In the current market, healthcare providers are in a bind when it comes to collecting patients’ balances. With the increasing popularity of high-deductible health plans, patients owe more out-of-pocket than ever before. At the same time, patients tend to prioritize healthcare bills lower than other expenses, resulting in high A/R for healthcare organizations and increased risk of default for patients. How can healthcare providers make sure they get paid what they are owed, while still treating patients like valued customers?

Offering low or no-interest payment plans can help patients resolve their balances over time. Although many healthcare providers have their own payment plans, they typically do not have the know-how to administer them effectively, resulting in high cost to collect and bad debt exposure.

Based in New Brunswick, New Jersey, Saint Peter’s University Healthcare System was looking for ways to increase collections while reducing cost to collect—while still keeping the patient experience front and center.

“We were looking to provide our customers with an opportunity to extend their payment arrangements and we wanted to do it in a manner that didn’t cost the patient anything,” said Michael Berger, Director of Revenue Cycle.

Saint Peter’s ultimately partnered with HELP Financial Corporation to offer flexible, no-interest payment plans to its patients. In addition, HELP funded Saint Peter’s legacy in-house payment plans, providing an immediate influx of cash. HELP also conducted extensive on-site training for Saint Peter’s team focusing on patient engagement and offering the new patient payment plans.

“They were with us every step of the way,” said Joseph Polak, Manager of Resource Services. “A lot of business partners aren’t like that.”

Custom, Interest-Free Payment Plan Design

At the start of the partnership, HELP funded over $900,000 of Saint Peter’s in-house payment plans, clearing them off the organization’s A/R. Next, HELP worked with Saint Peter’s to design payment plans that would suit its specific patient population. HELP first rolled out interest-free payment plans for hospital patients, which last up to 36 months. Later, HELP offered payment plans for physician group patients, which are up to 24 months since those balances are generally smaller. In addition, returning patients can add new balances to payment plans as they receive additional care.

Since Saint Peter’s would no longer offer its own payment plans, leaders decided to white label the program to make it clear to patients that HELP was a trusted partner.

“We wanted to make it as seamless as possible for the patient, and that’s why we put our name on there,” Berger said. “That gave the patient confidence in HELP—they knew we were behind them.”

Before the payment plans were in place, HELP came on-site to train the Saint Peter’s patient financial services team using a test version of the HELP software. HELP also provided co-branded pamphlets to explain the payment plans to patients. Saint Peter’s was well prepared by the time the HELP program was available for patients.

“HELP were fully engaged educators, and they were very committed,” Polak said. “That made things very easy.”

Results: Lower Bad Debt, Fewer Defaults

With HELP as the exclusive payment plan provider for Saint Peter’s patients, the organization has experienced remarkable results in less than two years of partnership. Most notably, the organization’s bad debt has dropped by 30% year-over-year, in large part due to increased collection of patient balances made possible by HELP’s payment plans. In fact, patient cash collections have increased by almost 20% since implementing the HELP program, representing 4.2% of Saint Peter’s net patient service revenue. The patient-friendly payment plans have also reduced patient defaults by 20%, even though the average balance amount has not changed. The default rate as of December 2019 was only 2.7%.

These results suggest that healthcare providers ought to consider whether a HELP partnership is right for them and their patients.

“We did an exhaustive search of vendors because we wanted a partner that was going to adapt to our process and match how we treat our patients,” Berger said. “HELP fit into how we want to do business.”