As the economy continues to struggle and reimbursements continue to decline, hospitals are turning to banking experts to provide their patients with loans to pay their healthcare bills. With the right partner, providers can improve cash collections, reduce bad debt, and reduce the administrative costs related to billing and collections. Additionally, the right banking partner will help to improve the patient experience. Following are suggested guidelines in implementing such a partnership:
- Evaluate available loan programs - Understand the types of loans that are available and the impact of each program (e.g. cost, patient acceptance, ease of use). Determine the loan program you want to offer; there are many options zero interest financing, easy qualification, and lines of credit sufficient to meet the patient’s healthcare obligation. Identify a loan program that is patient friendly, allowing low monthly payments with no punitive interest rates.
- Determine the optimum point(s) in the revenue cycle to offer loans - Proper planning will have an impact on patient acceptance and collections
- Application or non-application based loans? - Know what requirements are placed on your staff. Reducing the administrative workload will increase productivity. A non-application program will qualify more patients and reduce workload.
- Use for affiliated clinics and professional fees - Identify a loan program that is flexible and can be used to meet the needs of both the hospital and hospital-owned physician practices / clinics.
- Patient payment options, rates, and fees - Understand what the bank’s policies are relating to down payment, minimum monthly payment, interest rate increases due to patient delinquency, over limit fees, returned payment fees, annual fees, and other charges. Loan programs can have significant differences and it is imperative that you find a program that is patient friendly.
- Banking partner - Evaluate the reputation of the banking partner. Seek a partner that has more than one bank as a source of capital so that you do not run the risk of the bank exiting the market. It is critical that you check at least 6 to 10 references.
- How will the patients be serviced? - Know who the servicing center is that will be working with your patients and make sure that they are experienced in servicing healthcare loans. Services levels vary; proper servicing ensures a happy patient mix.
- Recourse versus non-recourse loan programs - Understand the benefits and pitfalls of both programs. Which program will meet the goals of your facility? What are the true costs of each program? Which program provides a better option for your patients?
- What can you really expect for recourse? - If you choose a recourse program, spend time understanding the lender’s ability to manage recourse and understand risk. Make sure to know how recourse is calculated and what the terms and conditions are. Find a lending partner that will share in the risk of recourse.
- Tools to help healthcare providers promote the loan program - Collateral materials, such as patient brochures, Question & Answer sheets, posters, press releases and other tools can be generic or customized to your hospital. Know what your needs are in this area before you make a decision.
Taking the time to implement a well thought out program today will provide long-term benefits to both the healthcare provider and their patients. CSI is the trusted industry leader in providing automated patient loans that increase cash flow and improve patient relations. For more information, or to schedule a no obligation webinar, please contact me at 858-200-9201, or via email at mpatridge@csifinancial.com