July 07, 2014
Hospitals are improving collections by offering no-interest payment plans to its patients. This payment plan is also helping patients to escape hidden fees and high rates associated with lending products, including medical credit cards.
In the past, lines of credit and medical credit cards were offered to patients so that they can pay for procedures not covered by their insurance. But, these cards did not gain popularity due to high interest rates. Up to 30% interest is associated with medical cards and if a patient misses payments, the interest amount can substantially increase.
To give patients more time to pay their bills without getting overburdened with high interest rates, many hospitals in the US have started offering no-interest payment plans. By offering a flexible payment plan, hospitals have enhanced their own collections rate.
12 of Novant hospitals, a non-profit integrated healthcare system in North Carolina, introduced no-interest payment plans in 2013. Since then, defaulter rate of patients on a payment plan has reduced to 17% from 30%. Due to this plan, hospitals are witnessing 15% increase in patient payment collections
DeSoto Memorial Hospital in Arcadia, Florida has also been offering no-interest payment plans for five years now. They started this plan because many patients used to delay the payments due to monetary constraints
Advantages of a No-Interest Payment Plan
At such times when many hospitals across the US are reporting an increase in debt, a no-interest payment plan has become a necessity to procure timely payments without losing patients
Compared to other financing products, a no-interest payment plan is more patient-friendly
It applies to all the essential healthcare services and not just particular procedures. For instance, medical credit cards were first made popular for cosmetic surgery and other elective procedures
This plan has not only increased collection rates but also resulted in greater patient satisfaction
Some patients fail to understand the financial terms of medical cards when signing up. This burdens them with more medical debt than they can handle. In case of a default on payment, they fall into the trap of hidden fees and high interest rates. Due to these concerns, hospitals have started offering payment plans without interest rates. Small hospitals in particular, are hiring no-interest plan vendors to help them track due amounts and process payments from patients.
In absence of convenient payment options, many patients delay in abiding by the deadline for paying up. However, through these no-interest plans, patients can get timely access to medical care. Hospitals can also in turn ensure receipt of payment from patients who are not able to pay in full immediately.
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