Patient Financing Options 101:
What Revenue Leaders Need to Know
Financing for patients is a critical tool for improving affordability, expanding access, and strengthening collections. This guide covers the fundamentals, including key financing models—like recourse and non-recourse—and what to look for in a patient financing partner.
What Is Patient Financing?
Patient financing helps patients pay for medical care over time through structured payment plans. For health systems, it’s a tool to improve patient affordability, access, and collections. Hospitals typically approach patient financing options in one of three ways: by managing in-house payment plans, partnering with third-party vendors, or offering a combination of both to provide a range of repayment terms.
Third-party vendors offer a range of financing for patients, including:
- Recourse and non-recourse options
- Interest-bearing and interest-free plans
- Fee-based or entirely fee-free programs
Third-party patient financing options are often pre-defined payment plans.
The PayZen Approach
PayZen takes a different approach. Our solution shifts away from one-size-fits-all loans, offering personalized, flexible financing for patients tailored to each patient’s ability to repay. Unlike credit cards or traditional financing models, PayZen is always interest-free and fee-free.
Why Hospitals Need a Patient-First Financing Partner
Patient debt is rising while collections remain low. Hospitals recover only 24% of what patients owe, and most Americans can afford to pay only $97 a month for medical bills.
A patient-first approach to financing closes the gap for patients. By partnering with a modern, patient-friendly financing partner that tailors repayment terms to each patient, hospitals can improve collections, reduce risk, and expand access.
Exploring Today’s Patient Financing Options
Evaluating patient financing options means considering both recourse and non-recourse models. However, the right approach depends less on structure and more on measurable results and outcomes.
Recourse Financing
Recourse models offer upfront cash to providers, but any unpaid patient balances are ultimately returned to the health system. This approach typically allows for lower financing costs, since the provider retains some risk.
Non-Recourse Financing
With non-recourse financing, the vendor assumes the entire risk of the loan, even if the patient does not repay. This structure eliminates risk for the provider and simplifies financial forecasting.
What to Look for in a Patient Financing Partner
Not all patient financing options are built for today’s healthcare challenges. When evaluating solutions, look for a partner that delivers measurable impact for both patients and your bottom line.
Collections Lift
Drives meaningful lift, especially among patients at risk of default.
PayZen utilizes technology across the entire account lifecycle from personalized plans to proactive account servicing. The result: higher adoption and more payments collected from accounts that would otherwise go to bad debt.
Patient Access
Approves a broad swath of patients, not just those with high credit scores.
PayZen uses AI to underwrite based on true ability to pay, enabling access for patients who traditional financing models often exclude.
Transparency & Trust
Promotes affordability and fosters trust through interest-free and fee-free plans.
PayZen always offers 0% interest, no hidden fees, and no aggressive collection tactics. Patient satisfaction continues to rise, with a Net Promoter Score of 71—50% higher than the industry average.
Operational & Incentive Alignment
Integrates seamlessly with existing billing strategies, reduces staff workload, and ensures shared success.
PayZen is embedded in EHRs and patient portals with automated workflows and full lifecycle account servicing. It also supports in-house plan growth and utilization, without cannibalizing existing programs.
FAQs
What is patient financing?
Patient financing allows individuals to pay medical bills over time, rather than all at once, through long-term payment plans.
Why should hospitals offer financing for patients?
Offering financing improves patient access to care, reduces uncompensated care, and increases patient satisfaction and long-term loyalty.
What’s the difference between traditional and modern financing models?
Modern patient financing uses AI and automation to tailor payment terms based on each patient’s ability to pay. It also provides smart servicing throughout the lifecycle of the plan to help keep patients on track. This digital-first, patient-centered approach leads to higher adoption and stronger collections compared to traditional models, which rely on pre-defined payment terms and offline processes.
How do hospitals and health systems choose the right financing partner?
Hospitals should evaluate partners based on flexible payment plans, integration with existing systems, and their ability to deliver measurable improvement across collections, patient experience, and operational efficiency.