Webinar Recap: Best Patient Financing Strategies with KLAS Research

On May 11th, KLAS Research and CarePayment joined to host the webinar Assessing Patient Financing Strategies: A Best Practice Overview. If you were unable to attend the live webinar, click here to watch the recording and read our webinar recap below.

In the face of a global pandemic, rising interest rates and staffing shortages, the healthcare industry is grappling with financial challenges like never before. To address these issues while maintaining patient satisfaction, patient financing has emerged as a valuable solution. Recently, KLAS Research and CarePayment joined forces to shed light on the patient financing landscape and share best practices that can lead to better financial outcomes for providers and their patients.

Challenges Impacting Financial Health of Both Patients and Providers

Financial health challenges are prevalent among both providers and patients in the healthcare industry. Some startling statistics regarding patient financial health:

• America’s debt crisis is driven by a simple reality: Half of U.S. adults don’t have the cash to cover an unexpected $500 health care bill.
• According to a Kaiser Family Foundation (KFF) poll conducted in 2023, 41% of those surveyed — which translates to more than 100 million adults — reported that they currently had debt due to medical or dental bills.
• A separate Kaiser analysis estimated that more than a quarter of those with medical debt owed more than $5,000, and half of that 25% owed more than $10,000.

Medical debt not only impacts individuals’ financial well-being but also exacerbates racial disparities, restricts access to care, and hampers long-term financial planning efforts.

Providers, too, face acute margin pressures and an unstable healthcare workforce. Nearly half of U.S. hospitals finished 2022 with a negative margin, with expenses outpacing revenue growth. Inflation, high labor costs, and the end of federal pandemic funds further contribute to their financial strain. The competitive labor market, along with staffing demands driven by COVID-19 impacts, has led to an overreliance on expensive contract labor. Media and regulatory pressures have heightened the scrutiny surrounding patient financing programs, demanding greater transparency and fair practices. To meet the needs of patients and providers in this ever-changing landscape, Brian Barlet, CarePayment VP of Account Management, explains, “A patient-driven approach is becoming the norm as traditional practices come under fire. In the shifting market, we have to transform the revenue cycle to maintain compliance and meet the financial needs of healthcare consumers today.”

Insights into the Patient Financing Landscape

Some providers are turning to patient financing partnerships to reduce their financial strain and aid patients by providing them with the option of low-cost payment options. Providers seeking to incorporate patient financing into their revenue cycle process may need help identifying best practices and evaluation criteria when deciding who to partner with. Gordon Bishop, KLAS Research Director, shares insights into the mindset of patients when making healthcare decisions. “One of the things that we’re learning is that every single one of us is a patient and a consumer. What we’re seeing is the retail-ization of healthcare. Organizations like CarePayment are providing options, and that’s what consumers and patients want.”

Successful patient financing partnerships should prioritize patient experience, offer flexible repayment terms, and refrain from charging deferred interest or reporting to credit agencies. A good partnership emphasizes the importance of scalability, regulatory compliance, and the ability to engage patients effectively throughout their medical journey.

KLAS Research Methodology and Reporting Insights

KLAS Research evaluates over 400 vendors and 750 products and services in the healthcare space to provide valuable insights into healthcare consumer experiences and improve healthcare across provider, payer, and emerging “payvider” markets. When asked about KLAS’s methodology, Niel Oscarson, KLAS Research Director, notes, “One thing that we learned early on was that we are getting unbelievably unique insights into customer performance, and sometimes those insights are items and things that the customer wouldn’t usually share with the vendor themselves.”

To ensure providers can navigate the evolving landscape of patient financing effectively, a checklist of aspects to consider when providers are evaluating potential patient financing vendors was reviewed:

• Ensure they have consumer-focused options that can help providers maintain strong collections and patient satisfaction in a fast changing regulatory and compliance environment
• See if they leverage strategies that keep patients engaged with their preferred method of communication at all patient touchpoints (pre-service, pre-bad debt)
• Make sure your patient financing strategy does not report to credit agencies, is always 0.00% APR for patients (no deferred interest!), and offers compassionate, income-based payment options and flexible terms
• Check from reputable third-party research/reporting entities to validate credibility and see un-biased rankings between potential partners

The patient financing webinar by KLAS Research and CarePayment shed light on the best practices to address the financial challenges faced by providers and patients. By prioritizing patient experience, engaging patients throughout their healthcare journey, and selecting reliable partners, providers can navigate the evolving landscape and improve financial outcomes for both themselves and their patients. To gain a deeper understanding of the best patient financing strategies discussed, watch the full webinar recording.