Ophthalmology practices that offer patient financing options to pay for non-covered, elective procedures report that the value of doing so registers in both dollars and happy patients. Yet many practices hesitate to offer financing plans, due in large part to the fees they must pay to the financing companies in order to offer these plans. Such fees are typically 5 to 13.5 percent of the financed amount. Also, practices hesitate to become the bearer of bad news if a patient is not approved for credit. In this article, I'll review how offering financing plans can actually generate prospects and revenue. I'll also provide some guidelines for selecting a financing company.

Demand Exists
If you look at financing for your patients as something that takes money out of your pocket, you'll never use it to its full advantage. When done properly, financing can grow your practice and increase your patient volume and satisfaction. Americans' desire for services such as laser vision correction (from LASIK to CK), facial rejuvenation procedures like Botox injections, and oculoplastic surgeries (e.g., non-medically necessary blepharoplasty) continues to rise. Your physician colleagues in other subspecialties are allowing their patients to finance cosmetic surgeries such as breast augmentation and facelifts; cosmetic dentistry, weight-loss surgery and even veterinary care for beloved pets.

Americans are paying out of their own pockets for an increasing number of medical procedures. According to Beth Demain Reigber of the Dow Jones Newswires: "General Electric estimates that in an $83-billion U.S. health-care industry about $53 billion is self-paid by patients—not covered by insurance. Such a gap is how finance companies got their start, when doctors complained that they had plenty of potential patients, but said insurance wouldn't cover their procedures." To the business-wise ophthalmologist, this means that a large pool of patients is waiting to be offered some payment alternatives.

Is Financing Discounting?
Maybe you view financing as discounting your services and are therefore against it. But when you think about it, it's likely you are already discounting in some form, whether through cash discounts, professional discounts, co-management fees, or limited-time special pricing to boost volume. Table 1 reveals some areas where you may be discounting.

Table 1. Price Reductions on Refractive Surgery
Co-Management average is 15 percent of fee
Corporate Contracts average cost is 10 to 20 percent in fee reduction
External Marketing average cost is $300 to gain a new patient
Accept Credit Card Payments average cost is around 2 percent of financed amount
No-Interest Patient Financing cost is from 5 to 13.5 percent of financed amount or less

You already recognize the benefits of these discount scenarios. Adding financing to your business plan will only widen your reach. Plus, you may find that any "burden" brought by financing may be shared. Co-management brings patients to your practice and builds relationships with outside providers. By using patient financing for both OD and MD services, for example, each provider may be willing to accept a portion of the financing fee. In doing so, each receives his payments within 48 hours and the patient only has to deal with one transaction—with the financing company. 

Which Patients Finance?
CareCredit (Anaheim, Calif.) conducted a survey in 2002 that looked at LASIK fees, surgical volume and the number of surgeons offering financing plans.

Based on the results shown in Table 2, you can see that practices that extend financing as a lead generator (putting it in their internal and external marketing), increase their surgical volume and are able maintain a fee higher than the U.S. average without discounting prices.

Table 2. Fees and Volume
2002 U.S. Average Top 50 CareCredit Providers
LASIK procedure fee $1,650 $1,800
Percent of patients financing procedures 15 25-30
Average number of procedures per surgeon/month 23/month 90/month
Percent using 12-month no-interest financing 40 85

Financing companies have also found that the risk profile of users is diverse, and the findings aren't skewed toward people with lower income or credit scores. Financially savvy consumers are looking for a means of paying for things that best meets with their personal financing goals. Patients shopping for an elective procedure and the best means of payment will choose interest-free financing and then evaluate providers based on their professional qualities and reputation, as well as the financial packages available. Patients can put monies aside in their flex plans, tax-free, and then use interest-free financing. The surgeons they choose are the ones offering financing options.

Make It Known
Knowing that the patient's two main barriers to scheduling an elective procedure are fear and finances, you should realize that waiting until the end of your discussion about the elective procedure to talk about financing is waiting too long. By then, the patient has had time to think of all the reasons why she can't do it—vacations, family purchases, etc. If you begin by taking the financial burden out of the equation, then you can tackle the fear factor with a presentation about your expertise, facility, procedure and outcomes.
Get a head start by mentioning the availability of financing options in all of your internal and external marketing efforts—print, radio, TV—in addition to word of mouth.

If you're still unsure, you can offer financing on a trial basis. Mention the financing options in your regular advertising for 30 days to see if your phones ring more frequently and if your inquiry-to-surgery rate increases. If it does, then you can feel confident that the cost of financing will pay for itself. If your numbers don't jump up, the message may be that your area's demographics are not price-conscious.

If you offer elective procedures at a discount to a set of employees through corporate contracting, you know that this arrangement can bring patients to your facility. However, people who cannot afford the procedure out-of-pocket won't be moved by the 10- to 20-percent contract discount. Rather than advertise this discount, use notices in employee paychecks, break rooms, newsletters, etc., to promote your interest-free financing plans available to meet all budgets.

Finally, don't assume that patients who don't have cash for their procedures can just put the cost of surgery on their credit cards. These cards are not fail-safe solutions for payment. Statistics show that half of all patients prefer to pay for health-care services on a credit card, but most only have $300 available credit—not enough to cover the procedure.

Planning Your Budget
Your practice can afford the fees associated with offering financing plans if you include it in your annual marketing budget. It is an expense, but financing will draw attention to your practice and can increase your procedure volume. Statistics from the industry publication MarketScope show that the average cost to gain a new patient for an elective procedure is approximately $300 per patient. But it'll cost you more than a few hundred dollars if you lose a potential patient to a reputable competitive facility that offers interest-free financing. On the other hand, your costs will decrease if you make interest-free financing an immediate factor in a patient's decision to choose you.

Choosing a Company
More than enough financing companies will want to partner with your practice to offer plans to your patients. Just as you would not want your patients to base their choice of surgeon solely on your pricing structure, there's more to choosing a financing company than the face value of its processing fee. Ask questions of your finance company prospects, and be sure to include:

• Is there a cost or a discount program available for doing business with your company?
• What plans do you make available to our patient base, and do we as a provider get to choose which we wish to offer?
• Do the patients get to choose which plan they wish to participate in or do their credit scores dictate this?

Find out with whom you are really doing business. Does the financing company have a long-standing history in the industry? Do they abide by all fair trade and credit laws? Is this non-recourse to me as a provider of services—meaning, to whom do I ultimately look for payment?

I have not yet met a physician or a practice that did not want to make it easy for patients to choose them as their trusted provider of elective procedures. You may offer the highest-quality care and surgical outcomes in the most customer-service friendly environment, but to get that proverbial icing on the cake—an increase in your surgical volume—you may just need to offer your prospective patients an array of financing options.

Ms. Neely is a director of physician services for Polly Neely Consulting:  (856) 853-9414 or pollyd@msn.com.