patient loan programs! are they right for your organization?
TRANSCRIPT
Patient Loan Programs!
Are they right for your organization?
Kenlyn T. GretzCEO of AMERICOLLECT
Loan Programs – The Positive
Patients pay in full more quickly.
You build loyalty with the patient.
You train the patient to pay in full in the future.
Loan Programs – The Positive Patients pay “loan” payments with higher priority than
healthcare bills. Less Rob Peter to Pay Paul!
You save statement costs, payment application, and posting.
You don’t carry “as much” of the risk - future bankruptcy
You drive more PAID IN FULL even if they don’t sign up for the loan program.
Is it Right For Your Organization? You need larger balances
$500 - $750 or Add On Services.
Do you need cash more quickly?
Decrease your AR more quickly than extended payment plans of 6 to 18 months.
Is it Right For Your Organization?
Radiologist with no direct patient contact? Emergency Doctors with direct patient contact, but
limited quality patient time? Healthcare system with 4 different software systems
(hospital, physician, home health, nursing home)?
Why Loan Programs Fail Sign up (application) too complicated.
Too many people involved in the process.
Not a good deal for the patient.
No sense of urgency. If you don’t pay X, then you must do loan.
No buy-in from internal provider staff.
Why Loan Programs Fail Internal provider staff, not given training.
Loan program is not communicated.
Loan program is not monitored.
Patient perception that “their” bank can do better.
Call it Loan Program v Extended Payment Plan.
Local Bank V. Healthcare Specific
Local Bank May not want the business. Familiarity to the patients. Lack of data sophistication for add on balances. Data sophistication for default/recourse
notification. Community relations. Too high of a score threshold. Reports to credit file.
Healthcare Specific Lack of familiarity to the patients.
Data sophistication for add on balances.
Data sophistication for default/recourse notification.
Too far away?
Healthcare Specific Simple application.
Transfer call to sign up.
Website Access for provider and patient.
More defaults?
Usually does not report or check credit file.
How Healthcare Specific Work The provider has no money invested. Loan company approves most anybody. Patient charged a loan origination fee ( $10 - $25 ) Patient charge interest between 0% – 10% Loan company reimburses provider for full amount
of loan less an expense fee ( 5-10%) – just like credit cards. ( 1000 $ bill – nets $970 to provider ).
Expense Fee is for sending statements and monitoring loan.
How They Work The provider has no money invested. Provider is out of the picture and marks the account
paid in full. Unless…the patient defaults. During the time of non-default, providers saves
from sending statements and posting payments. Provider earns interest on the $970.00 in their bank.
The loan company earns the interest (if charged) on the loan.
How They Work Default: Practice gets the account back less any
payments applied to principle. Practice adds back on the “expense fee” and lists for full collection at a collection agency.
What do you think is the default rate? 3% - 6% Normally – later on the payment term Add on new balances - functionality Excel Chart
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