odds with one another. The patient already has expected costs, such as mortgages and other loans, food expenses, gas money and utility bills. An unexpected appointment or trip to the emergency room can throw the patient’s finances out of balance for months to come, especially if the medical bills are not covered by insurance. Now, the patient faces a predicament of how to prioritize the mountain of bills. Meanwhile, the medical practice has its own bills to pay and needs the cash flow to do it.


If the medical practice sells the patient’s debt to a collections agency, a few things happen. First, the medical practice does not receive nearly as much of the payment, and second, the patient who just faced a health crisis and now possibly a financial one, too, is being hounded by a third party. The medical practice then has a reduced budget and the patient suffers a poor credit score.


Patient credit, on the other hand, increases cash flow for the medical practice and helps patients build up better credit. Using installment plans, patients are more likely to pay because they can plan out the costs among their other bills. Credit scores improve with each successful payment, which leads to lower interest rates in the future. Also, with each successful payment, medical practices gain more available cash flow to meet their own budgetary and staffing needs. The improved facilities and payment flexibility increase the likelihood that patients will return to and refer the medical practice.


The current approach to collecting outstanding medical debt perpetuates a downward spiral for both the patient and medical practice. Patient credit programs can help reverse this trend, benefit the medical practice and ultimately improve the patient’s health.

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