The Importance of Patient Financing in Healthcare Revenue Cycle Management

In the midst of record-high hospital bankruptcies and healthcare staff burnout, the healthcare affordability crisis is further highlighted by the increasing use of GoFundMe for medical expenses. According to a recent article in The Atlantic by Elisabeth Rosenthal, GoFundMe has become a go-to platform for patients struggling with medical billing nightmares.

Medical fundraising is the most common category on GoFundMe, with some healthcare finance professionals even suggesting its use. As healthcare systems grapple with the complexities of the payment system, there is a growing consensus that new approaches are needed. The latest Deloitte survey of healthcare CFOs reveals a focus on improving revenue cycle management and offerings to reduce costs and improve profitability.

One key issue is the limitations of in-house payment plans, which often fall short of meeting patients’ needs. More than half of patients require longer than 12 months to pay their balance, necessitating longer-term payment plans. Embedding patient financing options into the billing process emerges as a solution to balance affordability and increase collectability.

Patient financing differs from traditional medical credit cards and loans, which are now under scrutiny by federal regulators like the CFPB. Patient financing offers better, longer terms to those most in need, without high or unclear interest rates. It is designed to address the unique challenges of managing medical bills and should be available interest-free for all patients who need it.

Providers are recognizing the importance of integrating patient financing options into the payment experience, with a focus on offering personalized payment plans through the patient portal. By partnering with experienced vendors, providers can streamline the payment process and improve cash flow while ensuring patients can afford their healthcare expenses.

In the face of the healthcare affordability crisis, patient financing emerges as a viable solution to help both patients and providers navigate the challenges of medical billing. With the right approach, patient financing can alleviate financial burdens for patients and improve revenue cycle management for healthcare providers.