How to Offer Financing to a Medical Patient?

Published by Martha Pierson at December 16, 2022, Last Updated at December 20, 2022

About 38% of adults in America have delayed, skipped, or were forced to cut back on household expenses to afford medical tests and treatment. In addition, insurance plans do not always cover all types of medical costs, which increases the barriers and limits access to healthcare for millions of people.

Medical practitioners may not always realize how many patients avoid healthcare because of high costs. This presents a problem not only for patients but also for the sustainability of healthcare clinics. However, one of the best ways to overcome this issue is by learning how to offer financing to a medical patient at your clinic.

By offering different financing options at your facility, you can encourage patients needing care to easily access your services, increasing your patient volume and driving your revenue.

Understanding Medical Patient Financing

There are two main ways to offer patient financing. You can offer in-house financing, or you can work with third-party lenders. Both have unique benefits and disadvantages. Let’s take a quick look at each option.

In-House Patient Financing

In-house patient financing positions the healthcare clinic as the primary lender. As such, your practice is responsible for determining patient eligibility for loans, funding the loans, and collecting repayment. In some cases, this puts more power in the hands of the clinic, as they determine the eligibility requirements along with federal regulations and guidelines.

Close up on patient handing credit card to nurse

However, in-house financing is more complicated and comes with higher implementation costs, as providers must conduct credit checks and prepare a lending policy. Additionally, internal financing can cost your clinic tens of thousands of dollars in setup and maintenance costs. You will also need a POS provider to implement and install the necessary software to fund loans and collect payments.

The benefits of internal financing include:

  • Streamlining the application process
  • Increasing patient engagement
  • Higher approval rates
  • Control over applications

On the other side, the drawbacks include:

  • High implementation costs
  • More responsibilities over reviewing applications
  • Financial loss in case of patient default

Third-Party Financing

The other option is to work with a lending network. Setup and maintenance costs are usually less costly than in-house financing. This is true when the lending network is managed by a financing company.

In most cases, the clinic will be charged a percentage of all funded loans. However, this is typically 3% to 6% of the total loan amount. Ultimately, this is significantly less costly than funding your own loans.

With a third-party financing solution, the lender may handle eligibility checks, loan disbursement, and payment collection. As a result, your clinic may not be on the hook for defaults or other risks associated with lending.

Third-party financing software is also relatively cheaper to implement than in-house financing. In most cases, your clinic will pay for the initial setup cost and a percentage of the loan amount for every approved patient.

Through patient financing software, the healthcare clinic provides individuals with access to funds for elective and non-elective medical treatments.

With a flexible financing option, healthcare providers can offer their patients:

Here are some benefits of financing through third-party lenders:

  • No financial loss in case of patient default (in most cases)
  • Up-front funding if the lender approves the patient
  • Fewer responsibilities on collections as the patient pays the lender directly

Conversely, the disadvantages may include the following:

  • Less control of patient application acceptance
  • Less control over interest rates

The Benefits of Offering Financing to Your Patients

We’ve already compared the benefits of offering in-house financing to working with a lending network. However, there are many more benefits of implementing healthcare patient financing:

  • It increases patient volume. As mentioned above, millions of patients skip getting treatment because of the high costs of these services. However, many patients may reconsider if they know they can undergo medical procedures and pay later or take a small loan to cover the costs. Offering customer-oriented payment services can boost the number of new patients and increase patient retention. For example, a buy-now-pay-later system increases conversion rates by approximately 20% to 30%.
  • It reduces the burden of collections. Patient financing options also reduce your staff’s time and energy spent manually collecting patient bills. If you opt for third-party financing, the lender will be responsible for collecting payment and handling defaults. You may get paid in full within a few days regardless of when the patient fully pays back their loan.
  • It boosts revenue. The more patients you serve, the more revenue you’ll make. Implementing patient financing can help increase your revenue by an average of 15%. Patient financing is not only helpful for necessary treatment but also elective procedures too. For instance, many patients may be incentivized to undergo cosmetic procedures that they couldn’t otherwise afford because of the upfront cost.
  • Increased patient satisfaction. Alternative financing options can also increase patient satisfaction by building stronger relationships between the patient and the provider. Acquiring new patients is a hard job, and the ability to offer flexible payment options can leave the patient satisfied and get them to return to your clinic whenever they encounter another problem.

The Risks of Patient Financing

Despite all these benefits, patient financing also comes with several risks. These risks need to be anticipated, and you should set an action plan to mitigate them before you start offering loans to your patients. Some risks around patient financing involve:

  • Risk of Default. Like all loans, healthcare providers should remember that there’s always the possibility of a default. If you offer an internal financing program, you will be responsible for reviewing applicants’ creditworthiness and default risks. If the patient defaults, you must find a way to collect the amount from the patient. Failure to collect payables can result in severe revenue loss that negatively impacts your clinic’s financial sustainability.
  • High Costs. If you decide to fund your own loans, there will likely be more risks to consider. For instance, the clinic must conduct credit checks and underwrite the patient, which all costs money. Your staff also needs to collect payments and monitor accounts, leading to additional work. You might even need to hire more employees to manage these tasks. Finally, in-house lending requires clinics to abide by strict federal lending regulations. Alternatively, these costs can be reduced if you opt for a third-party lending platform.
  • Strict Requirements. You may need to require a minimum loan amount for the financing to be profitable.

5 Tips to Make Patient Financing Work for Your Medical Practice

Once you’ve weighed the risks and benefits of medical financing for patients, it’s time to get into action. Here are five practical tips on how to offer financing to a medical patient in your facility:

Discuss the Treatment the Patient Will Undergo in Detail

Before the patient asks about the costs, explain the final diagnosis and different treatment options in full detail. It’s important to educate the patient on the types of treatment options, as well as a detailed breakdown of the costs.

Doctor discussing financing and treatment options with patient

Money matters don’t always have to be discussed by the clinician. Instead, you can hire a financial expert to discuss payment options with the patient. It’s also worth mentioning to the patient that not all lenders will offer personalized financing. However, they still may offer a financing option that is more flexible and budget-friendly than paying the full sum upfront.

Inform All Patients About Financing Options

Instead of assuming who can afford your services and who can’t, tell all your patients about the financing plans you offer. Gary Freestone, OD, at Freestone Optometric Center in Rialto, California, says, “financing is introduced as an option for all our patients, not only those who express that they have a financial concern. As a result, at least half of our patients who opt to make their purchase via financing do so to buy even more than they would before.”

We suggest discussing financing options with your patients after you’re done explaining the diagnosis and summarizing the treatment agenda. While it is best to be transparent with your patients about the total cost of the treatment or procedure, having a financing option allows you to discuss flexible payment options they may qualify for. For instance, depending on their eligibility and your offerings, patients may qualify for low APR loans, installment plans, or personal loans. As a result, your patients may be more receptive to the treatment plan.

Use Waiting Room Areas to Notify Patients About Available Financing

Your clinic’s space can serve as a great place to implement various offline marketing tools and strategies. Brochures, posters, or info desks in the reception area and waiting rooms can educate patients about your services and financing options, helping them make better-informed decisions about their health. In fact, a study found that 78% of patients in waiting rooms notice the materials on the walls, and 68% find them useful. You can use this opportunity to inform your patients about the benefits of pay-over-time financing, which allows them to get the services they need and want on a repayment schedule that fits their budget.

Mention It on Your Website

In the age of the Internet, the majority of patients research healthcare providers online before they choose one. This is a great opportunity to let them know about your flexible payment options on your website. Patients landing on your website will be more willing to book an appointment if they see that your clinic is ready to collaborate with them and give them a budget-friendly way to afford treatment.

Close up on dental website

Social media is also a powerful tool that can spread awareness about patient financing, relieving the financing fear that holds many people back from receiving treatment. Therefore, when you tailor your marketing campaigns, try to make them revolve around this topic. For example, your social media content can include taglines such as: “Get treated now, pay later through our financing.”

Have a Special Area Where Patients Can Discuss Their Financing Options

We recommend dedicating a particular area in your clinic where patients can get more information about their financing options. Your team can help them identify which options they may qualify for and get an estimated cost of interest fees and payment schedules.

Offer Online Payments

Current technology allows people to make payments and installments through their phones from anywhere. Various apps also send constant reminders to patients when it’s the payment date, making the repayment process hassle-free. Additionally, by offering online payments, you can highlight the seamlessness of taking a loan and paying it back at your facility.

Start Offering Patient Financing with Finturf

Finturf is a turnkey payment platform that takes less than an hour to implement. Finturf utilizes a waterfall algorithm to try and connect medical patients with direct lenders. If the client is not connected to the first lender, their application may be routed to additional providers. Ultimately, this improves their chances of finding funding for elective and non-elective treatment.

Additionally, the lender will handle all the risks associated with lending, including credit checks and defaults. Finally, clinics may be paid in full and upfront within two to three days. Healthcare providers may not need to wait for the patient to repay the loan to receive the funds for their services.

Sum Up

Alternative payment options can take your healthcare business to new heights. Not only can it increase your revenue, but it can also unlock many opportunities for people struggling to afford medical care.


Martha Pierson

Editor-in-ChiefMartha is Editor-in-Chief at Finturf.com. Her career began in 2003 when she started as an investment banking analyst. Martha continued her career path as a financial advisor for investments. She has a passion for writing and is mainly focused on covering financial and business management topics.

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