Going to the hospital is a stressful experience. Whether it is due to an injury or major illness, an in-patient stay is flooded with medical jargon, major decisions, and after-care instructions. On top of that, many patients worry about how they will pay the subsequent bills.
CNBC reported, in February of 2020, that 32% of American workers have healthcare debt and about 28% of those owe more than $10,000. Almost half of those surveyed defaulted on their medical bills. Even among workers—a group typically covered by health insurance—deductibles and co-insurance continue increasing.
An inability to pay creates problems for hospitals as well. Between uncollected portions of the patients’ responsibility impacting cash flow, and the administrative burden, providers expend a lot of energy attempting to resolve outstanding patient balances.
Yet, there is a solution that bridges the worlds of hospital revenue collection and affordability for patients. Patient Loans @Epic River solves both of these challenges while also providing a new lending opportunity for community banks and credit unions.
Benefits for the Patient
With Patient Loans, patients finance their healthcare through a loan at a fixed rate and an affordable monthly payment of their choosing. Patient Loans are not dependent on creditworthiness and, unlike other types of loans, do not charge fees or prepayment penalties.
Too often, patients end up charging medical expenses to their credit cards, which results in exorbitant interest over time. With Patient Loans, patients have fair, fixed interest rates and pay off their medical expenses in a reasonable amount of time.
Some private lenders provide patient financing, but loan approval is often based on credit scores or has high-interest rates. By getting a loan through a community bank or credit union, patients receive the best possible financing for their medical expenses.
Benefits for the Healthcare Provider
While some hospitals and other healthcare providers have attempted to implement payment plans for patients, this creates overhead and additional administrative costs.
Payment plans also increase the length of time before the provider recoups the amount owed by the patient. In these scenarios, the hospital is essentially providing the financing. And while payment plans increase the likelihood that the patient will eventually pay the expenses, it constricts the hospital’s cash flow.
With Patient Loans @Epic River, patients are offered financing options through an online portal. Patients sign up and electronically sign their loan documents. And unlike other patient lending platforms, Patient Loans @Epic River has no fees or other costs to the provider. The provider receives full payment within two business days, drastically reducing accounts receivable days and improving cash flow.
Benefits for Community Financial Institutions
The link between patients and their healthcare providers is community banks and credit unions that provide the financing.
Patient loans provide a unique lending opportunity: an additional interest revenue stream with a low customer acquisition cost. Loans are guaranteed by the healthcare provider, meaning there is no risk to the financial institution. And in a time when excess liquidity is a concern, a new source for lending that doesn’t also take on unnecessary risk is a boon to the bank or credit union.
Patient Loans @Epic River facilitates these new borrower relationships, expands deposit relationships with healthcare providers, and allows institutions to meet Community Reinvestment Act (CRA) requirements more easily. Perhaps most importantly, it is an opportunity for banks and credit unions to help their loan communities.
Unlike other fintech partners, Epic River does not charge licensing fees to begin using its Patient Lending platform. Community banks and credit unions can get started without an upfront investment.
Patient Loans @Epic River: Bringing It All Together
The key to patient lending is flexibility. A single payment plan offering is not going to meet the budget of every patient looking to finance medical expenses. And patient financing that relies on a credit score excludes some patients that would otherwise make the payments if financing was available. Patient financing needs to offer flexible terms, approve all patients, and also have an easy-to-use platform for patients to sign up.
Epic River brings all of these together with its Patient Loans @Epic River solution. It provides the assistance that borrowers need, a new revenue stream for banks and credit unions, and makes a real difference in provider compensation.
For more information or to schedule a demo, contact us today.
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