With high-deductible health plans and self-pay patients increasingly becoming the norm, healthcare providers know they need to find new ways to collect the money they are owed.
Now some hospitals and health systems are finding success by offering zero-interest loan programs to patients who need time to pay down hefty medical bills.
Tim Nguyen, corporate controller at Palomar Health, a 690-bed system based in San Diego, says his organization's leadership team decided to offer a zero-interest loan program with flexible terms because it was becoming harder to collect from self-pay patients.
Although the health system has offered financing to patients for years, last year it began working with a new vendor to provide interest-free loans with more flexible payment terms, Nguyen says.
The new vendor offers loan terms of up to six years, allows patients to freeze the account for a few months without penalty, and lets patients rework monthly payment amounts, if necessary.
"Most people want to pay. They want to do the right thing, but if it is a choice between putting a meal on the table or paying their hospital bill, what are they going to do? We asked 'how do we make it easier for the patient to do the right thing and pay the bill?' The whole objective is to be patient-centric, not hospital-centric. We have to walk in the patient's shoes to find out their challenges and address them," Nguyen says.
The health system now pays the interest charges instead of passing them onto patients, but Nguyen still considers the program to be a big success because it has substantially improved collection rates and overall revenue.