How Payment Plans Can Positively Affect the Relationship Between Health System and Patient

After almost 30 years in financial services, I’ve learned that what works best for one organization may not be the best solution for another. This is especially true when looking at different strategies for patient payment plans. It’s important to find the right approach for your organization, taking into account your history, philosophy, and policies. But one thing all health systems should know: payment plans have a lot of positive potential, from increasing payment rates to boosting patient satisfaction.

Good for the Patient, Good for the Provider

I’m a huge proponent of payment plans and the value they bring to both patient and provider. 

For the patient, let’s say you come into the hospital to receive care. It could be a 30-minute visit or a 30-day stay. The financial burden can be drastically different (of course, with the rise in HDHPs, this burden has risen across the board). Whatever the amount owed, payment plans can increase the likelihood of a patient making a full repayment of their obligation. By offering payment plans, tailored to each patient in a consistent way across your patient population, you’ve created a solution that enables you to support your patient in meeting their out-of-pocket balances. 

For years, we’ve heard the retail banking industry talk about debt consolidation loans or balance transfers—and it’s something healthcare can learn from. The truth is, patients want to repay their debt—and payment plans can simplify the process. For example, with VisitPay patients can add new visits to existing plans. This consolidation makes debt far easier to prioritize, manage and pay. Allow people to pay on a realistic schedule that works for them, and—just as importantly—create a positive experience for the consumer. It’s a clear patient win.

It’s also a win for the provider. As health systems look to raise their patient payment rates, offering payment plans can be one way to do so. Payment plans minimize the cost to collect by automating future repayment, and automatic payments naturally increase the likelihood of consistent revenue. Payment plans have the ability to turn patients who have not been able to contend with their balance (using a traditional pay in full, pay in 30 days approach) into people who are willing to engage. By offering options that work for the individual—with flexible plans with terms and recurring payments tailored to each patient—you create a good outcome for everyone.

Payment Plan Policies

Some health systems may choose to apply interest on payment plans, helping offset their cost of capital from offering longer-term repayment options, while extending compassionate terms that patients could not find through other methods of financing, like maintaining a revolving balance on credit cards. An online field survey conducted by VisitPay in 2020 found that over one-third of patients (37%) fund medical bills with credit cards, and, of these, three-quarters finance them for multiple months, compounding health costs over time. 

Applying interest is an option in VisitPay that some of our clients choose to activate. It is only one element that goes into considering the right payment plan strategy for each health system on our platform.  We work with our clients to apply a healthcare-appropriate set of consumer finance techniques that we learned from our days at Capital One, in ways that are compliant, patient-friendly, and effective. We help health systems find the right approach, which may include discounts or extended low-interest plans, or payment holidays for patients that need it. And we help our partners find the right balance between self-service patient options and arrangements that revenue cycle staff can configure. VisitPay’s platform is flexible and we are prepared to help health systems optimize the right solutions to fit your goals.

Looking at Performance

It’s important to remember that if the patient is able to repay their obligation in a way that is helpful to them and fits their current financial circumstance, that is also good for the provider. To look at success on a large scale, ask yourself: what percentage of your payment plans are in good standing? An incredibly high proportion of health system payment plans that are managed in VisitPay are in good standing today, helping drive down bad debt.

You should also ask if your consumers like the payment program. This is possible through measuring Net Promoter Score. When we look at the NPS scores of health systems across the board, patients on payment plans routinely score highest of any patient group. And it makes sense. You are solving a large problem for them: their ability to fulfill their obligation in a way that makes sense for their budget. 

This is really the key takeaway: payment plans can lead to a higher overall patient loyalty for the health system. You took care of them when they needed clinical help, and now you’re providing them with a solution to pay over time that works for them. It creates a cohesive and positive overall patient journey, and that breeds long-term loyalty. 

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